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Joint Sponsors, Overall Coordinators, Joint Global Coordinators, Joint Bookrunners and Joint Lead Managers
牧原食品股份有限公司
MUYUAN FOODS CO., L TD.
Stock Code : 2714
(A joint stock company incorporated in the People’s Republic of China with limited liability)
GLOBAL OFFERING


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IMPORTANT: If you are in any doubt about any of the contents of this prospectus, you should obtain professional independent advice.
MUYUAN FOODS CO., LTD.
ʮ̡
(A joint stock company incorporated in the People’ s Republic of China with limited liability)
Global Offering
Number of Offer Shares under the
Global Offering
: 273,951,400 H Shares (subject to
the Over-allotment Option)
Number of Hong Kong Offer Shares : 27,395,200 H Shares (subject to
reallocation)
Number of International Offer Shares : 246,556,200 H Shares (subject to
reallocation and the Over-allotment
Option)
Maximum Offer Price : HK$39.00 per H Share, plus brokerage
of 1.0%, SFC transaction levy of
0.0027%, Hong Kong Stock Exchange
trading fee of 0.00565% and AFRC
transaction levy of 0.00015% (payable
in full on application in Hong Kong
dollars and subject to refund)
Nominal value : RMB1.00 per H Share
Stock code : 2714
Joint Sponsors, Overall Coordinators, Joint Global Coordinators,
Joint Bookrunners and Joint Lead Managers
Joint Global Coordinators, Joint Bookrunners and Joint Lead Managers
Joint Bookrunners and Joint Lead Managers
Hong Kong Exchanges and Clearing Limited, The Stock Exchange of Hong Kong Limited and Hong Kong Securities Clearing Company Limited take no responsib ility for the
contents of this prospectus, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss h owsoever arising from or in
reliance upon the whole or any part of the contents of this prospectus.
A copy of this prospectus, having attached thereto the documents specified in “Appendix VII — Documents Delivered to the Registrar of Companies and Av ailable on Display”
in this prospectus, has been registered by the Registrar of Companies in Hong Kong as required by Section 342C of the Companies (Winding Up and Miscella neous Provisions)
Ordinance (Chapter 32 of the Laws of Hong Kong). The Securities and Futures Commission of Hong Kong and the Registrar of Companies in Hong Kong take no re sponsibility
as to the contents of this prospectus or any other documents referred to above.
The Offer Price is expected to be determined by agreement between the Overall Coordinators (for themselves and on behalf of the Underwriters) and our C ompany on the Price
Determination Date. The Price Determination Date is expected to be on or around Wednesday, February 4, 2026 (Hong Kong time) and, in any event, not late r than 12:00 noon on
Wednesday, February 4, 2026 (Hong Kong time). The Offer Price will not be more than HK$39.00 per Offer Share. If, for any reason, the Offer Price is not ag reed by 12:00 noon
on Wednesday, February 4, 2026 (Hong Kong time) between the Overall Coordinators (for themselves and on behalf of the Underwriters) and our Company, t he Global Offering
will not proceed and will lapse.
The Overall Coordinators (for themselves and on behalf of the Underwriters), may, where considered appropriate and with the consent of our Company, r educe the number of Hong
Kong Offer Shares at any time prior to the morning of the last day for lodging applications under the Hong Kong Public Offering. In such case, notices of t he reduction in the number
of Hong Kong Offer Shares will be published on the website of our Company at www.muyuanfoods.com and on the website of the Hong Kong Stock Exchange at www.hkexnews.hk
as soon as practicable following the decision to make such reduction, and in any event not later than the morning of the last day for lodging application s under the Hong Kong Public
Offering. For further details, see “Structure of the Global Offering” and “How to Apply for Hong Kong Offer Shares” in this prospectus.
The obligations of the Hong Kong Underwriters under the Hong Kong Underwriting Agreement are subject to termination by the Overall Coordinators (for themselves and on behalf
of the Underwriters) if certain events occur prior to 8:00 a.m. on the Listing Date. For details, see “Underwriting” in this prospectus.
The Offer Shares have not been and will not be registered under the U.S. Securities Act or any state securities laws in the United States and may not be off ered, sold, pledged
or otherwise transferred within the United States, except pursuant to an available exemption from, or in a transaction not subject to, the registrati on requirements of the
U.S. Securities Act and in accordance with any applicable state securities laws in the United States. The Offer Shares may only be offered and sold (a) i n the United States
to QIBs in reliance on Rule 144A or another available exemption from registration requirements under the U.S. Securities Act, and (b) outside the Unit ed States in offshore
transactions in reliance on Regulation S. No public offering of the Offer Shares will be made in the United States.
IMPORTANT
January 29, 2026


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IMPORTANT NOTICE TO INVESTORS
FULLY ELECTRONIC APPLICATION PROCESS
We have adopted a fully electronic application process for the Hong Kong
Public Offering. We will not provide printed copies of this prospectus to the public
in relation to the Hong Kong Public Offering.
This prospectus is available at the website of the Stock Exchange at
www.hkexnews.hk under the “HKEXnews > New Listings > New Listing
Information” section, and our website at www.muyuanfoods.com. If you require a
printed copy of this prospectus, you may download and print from the website
addresses above.
To apply for the Hong Kong Offer Shares, you may:
(1) apply online via the HK eIPO White Form service at www.hkeipo.hk ;o r
(2) apply electronically through the HKSCC EIPO channel and cause HKSCC
Nominees to apply on your behalf by instructing your broker or custodian
who is a HKSCC Participant to give electronic application instructions via
HKSCC’s FINI system to apply for the Hong Kong Offer Shares on your
behalf.
We will not provide any physical channels to accept any application for the Hong
Kong Offer Shares by the public. The contents of the electronic version of this
prospectus are identical to the printed prospectus as registered with the Registrar of
Companies in Hong Kong pursuant to Section 342C of the Companies (Winding Up and
Miscellaneous Provisions) Ordinance (Chapter 32 of the Laws of Hong Kong).
If you are an intermediary , broker or agent , please remind your customers, clients
or principals, as applicable, that this prospectus is available online at the website
addresses above.
IMPORTANT
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Y our application through the HK eIPO White Form service or the HKSCC EIPO
channel must be for a minimum of 100 Hong Kong Offer Shares and in one of the
numbers set out in the table. If you are applying through the HK eIPO White Form
service, you may refer to the table below for the amount payable for the number of H
Shares you have selected. Y ou must pay the respective maximum amount payable on
application in full upon application for Hong Kong Offer Shares. If you are applying
through the HKSCC EIPO channel, you are required to prefund your application based
on the amount specified by your broker or custodian , as determined based on the
applicable laws and regulations in Hong Kong.
No. of
Hong Kong
Offer Shares
applied for
Maximum
Amount
payable (2) on
application/
successful
allotment
No. of
Hong Kong
Offer Shares
applied for
Maximum
Amount
payable (2) on
application/
successful
allotment
No. of
Hong Kong
Offer Shares
applied for
Maximum
Amount
payable (2) on
application/
successful
allotment
No. of
Hong Kong
Offer Shares
applied for
Maximum
Amount
payable (2) on
application/
successful
allotment
HK$ HK$ HK$ HK$
100 3,939.34 3,500 137,876.60 70,000 2,757,532.06 3,000,000 118,179,945.00
200 7,878.66 4,000 157,573.25 80,000 3,151,465.20 4,000,000 157,573,260.00
300 11,818.00 4,500 177,269.92 90,000 3,545,398.36 5,000,000 196,966,575.00
400 15,757.32 5,000 196,966.58 100,000 3,939,331.50 6,000,000 236,359,890.00
500 19,696.66 6,000 236,359.89 200,000 7,878,663.00 7,000,000 275,753,205.00
600 23,635.99 7,000 275,753.20 300,000 11,817,994.50 8,000,000 315,146,520.00
700 27,575.32 8,000 315,146.52 400,000 15,757,326.00 9,000,000 354,539,835.00
800 31,514.65 9,000 354,539.84 500,000 19,696,657.50 10,000,000 393,933,150.00
900 35,453.98 10,000 393,933.16 600,000 23,635,989.00 13,697,600
(1) 539,593,871.54
1,000 39,393.31 20,000 787,866.30 700,000 27,575,320.50
1,500 59,089.98 30,000 1,181,799.46 800,000 31,514,652.00
2,000 78,786.64 40,000 1,575,732.60 900,000 35,453,983.50
2,500 98,483.29 50,000 1,969,665.76 1,000,000 39,393,315.00
3,000 118,179.95 60,000 2,363,598.90 2,000,000 78,786,630.00
(1) Maximum number of Hong Kong Offer Shares you may apply for and this is 50% of the Hong Kong
Offer Shares initially offered.
(2) The amount payable is inclusive of brokerage, SFC transaction levy, the Stock Exchange trading fee
and AFRC transaction levy. If your application is successful, brokerage will be paid to the Exchange
Participants (as defined in the Listing Rules) or to the HK eIPO White Form Service Provider (for
applications made through the application channel of the HK eIPO White Form service) while the
SFC transaction levy, the Stock Exchange trading fee and the AFRC transaction levy will be paid to
the SFC, the Stock Exchange and the AFRC, respectively.
No application for any other number of Hong Kong Offer Shares will be considered
and any such application is liable to be rejected.
IMPORTANT
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If there is any change in the following expected timetable (1) of the Hong Kong
Public Offering, we will issue an announcement in Hong Kong to be published on the
Company’ s website at www.muyuanfoods.com and the website of the Stock Exchange at
www.hkexnews.hk.
Hong Kong Public Offering commences ..................... .9:00 a.m. on Thursday,
January 29, 2026
Latest time to complete electronic applications
under the HK eIPO White Form service
through the designated website at www.hkeipo.hk (2) .................. 1 1:30 a.m. on
Tuesday,
February 3, 2026
Application lists open (3) ..................................1 1:45 a.m. on Tuesday,
February 3, 2026
Latest time for completing payment of
HK eIPO White Form applications by effecting
internet banking transfers(s) or PPS payment
transfer(s) and giving electronic application
instructions to HKSCC
(4). .............................. .12:00 noon on Tuesday,
February 3, 2026
If you are instructing your broker or custodian who is a HKSCC Participant to give
electronic application instructions via HKSCC’s FINI system to apply for the Hong Kong
Offer Shares on your behalf, you are advised to contact your broker or custodian for the latest
time for giving such instructions which may be different from the latest time as stated above.
Application lists close (3) ................................ .12:00 noon on Tuesday,
February 3, 2026
Expected Price Determination Date (5) ...................... a to r before 12:00 noon on
Wednesday, February 4, 2026
Announcement of the final Offer Price, the indication of level
of interest in the International Offering,
the level of applications in the Hong Kong
Public Offering and the basis of allocation of the
Hong Kong Offer Shares to be published and
on the website of the Stock Exchange at
www.hkexnews.hk and the Company’s website
at www.muyuanfoods.com (6) at or before .................. 1 1:00 p.m. on Thursday,
February 5, 2026
EXPECTED TIMETABLE
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The results of allocations in the Hong Kong Public Offering (with successful applicants’
identification document numbers, where appropriate) to be available through a variety of
channels, including:
 in the announcement to be posted on our
website and the website of the
Stock Exchange at www.muyuanfoods.com
and www.hkexnews.hk respectively ................. a to r before 11:00 p.m.
on Thursday, February 5, 2026
 from the “Allotment Results” page
at www.hkeipo.hk/IPOResult
(or www.tricor.com.hk/ipo/result ) with
a “search by ID” function from .................... 1 1:00 p.m. on Thursday,
February 5, 2026
to 12:00 midnight on
Wednesday,
February 11, 2026
 from the allocation results telephone
enquiry line by calling +852 3691 8488
between 9:00 a.m. and 6:00 p.m. from ............. .Friday, February 6, 2026
to Wednesday, February 11, 2026
(excluding Saturday, Sunday and
public holiday in Hong Kong)
For those applying through HKSCC EIPO channel,
you may also check with your broker or custodian from ..... .6:00 p.m. on Wednesday,
February 4, 2026
H Share certificates in respect of wholly or partially
successful applications to be dispatched
or deposited into CCASS on or before
(7) ............................. .Thursday,
February 5, 2026
HK eIPO White Form e-Auto Refund payment
instructions/refund cheques (if applicable) in respect
of wholly or partially unsuccessful applications to
be dispatched on or before
(8)(9) ....................................... .Friday,
February 6, 2026
Dealings in the H Shares on the Hong Kong
Stock Exchange expected to commence at .................... .9:00 a.m. on Friday,
February 6, 2026
EXPECTED TIMETABLE
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Notes:
(1) Unless otherwise stated, all times and dates refer to Hong Kong local times and dates.
(2) Y ou will not be permitted to submit your application under the HK eIPO White Form service through the
designated website at www.hkeipo.hk after 11:30 a.m. on the last day for submitting applications. If you have
already submitted your application and obtained an application reference number from the designated website
prior to 11:30 a.m., you will be permitted to continue the application process (by completing payment of
application monies) until 12:00 noon on the last day for submitting applications, when the application lists
close.
(3) If there is/are a “black” rainstorm warning or a tropical cyclone warning signal number 8 or above and/or
Extreme Conditions (collectively, “ Severe Weather Signals ”) in force in Hong Kong at any time between 9:00
a.m. and 12:00 noon on Tuesday, February 3, 2026, the application lists will not open or close on that day. For
further details, please see the section headed “How to Apply for Hong Kong Offer Shares — E. Severe Weather
Arrangements” in this prospectus.
(4) Applicants who apply for Hong Kong Offer Shares by giving electronic application instructions to HKSCC
via HKSCC’s FINI system should refer to the section headed “How to Apply for Hong Kong Offer Shares —
A. Application for Hong Kong Offer Shares” in this prospectus.
(5) The Price Determination Date is expected to be on or about Wednesday, February 4, 2026, and in any event,
not later than 12:00 noon on Wednesday, February 4, 2026. If, for any reason, the Offer Price is not agreed
between the Overall Coordinators and us on or before 12:00 noon on Wednesday, February 4, 2026, the Global
Offering will not proceed and will lapse.
(6) None of the websites or any of the information contained on the websites forms part of this prospectus.
(7) H Share certificates will only become valid at 8:00 a.m. on the Listing Date provided that the Global Offering
has become unconditional and the right of termination described in the section headed “Underwriting —
Underwriting Arrangements and Expenses — Hong Kong Public Offering — Grounds for Termination” in this
prospectus has not been exercised. Investors who trade H Shares on the basis of publicly available allocation
details prior to the receipt of H Share certificates or prior to the H Share certificates becoming valid evidence
of title do so entirely at their own risk.
(8) HK eIPO White Form e-Auto Refund payment instructions/refund cheques will be issued in respect of wholly
or partially unsuccessful applications pursuant to the Hong Kong Public Offering. Part of the applicant’s
identification document number, or, if the application is made by joint applicants, part of the identification
document number of the first-named applicant, provided by the applicant(s) may be printed on the refund
check, if any. Such data would also be transferred to a third party for refund purposes. Banks may require
verification of an applicant’s identification document number before encashment of the refund check.
Inaccurate completion of an applicant’s identification document number may invalidate or delay encashment
of the refund check.
(9) Applicants who have applied on the HK eIPO White Form service for 1,000,000 or more Hong Kong Offer
Shares may collect any H Share certificates in person from our H Share Registrar, Tricor Investor Services
Limited, at 17/F, Far East Finance Centre, 16 Harcourt Road, Hong Kong from 9:00 a.m. to 1:00 p.m. on
Friday, February 6, 2026 or such other date as notified by us as the date of dispatch/collection of H Share
certificates/ HK eIPO White Form e-Auto Refund payment instructions. Applicants being individuals who are
eligible for personal collection may not authorize any other person to collect on their behalf. If you are a
corporate applicant which is eligible for personal collection, your authorized representative must bear a letter
of authorization from your corporation stamped with your corporation’s chop. Both individuals and authorized
representatives must produce evidence of identity acceptable to our H Share Registrar at the time of collection.
Applicants who have applied for Hong Kong Offer Shares through the HKSCC EIPO channel should refer to
the section headed “How to Apply for Hong Kong Offer Shares — D. Despatch/Collection of H Share
Certificates and Refund of Application Monies” in this prospectus for details.
Applicants who have applied through the HK eIPO White Form service and paid their applications monies
through single bank account may have refund monies (if any) dispatched to the bank account in the form of
HK eIPO White Form e-Auto Refund payment instructions. Applicants who have applied through the HK
EXPECTED TIMETABLE
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eIPO White Form service and paid their application monies through multiple bank accounts may have refund
monies (if any) dispatched to the address as specified in their application instructions in the form of refund
checks in favor of the applicant (or, in the case of joint applications, the first-named applicant) by ordinary
post at their own risk.
H Share certificates and/or refund checks for applicants who have applied for less than 1,000,000 Hong Kong
Offer Shares and any uncollected H Share certificates will be dispatched by ordinary post, at the applicants’
risk, to the addresses specified in the relevant applications.
Further information is set out in the sections headed “How to Apply for Hong Kong Offer Shares — D.
Despatch/Collection of H Share Certificates and Refund of Application Monies.”
The above expected timetable is a summary only. Y ou should read carefully the
sections headed “Underwriting,” “Structure of the Global Offering” and “How to Apply
for Hong Kong Offer Shares” in this prospectus for details relating to the structure of the
Global Offering, procedures on the applications for Hong Kong Offer Shares and the
expected timetable, including conditions, effect of severe weather and the dispatch of
refund cheques and H Share certificates.
If the Global Offering does not become unconditional or is terminated in accordance with
its terms, the Global Offering will not proceed. In such case, the Company will make an
announcement as soon as practicable thereafter.
EXPECTED TIMETABLE
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IMPORTANT NOTICE TO PROSPECTIVE INVESTORS
This prospectus is issued by us solely in connection with the Hong Kong Public
Offering and the Hong Kong Offer Shares and does not constitute an offer to sell or a
solicitation of an offer to buy any security other than the Hong Kong Offer Shares offered
by this prospectus pursuant to the Hong Kong Public Offering. This prospectus may not
be used for the purpose of making, and does not constitute, an offer or invitation in any
other jurisdiction or in any other circumstances. No action has been taken to permit a
public offering of the Hong Kong Offer Shares in any jurisdiction other than Hong Kong
and no action has been taken to permit the distribution of this prospectus in any
jurisdiction other than Hong Kong. The distribution of this prospectus for purposes of a
public offering and the offering and sale of the Hong Kong Offer Shares in other
jurisdictions are subject to restrictions and may not be made except as permitted under
the applicable securities laws of such jurisdictions pursuant to registration with or
authorization by the relevant securities regulatory authorities or an exemption therefrom.
You should rely only on the information contained in this prospectus to make your
investment decision. The Hong Kong Public Offering is made solely on the basis of the
information contained and the representations made in this prospectus. We have not
authorized anyone to provide you with information that is different from what is
contained in this prospectus. Any information or representation not contained nor made
in this prospectus must not be relied on by you as having been authorized by us, any of
the Joint Sponsors, the Overall Coordinators, the Joint Global Coordinators, the Joint
Bookrunners, the Joint Lead Managers, the Capital Market Intermediaries, the
Underwriters, any of our or their respective directors, officers, employees, agents, or
representatives of any of them or any other parties involved in the Global Offering.
Page
Important ......................................................... i i
Expected Timetable ................................................. i v
Contents .......................................................... viii
Summary ......................................................... 1
Definitions ........................................................ 3 0
Glossary of Technical Terms .......................................... 4 1
Forward-Looking Statements ......................................... 4 7
CONTENTS
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Risk Factors ....................................................... 4 8
Waivers and Exemptions ............................................. 7 8
Information about this Prospectus and the Global Offering ................. 9 2
Directors and Parties Involved in the Global Offering ..................... 9 6
Corporate Information .............................................. 1 0 9
Industry Overview .................................................. 1 1 2
Regulatory Overview ................................................ 1 3 1
History, Development and Corporate Structure ........................... 1 6 7
Business .......................................................... 1 8 5
Directors and Senior Management ..................................... 2 7 5
Relationship with Our Controlling Shareholders .......................... 3 0 0
Connected Transactions .............................................. 3 0 8
Substantial Shareholders ............................................. 3 2 0
Share Capital ...................................................... 3 2 2
Cornerstone Investors ............................................... 3 2 6
Financial Information ............................................... 3 3 8
Future Plans and Use of Proceeds ...................................... 4 1 7
Underwriting ...................................................... 4 2 2
Structure of the Global Offering ....................................... 4 3 4
How to Apply for Hong Kong Offer Shares .............................. 4 4 7
Appendix I Accountants’ Report .................................... I - 1
Appendix II Unaudited Pro Forma Financial Information ................ II-1
Appendix IIA Profit Estimate ........................................ IIA-1
Appendix III Taxation and Foreign Exchange ........................... III-1
Appendix IV Summary of Principal Legal and Regulatory Provisions ....... I V - 1
CONTENTS
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Appendix V Summary of the Articles of Association ..................... V - 1
Appendix VI Statutory and General Information ........................ VI-1
Appendix VII Documents Delivered to the Registrar of Companies and
Available on Display .................................. VII-1
CONTENTS
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This summary aims to give you an overview of the information contained in this
prospectus. As this is a summary, it does not contain all the information that may be
important to you. You should read the entire prospectus before you decide to invest in the
Offer Shares.
There are risks associated with any investment. Some of the particular risks in
investing in the Offer Shares are set out in the section headed “Risk Factors.” You should
read that section carefully before you decide to invest in the Offer Shares.
OVERVIEW
Who We Are
We are a technology-driven leading pork company, pioneering smart hog farming. With
over 30 years of deep-rooted expertise, we have become a leader in the hog farming industry
adopting a vertically-integrated business model that spans the entire hog value chain, which
includes hog breeding, hog farming, feed production, slaughtering and meat production.
According to Frost & Sullivan, since 2021, we have ranked first globally in the hog farming
industry in terms of production capacity and sales volume of hogs for four consecutive years.
Our global market share, measured by sales volume of hogs, increased from 2.6% in 2021 to
5.6% in 2024, exceeding the total of the players ranked second to fourth in 2024. While
continuing to solidify our leadership in the hog farming industry, since 2019, we have
strategically entered the hog slaughtering and processing industry to enhance our integrated
business model. According to Frost & Sullivan, we ranked fifth globally and first in China in
the hog slaughtering and processing industry in terms of slaughter volume in 2024, and our
slaughtering and meat product business reported the highest revenue CAGR from 2021 to 2024
among large-scale hog slaughtering and processing companies in China.
Our Technology and Innovation
Technology is the cornerstone of our business. As a pioneer in smart hog farming, we
have consistently rolled out new technologies in biosecurity, odor control, environmentally
sustainable operations and cost management, tackling industry pain points, enhancing
operational efficiency, optimizing cost structures, and generating lasting social value.
– In 2000, we initiated R&D into optimized soybean meal feed formulations, aimed at
lowering production costs and mitigating supply chain risks.
– In 2002, we pioneered the two-breed rotational cross system, establishing our
independent breeding system.
– In 2008, we applied the integrated crop-livestock system in our operations,
advancing environmental sustainability and resource efficiency.
SUMMARY
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– In 2011, we initiated digitalization in our operations, improving management
efficiency.
– In 2012, we launched disease elimination initiatives leveraging proprietary R&D
and technological innovation, developing biosecurity solutions to continuously
enhance production performance.
– In 2013, we established our pathology laboratories to strengthen diagnostic
capabilities, enabling efficient and accurate disease detection.
– In 2017, we fully completed the digitalization in our operations, continually
enhancing management efficiency.
– In 2019, we comprehensively upgraded our biosecurity management, equipping all
hog houses with our proprietary environment control system, which incorporates
air-filtration, sterilization, separate ventilation and deodorization features.
– In 2019, we comprehensively upgraded our smart operating systems, including the
feeding system, hog house environment control system, and hog health management
system, setting industry benchmarks for smart hog farming.
– In 2021, we established a platform dedicated to big data-related research and
development, accelerating our smart hog farming innovations.
– In 2021, we shared our optimized soybean meal feed formulations with the industry,
which were endorsed by the MARA as a strategic move to address the key
challenges in the hog farming industry, including soybean meal reliance and
nitrogen emission.
– In 2024, we commercialized ammonia reduction and deodorization solutions for
livestock farming, which were promoted by the PRC Ministry of Ecology and
Environment.
Through our proprietary innovations, we have solidified our leadership within the
industry while delivering exceptional financial performance.
From 2014 to 2024, we achieved industry-leading revenue growth with a CAGR of
48.7%, the highest among the top ten global listed pork companies by sales volume.
Leveraging our industry-leading technologies and cost-management capabilities, we have
achieved robust profitability. During the same period, our net profit increased at a CAGR of
72.7% and our average annual net profit margin reached 19.0%. Notably, we are the only
company to sustain an average annual net profit margin of above 15.0% from 2014 to 2024
SUMMARY
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among the top ten global listed pork companies by sales volume. From 2014 to 2024, our
EBITDA (non-CASBE measure) also increased at a CAGR of 60.2%, with an average EBITDA
margin (non-CASBE measure) of 30.8%, outperforming other large-scale listed companies in
China’s hog farming industry.
In addition to the growth in revenue and profit, we have consistently maintained a robust
cash flow position. Our continued and long-term investments in capital have gradually
transferred to strong cash flow generation capability. In 2022, 2023, 2024 and the nine months
ended September 30, 2024 and 2025, we recorded net cash inflow from operating activities of
RMB23,010.6 million, RMB9,892.8 million, RMB37,543.1 million, RMB29,177.9 million and
RMB28,579.5 million, respectively. From 2022 to 2024, our accumulated net cash inflow from
operating activities was 1.6 times of our accumulated capital expenditure (which represents
payment for acquisition of fix assets, intangible assets and other long-term assets), and in 2024
alone, our net cash inflow from operating activities was 3.0 times of our capital expenditure.
In the nine months ended September 30, 2025, our net cash inflow from operating activities
reached 3.9 times of our capital expenditure. Our profitability and asset utilization have
enabled industry-leading returns with an average ROE per annum of 22.5% from 2014 to 2024,
outperforming the second-ranked listed peer in China who recorded an average ROE per annum
of 15.7% during the same period. We value the long-term trust of our shareholders and have
consistently returned capital to shareholders through dividends. The aggregate dividends our
Company declared attributable to the years ended December 31, 2022, 2023, 2024 and the nine
months ended September 30, 2025 were RMB16.6 billion. As of the Latest Practicable Date,
we had paid these dividends in full.
Our Growth Opportunities
The global hog farming industry presents significant growth opportunities, which we are
uniquely positioned to capture with our advanced technologies, cost management advantages,
ESG excellence and our vertically-integrated business model that spans the entire hog value
chain (including hog breeding, hog farming, feed production, slaughtering and meat
production). According to Frost & Sullivan, global pork consumption has been increasing
steadily at a CAGR of 4.9% from 95.2 million tons in 2020 to 115.3 million tons in 2024. China
has long been the world’s largest pork consuming country, while, according to Frost &
Sullivan, the per capita consumption of main source of animal protein in China was 69.4 kg
in 2024, far below that of 102.0 kg per capita in the United States. Additionally, the proportion
of chilled fresh pork in China out of total pork consumption is still relatively low compared to
that in developed countries, indicating huge market potential.
Additionally, in certain countries and regions, such as Vietnam, the Philippines and
Thailand in Southeast Asia, per capita pork consumption has increased steadily in line with
continuous economic development and the improvement per capita disposable income. The
global hog farming industry remains highly fragmented, with the top five hog farming
companies in the world by sales volume accounting for a market share of 11.8% in 2024,
leaving significant opportunities for market consolidation. We are actively expanding into
overseas markets to capitalize on these opportunities. Leveraging our proven technological
SUMMARY
–3–


--- page 15 ---
expertise and innovative solutions, we aim to empower the hog farming industry by
establishing an interconnected hog farming ecosystem. For example, in 2024, we entered into
a strategic partnership with BAF Vietnam Agriculture, covering areas of hog house design,
biosecurity management, odor control solutions and smart hog farming equipment, so as to
optimize its hog farming efficiency and ensure environmentally responsible operations,
marking our initial efforts of global expansion.
OUR COMPETITIVE STRENGTHS
We believe the following strengths have driven our success and enable us to seize market
opportunities and achieve sustainable growth:
 Industry leader with fully integrated operations
 Proprietary end-to-end R&D capabilities
 High-growth slaughtering and meat product business
 ESG pioneer in sustainable hog farming
 Visionary leadership and strong corporate governance
See “Business — Our Competitive Strengths.”
OUR STRATEGIES
We drive the development of our business through the following strategies:
 Pioneering technology innovation across the value chain
 Strategic global expansion and market diversification
 Optimizing our vertically-integrated business model
 Building collaborative hog farming ecosystems
 Developing world-class talent and organizational advancement
See “Business — Our Strategies.”
SUMMARY
–4–


--- page 16 ---
BUSINESS MODEL AND PRODUCTS
We operate through two main business segments, namely: (i) our hog business, where we
farm and sell finished hogs, piglets and breeding hogs; and (ii) our slaughtering and meat
product business, which includes hog slaughtering and the sale of carcasses, pork cuts and
by-products. Our major products include hogs, namely finished hogs, piglets and breeding
hogs, as well as fresh and frozen meat products.
With over 30 years’ experience, we adopt a vertically-integrated business model that
spans the entire upstream and downstream of our industry, including hog breeding, hog
farming, feed production, slaughtering and sales of hogs and meat products. Through our
self-operated hog business and slaughtering and meat product business, we are able to maintain
full transparency, quality control and traceability over the entire production process, which in
turn allows us to ensure food safety and provide quality hogs and meat products to our
customers.
The chart below illustrates our vertically-integrated business model:
Hog dealers and
direct sales customers
Slaughtering and
meat product
business
Hog business
Slaughtering
Cutting and packaging
Wholesale market customers
and direct sales customers
Breeding
Gestation and
farrowing
Nursing
Fattening
Feed formulation
R&D
Feed productionFeed ingredients
SUMMARY
–5–


--- page 17 ---
The following table sets forth a breakdown of our revenue by business segment, in
absolute amounts and as percentages of our total revenue, for the periods indicated:
Y ear ended December 31,
Nine months ended September
30,
2022 2023 2024 2024 2025
Amount % Amount % Amount % Amount % Amount %
(RMB in millions, except for percentages)
(Unaudited)
Hog business /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118119,744.0 95.9 108,224.3 97.6 136,229.3 98.7 95,356.7 98.5 109,516.0 98.0
— Finished hogs /H1118/H1118/H1118/H1118/H1118/H1118115,896.5 92.8 106,975.5 96.5 131,306.7 95.2 91,096.0 94.1 103,391.1 92.5
— Piglets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,860.1 2.3 705.6 0.6 3,080.0 2.2 2,639.4 2.7 4,872.0 4.4
— Breeding hogs /H1118/H1118/H1118/H1118/H1118/H1118987.4 0.8 543.2 0.5 1,842.6 1.3 1,621.3 1.7 1,252.9 1.1
Slaughtering and meat
product business /H1118/H1118/H1118/H1118/H111814,718.1 11.8 21,862.3 19.7 24,273.6 17.6 15,881.0 16.4 31,812.7 28.5
Inter-segment elimination (1) /H1118 (15,634.2) (12.5) (22,793.0) (20.5) (24,435.8) (17.7) (15,632.4) (16.1) (32,708.6) (29.3)
Subtotal /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118118,827.9 95.2 107,293.6 96.8 136,067.1 98.6 95,605.3 98.8 108,620.1 97.2
Others (2) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185,998.3 4.8 3,567.1 3.2 1,879.8 1.4 1,169.8 1.2 3,169.9 2.8
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118124,826.2 100.0 110,860.7 100.0 137,946.9 100.0 96,775.1 100.0 111,790.0 100.0
Notes:
(1) The amounts of inter-segment elimination during the Track Record Period indicated the elimination of revenue
arising from the intra-group sales transactions between the hog business and the slaughtering and meat product
business. In accordance with relevant PRC tax laws and regulations, the revenue from our hog business is
exempt from V A T, whilst our slaughtering and meat product business is entitled to input V A T in relation to its
procurement of hogs. As such, the corresponding operating costs in relation to our slaughtering and meat
product business are recorded based on the sales amount of these intra-group transactions after deducting input
VAT.
(2) Others mainly comprise revenue from feed ingredients trading mainly including corn, wheat and soybean meal,
and other operating activities such as sales of feed and pig manure.
SUMMARY
–6–


--- page 18 ---
The following table sets forth key operational metrics of our key products for the periods
indicated during the Track Record Period:
Y ear ended December 31,
Nine months ended
September 30,
2022 2023 2024 2024 2025
Sales of hogs (thousand
heads) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111861,201 63,816 71,602 50,144 69,234
– Finished hogs (1) /H1118/H1118/H1118/H1118/H1118/H111855,296 62,267 65,477 45,132 57,323
– Piglets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185,558 1,367 5,659 4,607 11,571
– Breeding hogs /H1118/H1118/H1118/H1118/H1118/H1118/H1118346 181 465 405 340
Sales of meat products
(thousand tons) /H1118/H1118/H1118/H1118/H1118/H1118757 1,405 1,416 916 2,144
Note:
(1) The sales of finished hogs include the internal sales of finished hogs to our slaughtering and meat
product business, which amounted to 7,368 thousand heads, 13,266 thousand heads, 12,565 thousand
heads, 7,977 thousand heads and 19,135 thousand heads in 2022, 2023, 2024 and the nine months ended
September 30, 2024 and 2025 respectively.
The sales volume of piglets and breeding hogs declined in 2023, primarily attributing to
the overall market downturn, characterized by depressed hog prices. Hog farmers were
reluctant to expand hog production capacity with additional piglets and breeding hogs during
the market downturn, while we were able to flexibly adjust our sales volume of piglets and
breeding hogs leveraging our integrated operation model. As a result, the revenue from sales
of piglets and breeding hogs decreased from RMB3,847.5 million in 2022 to RMB1,248.8
million in 2023.
The following table sets forth a breakdown of our revenue by geographical region, in
absolute amounts and as percentages of our total revenue, for the periods indicated:
Y ear ended December 31, Nine months ended September 30,
2022 2023 2024 2024 2025
Amount % Amount % Amount % Amount % Amount %
(RMB in millions, except for percentages)
(Unaudited)
PRC /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118124,826.2 100.0 110,860.7 100.0 137,946.9 100.0 96,775.1 100.0 111,786.0 100.0
Others (1) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–– –– –– –– 4 . 0 0 . 0
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118124,826.2 100.0 110,860.7 100.0 137,946.9 100.0 96,775.1 100.0 111,790.0 100.0
Note:
(1) Other geographical regions primarily refer to Vietnam, which was related to the provision of service and sales
of equipment to a local hog farming operator.
SUMMARY
–7–


--- page 19 ---
Hog Business
With over 30 years’ expertise in the hog industry, we have established comprehensive
operations that encompasses hog breeding, hog farming, feed production and the sale of hogs.
Our main products under this business include finished hogs, piglets and breeding hogs.
Leveraging advanced technologies and smart equipment applied in every aspect of our hog
business, we are able to mass produce hogs with improving genetic traits and good health.
According to Frost & Sullivan, since 2021, we have ranked first globally in the hog farming
industry in terms of production capacity and sales volume of hogs for four consecutive years.
Our global market share, measured by sales volume of hogs, increased from 2.6% in 2021 to
5.6% in 2024, exceeding the total of the players ranked second to fourth in 2024. In 2024, we
had the largest hog production capacity worldwide with 81.0 million heads, according to the
same source.
We sell finished hogs as our main product under our hog business. In 2022, 2023, 2024
and the nine months ended September 30, 2024 and 2025, the revenue from the sales of
finished hogs (before inter-segment elimination) accounted for 92.8%, 96.5%, 95.2%, 94.1%
and 92.5% of the total revenue, respectively. In addition, we sell piglets and breeding hogs. We
dynamically adjust the proportion of sales of piglets and finished hogs to optimize our
profitability, primarily considering market demand, market prices, and our operational and
production plans. In 2022, 2023, 2024 and the nine months ended September 30, 2024 and
2025, the average selling prices of our hogs (excluding tax) were approximately RMB1,956.6
per head, RMB1,695.9 per head, RMB1,902.6 per head, RMB1,901.7 per head and
RMB1,581.8 per head, respectively. The following table sets forth the average selling prices of
our hog products by product type for the periods indicated:
Y ear Ended December 31,
Nine months ended
September 30,
2022 2023 2024 2024 2025
Finished hogs
(RMB/head) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,095.9 1,718.0 2,005.4 2,018.4 1,803.7
(RMB/kg) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111818.0 14.5 16.3 16.4 14.2
Piglets (1) (RMB/head) /H1118/H1118/H1118514.5 516.2 544.2 572.9 421.0
Breeding hogs (1)
(RMB/head) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,854.4 2,997.8 3,961.2 3,999.8 3,687.4
Note:
(1) The selling prices of piglets and breeding hogs are primarily determined by qualitative factors, including
their breed (such as first generation breeding pig, binary crossbred sow), health condition and genetics
(such as the production performance of the parent stock), rather than their weights.
SUMMARY
–8–


--- page 20 ---
Piglets Finished Hogs Breeding Hogs
We have established an extensive network of hog farms. As of September 30, 2025, we
operated over 1,000 hog farms across 23 provinces in China. The following table sets forth our
annual hog production capacity and sales volume for the periods indicated during the Track
Record Period:
Y ear ended December 31,
Nine months ended
September 30,
2022 2023 2024 2024 2025
Production capacity
(thousand heads) (1) /H1118/H1118/H111874,300 79,990 81,010 80,863 82,645
Sales volume (thousand
heads) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111861,201 63,816 71,602 50,144 69,234
– Finished hogs (2) /H1118/H1118/H1118/H1118/H1118/H111855,296 62,267 65,477 45,132 57,323
– Piglets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185,558 1,367 5,659 4,607 11,571
– Breeding hogs /H1118/H1118/H1118/H1118/H1118/H1118/H1118346 181 465 405 340
Notes:
(1) Represents the theoretical maximum number of hogs that could be sold from our hog farms based on
the estimated number of hog houses available in our hog farms by their standard capacity and estimated
hog farming turnover rate.
(2) The sales of finished hogs include the internal sales of finished hogs to our slaughtering and meat
product business, which amounted to 7,368 thousand heads, 13,266 thousand heads, 12,565 thousand
heads, 7,977 thousand heads and 19,135 thousand heads, respectively, in 2022, 2023, 2024 and the nine
months ended September 30, 2024 and 2025.
According to Frost & Sullivan, the hog market in China is primarily influenced by the
changes in the supply and demand of hogs, which are in turn affected by various factors,
including the biological production cycle, animal diseases and government policies. The
outbreak of animal diseases in 2018 significantly disrupted hog supply, driving a substantial
increase in hog price that peaked in 2020. As the national hog production capacity gradually
recovered in the following years, the increasing supply resulted in a decline in hog prices,
which reached a cyclical low in 2023. In light of the recovery in both hog price and hog
production capacity in 2024, combined with the biological growth cycle of hogs, hog supply
gradually became ample in late 2024 and 2025. Against a backdrop of relatively stable demand,
this supply-demand dynamic exerted downward pressure on hog prices in 2025. See “Industry
Overview — China’s Hog Farming Industry — Market Selling Prices of Hogs in China” and
“ — Recent Developments and No Material Adverse Change.”
SUMMARY
–9–


--- page 21 ---
The average selling price of our finished hogs (RMB per head) during the Track Record
Period was closely correlated with (i) the average weight per hog; and (ii) market selling prices
of hogs (RMB per kg), which declined in 2023 and 2025. The sales volume of our finished hogs
increased steadily throughout the Track Record Period, driven by our strategic capacity
expansion and operational scaling. Despite the inherent cyclicality of hog price, we remain
focused on enhancing our operational efficiency and reducing costs through technological
innovation. For example, we have further enhanced our breeding efficiency by adopting
data-driven genetic selection platform to improve herd performance. In addition, we flexibly
adjust feed formulas and sourcing plans in response to raw material fluctuations, which enables
us to manage overall production costs. Through the integration of IoT and smart technologies
in our hog farming and hog health management process, we are able to reduce labor costs and
improve hog health, thereby enhancing hog farming efficiency. We also have strengthened
smart hog farming management system to further improve productivity and control operation
costs. All these measures enable us to effectively manage costs and maintain competitiveness
amid the cyclical nature of the hog industry.
The average selling price of our piglets and breeding hogs was primarily affected by the
supply and demand in the market. As a result of a decline in the national inventory of
productive sows in 2023, there was a shortage in supply of piglets and breeding hogs in 2024,
driving up the average market selling price of piglets and breeding hogs in 2024. The sales
volume of piglets and breeding hogs declined in 2023, primarily attributing to the overall
market downturn, characterized by depressed hog prices. Hog farmers were reluctant to expand
hog production capacity with additional piglets and breeding hogs during the market downturn,
while we were able to flexibly adjust our sales volume of piglets and breeding hogs leveraging
our integrated operation model.
The changes in the supply and demand of hogs materially affected the hog price cycle in
China as well as our operating results during the Track Record Period, especially in 2023.
SUMMARY
–1 0–


--- page 22 ---
Our hog farming operation covers the entire life cycle of hogs from breeding, gestation,
lactation, nursing and finishing. The following chart illustrates the typical life cycle of hogs:
After about 114 days, the sows
give birth to piglets.
After the sows are selected and kept in
quarantine until 190~210 days of age, they
start mate and breed.
The hogs are fed for about
100~120 days (the hogs
weigh around 120kg) and
are ready for sale.
After about 54 days of nursing,
the piglets will be transferred to
finishing houses.
The lactation period lasts for 21 to 25 days
after the sows giving birth to piglets.
After the piglets weigh
6-7kg, they are weaned and ready to
be transferred to the nursing room.
Gestation period Sow quarantine
period
Finished hogsFinishing
period
Nursing
period
Lactation
period
See “Business — Hog Business.”
Slaughtering and Meat Product Business
Our slaughtering and meat product business includes hog slaughtering and sales of fresh
and frozen meat products. Our meat products can be further divided into three main categories,
namely, carcasses, pork cuts and by-products. According to Frost & Sullivan, we ranked fifth
globally and first in China in hog slaughtering and processing industry in terms of slaughter
volume in 2024. We made such achievement within a short period since we initially started the
business in 2019 with our lead over the second-ranked company continuing to grow. In
addition, we recorded the highest revenue CAGR from 2022 to 2024 among large-scale
Chinese hog slaughtering and processing companies.
Carcass Pork cuts By-products
SUMMARY
–1 1–


--- page 23 ---
In 2022, 2023, 2024 and the nine months ended September 30, 2024 and 2025, the average
selling prices (excluding tax) of our meat products were approximately RMB19.4 per kg,
RMB15.6 per kg, RMB17.1 per kg, RMB17.3 per kg and RMB14.8 per kg, respectively. The
shelf life of our meat products is mainly seven days for fresh meat products (stored at 0~4°C)
and 18 months for frozen meat products (stored at -18°C). The following table sets forth the
average selling prices of our meat products by product type for the periods indicated:
Y ear ended December 31,
Nine months ended
September 30,
2022 2023 2024 2024 2025
(RMB per kg)
Carcasses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111821.6 16.9 19.1 19.4 16.3
Pork cuts /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111821.5 17.1 18.8 18.6 17.4
By-products /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111813.0 11.5 11.6 12.0 9.8
The average selling prices of our meat products fluctuated during the Track Record
Period, which were in line with overall movement of pork prices in the Chinese market.
As of September 30, 2025, we had established ten slaughtering plants across seven
provinces in China. The following table sets forth the designed production capacity, actual
slaughter volume and utilization rate of our slaughtering plants for the periods indicated during
the Track Record Period:
Y ear ended December 31,
Nine months ended
September 30,
2022 2023 2024 2024 2025
Designed production
capacity (1) (thousand
heads) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111829,000 29,000 29,000 21,750 21,750
Slaughter volume (1)
(thousand heads) /H1118/H1118/H1118/H1118/H11187,362 13,260 12,524 7,972 19,164
Utilization rate (2) (%) /H1118/H1118/H111825.4 45.7 43.2 36.7 88.1
Notes:
(1) Since that our slaughtering plants measure their production capacity and slaughter volume by the heads
of hogs slaughtered, and that the weight of hogs varies over time, the slaughter volume (in head) may
not always align with the sales volume (in kilogram) for the same period.
(2) Utilization rate is calculated by dividing the slaughter volume by the designed production capacity for
the same year/period. According to Frost & Sullivan, the average utilization rate of China’s large-scale
slaughtering plants was around 30% during the Track Record Period, primarily due to the seasonal
fluctuations in the supply of hogs, which may not consistently meet the designed production capacity
of those slaughtering plants.
SUMMARY
–1 2–


--- page 24 ---
During the Track Record Period, our slaughter volume increased significantly from 7,362
thousand heads in 2022 to 13,260 thousand heads in 2023, primarily due to our efforts to
continuously improve operational efficiency of our slaughtering plants. Our slaughter volume
slightly decreased from 13,260 thousand heads in 2023 to 12,524 thousand heads in 2024,
primarily affected by overall market downturn. Our slaughter volume increased substantially
from 7,972 thousand heads in the nine months ended September 30, 2024 to 19,164 thousand
heads in the same period of 2025, primarily due to our continuous effort to expand our sales
channels for meat products and improve our operational efficiency, driving the increase in the
utilization rate of our slaughtering plants in the same period.
The slaughtering process mainly comprises the following steps:
CO2 stunning Slaughtering
and bleeding
Cleaning and
polishing
Ripping and
eviscerating
Scanning
inspection
Grading and
weighing
Half-splittingBy-products
Pre-cooling and
acid discharge
Carcasses
Cutting and
packaging
Pork cuts
See “Business — Slaughtering and Meat Product Business.”
OUR CUSTOMERS
We have established a comprehensive and regionally integrated sales network to cover
key markets across China, enabling us to efficiently connect production with market demand.
In our hog business, customers for our finished hogs are mainly hog dealers as well as
slaughtering plants. We also sell piglets and breeding hogs primarily to hog farming enterprises
and individual hog farmers. In our slaughtering and meat product business, we primarily sell
our meat products to wholesale market customers, and also sell our meat products to direct
sales customers, including retailers, restaurants, canteens and food processors.
SUMMARY
–1 3–


--- page 25 ---
The following table sets forth the breakdown of the revenue from our hog business
(before intersegment elimination) by type of customer for the periods indicated:
Y ear ended December 31, Nine months ended September 30,
2022 2023 2024 2024 2025
Amount % Amount % Amount % Amount % Amount %
(RMB in millions, except for percentages)
(Unaudited)
Hog dealers /H1118/H111858,145.5 48.6 44,950.7 41.5 56,430.1 41.4 40,580.8 42.6 38,110.7 34.8
Direct sales
customers (1) /H1118 61,598.5 51.4 63,273.6 58.5 79,799.2 58.6 54,775.9 57.4 71,405.3 65.2
Total /H1118/H1118/H1118/H1118/H1118/H1118119,744.0 100.0 108,224.3 100.0 136,229.3 100.0 95,356.7 100.0 109,516.0 100.0
Note:
(1) Direct sales customers represent our customers under hog business other than hog dealers, namely
slaughtering plants for the sales of finished hogs, and hog farming enterprises and individual hog
farmers for the sales of piglets and breeding hogs.
During the Track Record Period, the majority of our customers were based in the PRC.
Revenue from our five largest customers in each period during the Track Record Period
amounted to RMB10.1 billion, RMB10.7 billion, RMB12.4 billion and RMB9.3 billion,
respectively, representing 8.1%, 9.7%, 9.0% and 8.3% of our total revenue for the respective
periods. Revenue from our largest customer in each period during the Track Record Period
amounted to RMB3.4 billion, RMB3.4 billion, RMB5.2 billion and RMB2.9 billion,
respectively, representing 2.7%, 3.0%, 3.8% and 2.6% of our total revenue for the respective
periods.
During the Track Record Period and as of the Latest Practicable Date, none of our
Directors, their respective associates or shareholders (who owned or to the knowledge of
Directors had owned more than 5% of our issued share capital) had any interest in any of our
five largest customers for each period of the Track Record Period, save that, as of the Latest
Practicable Date, we held 40% interest in a subsidiary of one of our top five customers for each
period of the Track Record Period, with the remaining interest held by an Independent Third
Party.
See “Business — Sales Network.”
SUMMARY
–1 4–


--- page 26 ---
OUR SUPPLIERS
During the Track Record Period, our raw materials mainly included (i) feed ingredients,
(ii) veterinary medicines and vaccines, and (iii) miscellaneous consumption materials, mainly
including biosecurity disinfectant products, spare parts and maintenance materials for breeding
equipment and labor protection products. We adopt a centralized procurement strategy.
Purchases from our five largest suppliers in each period of the Track Record Period
amounted to RMB16.2 billion, RMB12.4 billion, RMB12.2 billion and RMB12.8 billion,
respectively, representing 15.9%, 11.7%, 12.6% and 17.2% of our total purchases for the
respective periods. Purchases from our largest supplier in each of the respective periods
amounted to RMB4.5 billion, RMB3.6 billion, RMB3.1 billion and RMB3.6 billion,
respectively, representing 4.4%, 3.4%, 3.2% and 4.9% of our total purchases for the respective
periods.
During the Track Record Period and as of the Latest Practicable Date, save for Muyuan
Group who was among our five largest suppliers for each period of the Track Record Period,
none of our Directors, their associates or any of our shareholders (who owned or to the
knowledge of the Directors had owned more than 5% of our issued share capital) had any
interest in any of our five largest suppliers for each period of the Track Record Period.
See “Business — Supplier Management” and “Connected Transactions — Partially-
exempt Continuing Connected Transaction.”
FOOD SAFETY MANAGEMENT AND QUALITY CONTROL
We value food safety and have implemented stringent quality control standards in
compliance with applicable laws and regulations, and national and industrial standards relating
to food production and sales. We have established the “7+1+1” food safety management and
quality control system to manage and monitor the entire production chain and lifecycle of our
products.
See “Business — Food Safety Management and Quality Control.”
COMPETITION
We mainly compete with hog farming companies and hog slaughtering companies in
China. According to Frost & Sullivan, the tightening environmental regulations have led to the
decline in number of hog farming companies around the world. In 2024, the global hog farming
industry was relatively fragmented, with top five market players accounting for 11.8% of the
market shares in terms of sales volume. In the same year, the top five market participants in
China, measured by sales volume, held a market share of 20.9%. According to Frost &
Sullivan, the entry barriers of China’s hog farming industry are mainly capital barrier,
management barrier, technology barrier and ESG barrier.
SUMMARY
–1 5–


--- page 27 ---
Regarding China’s hog slaughtering and processing industry, the slaughter volume grew
steadily from 264.9 million heads in 2021 to 337.7 million heads in 2024, and is projected to
grow gradually from 363.4 million heads in 2025 to 452.7 million heads in 2029, representing
a CAGR of 5.6% from 2025 to 2029. Driven by policies that aim to promote the standardization
and centralization of hog slaughtering, the hog slaughtering and processing industry in China
is growing increasingly concentrated, with top five market participants occupying a market
share of 10.4% in terms of slaughter volume in 2024.
Since 2021, we have ranked first globally in the hog farming industry in terms of
production capacity and sales volume of hogs for four consecutive years. In addition, we
ranked fifth globally and first in China in the hog slaughtering and processing industry in terms
of slaughter volume in 2024. See “Industry Overview.”
SUMMARY OF HISTORICAL FINANCIAL INFORMATION
The following tables set forth summary financial data from historical financial
information during the Track Record Period, extracted from the Accountants’ Report as set out
in Appendix I to this prospectus. The summary financial data set forth below should be read
together with, and is qualified in its entirety by reference to, our financial statements in this
prospectus, including the related notes. Our consolidated financial information was prepared in
accordance with CASBE.
Summary of Consolidated Income Statement
The following table sets forth a summary of our consolidated income statement for the
periods indicated:
Y ear ended December 31,
Nine months ended
September 30,
2022 2023 2024 2024 2025
(RMB in million)
(Unaudited)
Revenue /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118124,826.2 110,860.7 137,946.9 96,775.1 111,790.0
Operating costs /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(102,987.1)(107,414.8)(111,666.5) (80,065.4) (90,855.5)
Gross profit /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111821,839.1 3,445.9 26,280.4 16,709.7 20,934.5
Taxes and surcharges /H1118/H1118/H1118/H1118/H1118/H1118(185.3) (189.5) (223.2) (162.3) (202.6)
Selling and distribution
expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(758.7) (982.6) (1,095.7) (789.2) (943.7)
General and administrative
expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(4,201.4) (3,876.3) (3,331.7) (2,688.3) (2,741.5)
Research and development
expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(1,142.4) (1,657.7) (1,747.2) (1,267.6) (1,263.3)
Financial expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(2,907.7) (3,054.1) (2,975.4) (2,285.1) (1,951.0)
Other income /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,188.6 2,805.6 3,010.4 2,552.4 2,028.7
SUMMARY
–1 6–


--- page 28 ---
Y ear ended December 31,
Nine months ended
September 30,
2022 2023 2024 2024 2025
(RMB in million)
(Unaudited)
Investment income/(losses) /H1118 46.9 (6.4) 99.6 42.2 95.8
Gains/(losses) from changes
in fair value /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 0.1 (1.4) 6.0
Credit (losses)/reversal /H1118/H1118/H1118/H1118(23.1) (4.2) 0.3 9.2 (13.0)
Impairment losses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– (202.5) (12.9) (12.5) (2.9)
(Losses)/gains from asset
disposals /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(2.3) (10.1) 5.8 7.5 1.8
Operating profit/(loss) /H1118/H1118/H1118/H111814,853.7 (3,731.9) 20,010.5 12,114.6 15,948.8
Non-operating income /H1118/H1118/H1118/H1118/H1118376.9 157.2 84.4 64.4 82.2
Non-operating expenses /H1118/H1118/H1118/H1118(300.6) (595.4) (1,198.5) (965.6) (934.6)
Profit/(loss) before
income tax /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111814,930.0 (4,170.1) 18,896.4 11,213.4 15,096.4
Income tax credits /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183.4 2.2 28.6 32.3 15.7
Net profit/(loss) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111814,933.4 (4,167.9) 18,925.0 11,245.7 15,112.1
Non-CASBE Financial Measure
To supplement our consolidated financial statements, we also use EBITDA (non-CASBE
measure) in evaluating our operating results, which is not required by or presented in
accordance with CASBE as an additional financial measure to supplement our historical
financial information as set forth in the Accountants’ Report in Appendix I to this prospectus.
We believe that the non-CASBE measure provides useful information to investors and others
in understanding and evaluating our results of operations in the same manner as they help our
management. However, our presentation of EBITDA (non-CASBE measure) may not be
comparable to similarly titled measures presented by other companies. The use of such
non-CASBE measures have limitations as an analytical tool, and you should not consider it in
isolation from, or as a substitute for an analysis of, our results of operations or financial
condition as reported under CASBE.
SUMMARY
–1 7–


--- page 29 ---
We define EBITDA (non-CASBE measure) as net profit/(loss) adjusted by adding back (i)
income tax credits, (ii) interest expenses and (iii) depreciation and amortization, and interest
income. The following table sets forth our EBITDA (non-CASBE measure) :
Y ear ended December 31,
Nine months ended
September 30,
2022 2023 2024 2024 2025
(RMB in millions, except for percentages)
(Unaudited)
Reconciliation of net
profit/(loss)
to EBITDA ( non-
CASBE measure )
Net profit/(loss) /H1118/H1118/H1118/H1118/H111814,933.4 (4,167.9) 18,925.0 11,245.7 15,112.1
Add:
— Income tax
credits /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(3.4) (2.2) (28.6) (32.3) (15.7)
— Interest expenses /H1118 2,889.9 3,239.4 3,177.5 2,430.1 2,024.7
— Depreciation and
amortization /H1118/H1118/H1118/H1118/H111812,131.7 13,534.7 15,108.9 11,204.3 11,506.4
— Interest income /H1118/H1118(159.6) (249.8) (237.5) (184.7) (137.3)
EBITDA ( non-
CASBE measure )/H1118/H111829,792.0 12,354.2 36,945.3 24,663.1 28,490.2
EBITDA margin
(non-CASBE
measure) (%) /H1118/H1118/H1118/H111823.9 11.1 26.8 25.5 25.5
Our revenue decreased by 11.2% from RMB124,826.2 million in 2022 to RMB110,860.7
million in 2023. Our revenue subsequently increased by 24.4% from RMB110,860.7 million in
2023 to RMB137,946.9 million in 2024. Our revenue increased by 15.5% from RMB96,775.1
million in the nine months ended September 30, 2024 to RMB111,790.0 million in the nine
months ended September 30, 2025. In 2022, 2023, 2024 and the nine months ended September
30, 2024 and 2025, we recorded a gross profit of RMB21,839.1 million, RMB3,445.9 million,
RMB26,280.4 million, RMB16,709.7 million and RMB20,934.5 million, respectively. Our
gross profit margin was 17.5%, 3.1%, 19.1%, 17.3% and 18.7% in 2022, 2023, 2024 and the
nine months ended September 30, 2024 and 2025, respectively.
In particular, our gross profit margin is primarily affected by the gross profit margin of
the hog business. The fluctuations of market selling prices of hogs in China are primarily
resulted from the changes in the supply of hogs in China, which are in turn affected by various
factors, such as biological production cycle, animal diseases, government policies and weather
conditions. On the other hand, China’s pork demand has been relatively stable, as pork is
commonly used in the Chinese dietary habits. According to Frost & Sullivan, prior to 2022, a
full hog cycle in China typically lasted approximately four to five years. In a typical cycle, high
SUMMARY
–1 8–


--- page 30 ---
market selling prices encourage producers to expand the quantity of breeding hogs, boosting
supply; once the market becomes saturated, market selling prices fall, which influence
producers to cut capacity, and the next up-cycle begins. We proactively mitigate the impact of
hog cycle by implementing extensive measures to prevent outbreak of contagious animal
diseases among hogs, which is part of our continuous efforts in cost management.
With the hog prices in downswing in 2023, the revenue from our hog business decreased
by 9.6% from RMB119.7 billion in 2022 to RMB108.2 billion in 2023, and our gross profit
margin of our hog business decreased from 18.4% in 2022 to 2.9% in 2023. With the market
selling prices of hogs in upswing in 2024, the revenue from hog business increased by 25.9%
from RMB108.2 billion in 2023 to RMB136.2 billion in 2024, and our gross profit margin of
our hog business increased from 2.9% in 2023 to 19.2% in 2024. Our overall gross profit
margin increased from 3.1% in 2023 to 19.1% in 2024, primarily due to the improved gross
margin of the hog business. The revenue from hog business increased by 14.8% from RMB95.4
billion in the nine months ended September 30, 2024 to RMB109.5 billion in the nine months
ended September 30, 2025, primarily due to an increase in sales volume of our finished hogs
and piglets, partially offset by a decrease in average selling price of hogs, and our gross profit
margin of our hog business increased from 17.7% in the nine months ended September 30,
2024 to 18.4% in the nine months ended September 30, 2025, primarily due to enhanced cost
management measures. Our overall gross profit margin increased from 17.3% in the nine
months ended September 30, 2024 to 18.7% in the nine months ended September 30, 2025,
primarily due to the improved gross margin for the hog business.
As a result of the foregoing, we recorded a net profit of RMB14,933.4 million in 2022,
and a net loss of RMB4,167.9 million in 2023, which was primarily due to (i) a decrease in our
revenue and (ii) an increase in our operating costs. Such net loss position was subsequently
turned around to a net profit of RMB18,925.0 million in 2024, primarily due to an increase in
our revenue and our improved gross profit margin in 2024. Our net profit increased by 34.4%
from RMB11,245.7 million in the nine months ended September 30, 2024 to RMB15,112.1
million in the same period of 2025, primarily due to our revenue growth and improved gross
profit margin.
SUMMARY
–1 9–


--- page 31 ---
Selected Items of Consolidated Balance Sheet
The following table sets forth selected information from our summary consolidated
balance sheet as of the dates indicated, which has been extracted from our Accountants’ Report
included in Appendix I to this prospectus:
As of December 31,
As of
September 30,
2022 2023 2024 2025
(RMB in millions)
Total current assets /H1118/H1118/H1118/H1118/H1118/H1118/H111862,578.3 63,582.8 61,318.6 60,554.3
Total non-current assets /H1118/H1118/H1118/H1118130,369.3 131,821.8 126,330.1 120,201.6
Total assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118192,947.6 195,404.6 187,648.7 180,755.9
Total current liabilities /H1118/H1118/H1118/H111878,167.1 94,659.0 85,476.5 76,799.0
Total non-current liabilities /H1118 26,710.1 26,708.9 24,636.0 23,517.1
Total liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118104,877.2 121,367.9 110,112.5 100,316.1
Net current liabilities /H1118/H1118/H1118/H1118(15,588.8) (31,076.2) (24,157.9) (16,244.7)
NET ASSETS /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111888,070.4 74,036.7 77,536.2 80,439.8
Shareholders’ equity
Share capital /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185,472.3 5,465.4 5,462.8 5,462.8
Other equity instruments /H1118/H1118/H11181,017.2 1,017.2 1,017.2 1,017.1
Less: Treasury shares /H1118/H1118/H1118/H1118/H11182,084.4 2,818.9 3,000.0 4,049.9
Capital reserve /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111817,631.3 17,691.6 13,729.4 12,946.4
Other comprehensive
income /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183.1 (4.7) (33.6) (53.7)
Surplus reserve /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,956.0 2,198.0 2,584.6 2,584.6
Retained earnings /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111847,787.9 39,279.5 52,271.4 58,963.0
Total equity attributable
to shareholders of the
Company /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111871,783.4 62,828.1 72,031.8 76,870.3
Non-controlling interests /H1118 16,287.0 11,208.6 5,504.4 3,569.5
Total shareholders’ equity 88,070.4 74,036.7 77,536.2 80,439.8
Our net current liabilities of RMB15,588.8 million as of December 31, 2022 were mainly
attributable to (i) our short-term loans of RMB29,165.4 million mainly representing the bank
loans drawn to supplement our working capital when the hog prices were in downswing in 2022
as part of our liquidity management efforts, (ii) accounts payable of RMB25,186.2 million
representing payables for goods and payables for construction and equipment, (iii) non-current
liabilities due within one year of RMB9,691.7 million, which primarily consisted of long-term
SUMMARY
–2 0–


--- page 32 ---
loans due within one year, and (iv) other payables of RMB8,311.2 million which mainly related
to our reverse factoring arrangements, partially offset by (i) inventories of RMB38,251.7
million and (ii) cash at bank and on hand of RMB20,793.5 million.
Our net current liabilities increased by 99.3% from RMB15,588.8 million as of December
31, 2022 to RMB31,076.2 million as of December 31, 2023, primarily due to (i) an increase
in short-term loans of RMB17,763.6 million, and (ii) an increase in other payables of
RMB2,781.2 million, partially offset by an increase in inventories of RMB3,679.1 million. The
increase in short-term loans as of December 31, 2023 was primarily due to the bank loans
drawn to supplement our working capital when the hog prices was in downswing in 2023 as
part of our liquidity management efforts. We obtained short-term loans from time to time
during the Track Record Period, primarily to meet our working capital needs. Financial
institutions generally require sufficient collateral for medium- to long-term borrowings.
However, our assets, such as hogs and pig houses, are generally inadequate as collateral. As our
operations continued to improve, we had relatively sufficient operating cash flow, which was
used to pay off such short-term loans, optimizing our financing structure.
Our net current liabilities decreased by 22.3% from RMB31,076.2 million as of December
31, 2023 to RMB24,157.9 million as of December 31, 2024, primarily due to (i) a decrease in
accounts payable of RMB5,470.0 million, and (ii) a decrease in other payables of RMB2,744.2
million, partially offset by a decrease in cash at bank and on hand of RMB2,477.5 million. The
decrease in accounts payable and other payables as of December 31, 2024 was primarily to the
settlement of such payables in 2024, as the market selling prices of hogs in upswing in 2024,
which contributed to improved liquidity.
Our net current liabilities decreased by 32.8% from RMB24,157.9 million as of December
31, 2024 to RMB16,244.7 million as of September 30, 2025, primarily due to (i) a decrease in
accounts payables of RMB5,686.6 million, and (ii) a decrease in short-term loans of
RMB5,497.4 million, partially offset by a decrease in inventories of RMB5,449.5 million.
Our net assets decreased by 15.9% from RMB88,070.4 million as of December 31, 2022
to RMB74,036.7 million as of December 31, 2023, primarily due to (i) distributions to
shareholders of RMB5,188.0 million, (ii) acquisition of non-controlling interests of
RMB5,156.4 million and (iii) total comprehensive income of RMB(4,175.6) million, partially
offset by contribution by ordinary shareholders of RMB2,103.5 million.
Our net assets increased by 4.7% from RMB74,036.7 million as of December 31, 2023 to
RMB77,536.2 million as of December 31, 2024, primarily due to total comprehensive income
of RMB18,896.2 million, partially offset by acquisition of non-controlling interests of
RMB10,507.4 million and distributions to shareholders of RMB5,713.9 million.
Our net assets increased by 3.7% from RMB77,536.2 million as of December 31, 2024 to
RMB80,439.8 million as of September 30, 2025, primarily due to an increase of total
comprehensive income of RMB14,758.8 million, partially offset by (i) distributions to
shareholders of RMB8,087.3 million and (ii) repurchase of ordinary shares of RMB2,001.5
million.
SUMMARY
–2 1–


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Summary of the Consolidated Cash Flow Statement
The following table sets forth a summary of our cash flows for the periods indicated:
Y ear ended December 31,
Nine months ended
September 30,
2022 2023 2024 2024 2025
(RMB in millions)
(Unaudited)
Net cash inflow from
operating activities /H1118/H1118/H111823,010.6 9,892.8 37,543.1 29,177.9 28,579.5
Net cash outflow from
investing activities /H1118/H1118/H1118(15,928.7) (17,218.8) (13,246.2) (12,668.6) (8,499.3)
Net cash
inflow/(outflow) from
financing activities /H1118/H1118/H11182,420.5 3,199.0 (25,228.7) (14,540.6) (15,656.3)
Effect of foreign
exchange rate change
on cash and cash
equivalents /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11180.6 (6.9) – (0.0) 0.2
Net increase/(decrease)
in cash and cash
equivalents /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11189,503.0 (4,133.9) (931.8) 1,968.7 4,424.1
Cash and cash
equivalents at the
beginning of
year/period /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11188,407.3 17,910.3 13,776.4 13,776.4 12,844.6
Cash and cash
equivalents at the end
of year/period /H1118/H1118/H1118/H1118/H1118/H1118/H111817,910.3 13,776.4 12,844.6 15,745.1 17,268.7
Liquidity and Capital Resources
We have historically funded our cash requirements principally from proceeds from our
business operations, bank borrowings, debentures and capital contribution from shareholders.
After the Global Offering, we intend to finance our future capital requirements through cash
generated from our business operations, bank borrowings and the net proceeds from the Global
Offering. We do not anticipate any changes to the availability of financing to fund our
operations in the future.
SUMMARY
–2 2–


--- page 34 ---
Key Financial Ratios
The following table sets forth our key financial ratios for the periods indicated:
As of/For the Y ear ended December 31,
As of/ For the nine
months ended September 30,
2022 2023 2024 2024 2025
(Unaudited)
Gross profit margin (%) (1) /H1118/H1118 17.5 3.1 19.1 17.3 18.7
Net profit/(loss) margin
(%)(2) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111812.0 (3.8) 13.7 11.6 13.5
EBITDA margin (non-
CASBE measure) (%) (3) /H1118/H1118 23.9 11.1 26.8 25.5 25.5
Current ratio (4) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11180.8 0.7 0.7 0.7 0.8
Gearing ratio (%) (5) /H1118/H1118/H1118/H1118/H1118/H111854.4 62.1 58.7 58.4 55.5
Return on assets (%) (6) /H1118/H1118/H1118/H1118 8.1 (2.1) 9.9 7.8 10.9
Return on equity (%) (7) /H1118/H1118/H1118 19.1 (5.1) 25.0 19.5 25.5
Operating cash flow ratio
(%)(8) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111818.4 8.9 27.2 30.2 25.6
Notes:
(1) Gross profit margin equals gross profit divided by revenue and multiplied by 100%.
(2) Net profit/(loss) margin equals net profit/(loss) for the year/period divided by revenue for the
year/period and multiplied by 100%.
(3) EBITDA margin (non-CASBE measure) equals EBITDA (non-CASBE measure) divided by revenue and
multiplied by 100%. See “— Non-CASBE Financial Measure.”
(4) Current ratio equals current assets divided by current liabilities of the year/period.
(5) Gearing ratio equals total liabilities divided by total assets of the year/period and multiplied by 100%.
(6) Return on assets equals net profit/(loss) for the year/period divided by the average of the beginning and
ending balances of total assets for the year/period and multiplied by 100%. The net profit for the nine
months ended September 30, 2024 and 2025 are annualized.
(7) Return on equity equals net profit/(loss) for the year/period divided by the average of the beginning and
ending balances of total equity for the year/period and multiplied by 100%. The net profit for the nine
months ended September 30, 2024 and 2025 are annualized.
(8) Operating cash flow ratio equals net cash inflow from operating activities divided by revenue for the
year/period and multiplied by 100%.
See “Financial Information — Key Financial Ratios.”
SUMMARY
–2 3–


--- page 35 ---
Biological Assets and Valuation
Pursuant to the Chapter 4.10 under the Guide for New Listing Applicants published by the
Stock Exchange, the following table sets forth the fair value of our biological assets as
measured by the V aluer as of the dates indicated:
As of December 31,
As of
September 30,
2022 2023 2024 2025
(RMB in millions)
Consumable biological assets
– Suckling piglets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184,009.8 4,340.9 4,302.6 3,961.7
– Piglets under nursing period /H1118 6,828.8 6,186.2 7,149.1 5,661.0
– Hogs under finishing period /H1118 24,231.8 21,397.0 29,024.2 24,686.0
Subtotal /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111835,070.4 31,924.1 40,475.8 34,308.6
Productive biological assets (1) /H1118 11,774.0 12,085.0 14,274.8 10,537.9
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111846,844.5 44,009.0 54,750.6 44,846.5
Note:
(1) Productive biological assets include immature breeding hogs and mature breeding hogs. Mature
breeding hogs are reproductive sows and boars.
The fair value of our biological assets decreased by 6.1% from RMB46,844.5 million as
of December 31, 2022 to RMB44,009.0 million as of December 31, 2023, primarily due to a
decrease in market selling prices of hogs resulting from an oversupply of hogs. The fair value
of our biological assets increased by 24.4% from RMB44,009.0 million as of December 31,
2023 to RMB54,750.6 million as of December 31, 2024, primarily due to an increase in market
selling prices of hogs, which was mainly affected by the improved hog supply-demand
dynamics driven by the reduced supply of hogs, including breeding sows, and lower volume
of imported pork. The fair value of our biological assets decreased by 18.1% from
RMB54,750.6 million as of December 31, 2024 to RMB44,846.5 million as of September 30,
2025 primarily due to a decrease in market selling prices of hogs.
SUMMARY
–2 4–


--- page 36 ---
USE OF PROCEEDS
Assuming an Maximum Offer Price of HK$39.0 per Offer Share, we estimate that we will
receive net proceeds of approximately HK$10,459.7 million from the Global Offering after
deducting the underwriting commissions, fees and other estimated expenses in connection with
the Global Offering and assuming that the Over-allotment Option is not exercised, or
HK$12,038.1 million if the Over-allotment Option is exercised in full. In line with our
strategies, we intend to use our proceeds from the Global Offering for the following purposes:
 Approximately 60.0% of the net proceeds or approximately HK$6,275.8 million will
be used in our strategic global expansion and market diversification, which includes
(i) enhancing our supply chain capabilities for global expansion and our competitive
edge in overseas markets by securing a stable supply of feed ingredients through
international sourcing; (ii) strengthening our overseas market presence and
coverage, including the Southeast Asia market, such as Vietnam and Thailand; and
(iii) funding strategic initiatives, including mergers and acquisitions, alliances, joint
ventures, or minority investments, to strengthen our global presence and enhance
our competitiveness as a leading global hog farming company;
 Approximately 30.0% of the net proceeds or approximately HK$3,137.9 million will
be used for pioneering technological innovation across the value chain via R&D
investments over the next three years to consolidate our competitive advantages in
breeding, smart farming, nutrition management, and biosecurity; and
 Approximately 10.0% of the net proceeds or approximately HK$1,046.0 million will
be used for working capital and general corporate purposes.
See “Future Plans and Use of Proceeds.”
RISK FACTORS
Our operations and the Global Offering involve certain risks and uncertainties, including
(i) risks relating to our business and industry, (ii) risks relating to the local laws and regulations
of the jurisdictions where we conduct business and (iii) risks relating to the Global Offering,
which are set out in the section headed “Risk Factors” in this document. Y ou should read that
section in its entirety carefully before you decide to invest in the Offer Shares. Some of the
major risks we face include, but are not limited to: (i) our operating results are substantially
affected by the market selling prices of hogs and meat products; (ii) increases in the cost of raw
materials used in our operations, especially feed ingredients, may lead to declines in our
margins and operating results; (iii) the outbreak of contagious animal diseases among hogs and
the adverse publicity associated with these can significantly affect our production, the demand
for our products and our business operations; (iv) any perceived or real food safety or health
issues related to our hogs, meat products, operations or the food industry generally could
adversely affect our reputation, our ability to sell products and our financial performance, as
SUMMARY
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well as subject us to liability claims and regulatory actions; (v) we operate in a highly
competitive industry and may face increased competition. New competitors who enter the
market could have an adverse impact on our businesses and prospects; and (vi) we incurred net
losses in the past.
THE CONTROLLING SHAREHOLDERS
As of the Latest Practicable Date, our Controlling Shareholders Group, comprising Mr.
Qin Yinglin, Ms. Qian Ying and Muyuan Group, collectively held approximately 54.91% of our
total share capital and controlled 55.62% of the voting rights in our Company. Immediately
following the completion of the Global Offering (assuming that the Over-allotment Option is
not exercised and excluding A Shares issuable upon the conversion of the outstanding
Convertible Bonds), the Controlling Shareholders Group will continue to hold in aggregate
approximately 52.29% of our total share capital and control 52.93% of the voting rights in our
Company. Under PRC law, treasury shares do not carry voting rights. Accordingly, the voting
rights attached to the treasury shares repurchased by our Company on the A-share market are
excluded when calculating the voting rights of the Controlling Shareholders. Therefore, they
will remain as our Controlling Shareholders Group immediately after the Listing.
OUR LISTING ON THE SHENZHEN STOCK EXCHANGE AND REASONS FOR THE
LISTING ON THE STOCK EXCHANGE
Since January 28, 2014, the date of the listing of the A Shares of our Company on the
Shenzhen Stock Exchange, and up to the Latest Practicable Date, our Directors confirmed that
we had no instances of material non-compliance with the rules of the Shenzhen Stock
Exchange and other applicable securities laws and regulations of the PRC in any material
respects and, to the best knowledge of our Directors having made all reasonable inquiries, there
was no material matter that should be brought to the investors’ attention in relation to our
compliance record on the Shenzhen Stock Exchange. As advised by our PRC Legal Adviser,
during the Track Record Period and up to the Latest Practicable Date, we have not been subject
to any material administrative penalties or regulatory measures imposed by the CSRC,
Shenzhen Stock Exchange or PRC securities regulatory authorities. Based on the independent
due diligence conducted by the Joint Sponsors, nothing has come to the Joint Sponsors’
attention that would cause them to disagree with our Directors’ confirmation with regard to the
compliance records of the Company on the Shenzhen Stock Exchange.
DIVIDENDS AND DIVIDEND POLICY
In October 2024, our Shareholder Return Plan for 2024-2026 was adopted. Pursuant to
this plan, under the premise of ensuring our sustainable operation and long-term development,
if the Company is profitable and the accumulated undistributed profits are positive for the year
ended December 31, 2024, 2025 or 2026, the dividends will be distributed by the Company in
cash in the current and/or subsequent year and the dividends should not be less than 40% of
the distributable profits realized for each of the years ended December 31, 2024, 2025 or 2026.
SUMMARY
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Our Company declared dividends of RMB4,003.1 million, nil, RMB7,587.8 million and
RMB5,002.3 million, attributable to the years ended December 31, 2022, 2023, 2024 and the
nine months ended September 30, 2025, respectively. As of the Latest Practicable Date, we had
paid these dividends in full. Any future declaration and payment, as well as the amount of
dividends, will be subject to our Articles of Association and the relevant PRC laws. We
currently do not have any fixed dividend pay-out ratio. No dividend shall be declared or
payable except out of our profits and reserves lawfully available for distribution.
LISTING EXPENSES
Listing expenses represent professional fees, underwriting commissions and other fees
incurred in connection with the Global Offering. We estimate that our listing expenses will be
approximately RMB201.5 million, representing 2.1% of the gross proceeds (based on the
mid-point of our indicative price range for the Global Offering and assuming that the
Over-Allotment Option is not exercised) of the Global Offering. We estimate that
approximately RMB14.6 million of our listing expenses is expected to be recognized in the
consolidated income statement as general and administrative expenses and approximately
RMB186.9 million is expected to be recognized as a deduction in equity directly upon the
Listing. Our Directors do not expect such expenses to materially impact our results of
operations in 2025. By nature, our listing expenses are composed of (i) underwriting
commission of approximately RMB136.5 million and (ii) non-underwriting related expenses of
approximately RMB65.0 million, which consist of fees and expenses of legal advisors and
Reporting Accountants of approximately RMB35.5 million and other fees and expenses of
approximately RMB29.5 million.
OFFERING STATISTICS
All statistics in the following table are based on the assumptions that (i) the Global
Offering is completed and 273,951,400 H Shares are issued and sold in the Global Offering;
(ii) the Over-allotment Option is not exercised; and (iii) 5,736,722,666 Shares are issued and
outstanding following the completion of the Global Offering.
Based on
Offer Price of
HK$39.00 per
H Share
Market Capitalization of the H Shares following the completion of
the Global Offering /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
HK$10,684
million
Market capitalization of our A Shares (1) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
HK$286,002
million
Total market capitalisation considering both A Shares and
H Shares /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
HK$296,686
million
Unaudited pro forma adjusted consolidated net tangible assets
per Share (2) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118HK$16.73
SUMMARY
–2 7–


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Notes:
(1) Calculated based on the average closing price of A Shares for the five business days immediately
preceding the Latest Practicable Date of RMB47.61 (i.e. HK$53.03 calculated based on RMB0.89779
to HK$1.00) per share and the total share capital of 5,393,184,743 A Shares as of the Latest Practicable
Date (excluding treasure shares).
(2) The unaudited pro forma adjusted consolidated net tangible assets per Share is arrived at after
adjustments referred to in the section headed “Unaudited Pro Forma Financial Information” in Appendix
II to this prospectus and on the basis that 5,667,135,906 Shares (being 5,462,771,029 Shares in issue
as of September 30, 2025, deducting 69,586,523 treasury shares held by the Company as of September
30, 2025 and adding 273,951,400 H Shares to be issued pursuant to the Global Offering) were in issue
immediately following the completion of the Global Offering, but do not take into account any H Shares
which may be issued upon the exercise of the Over-allotment Option.
(3) No adjustment has been made to reflect any trading result or other transactions of our Group entered into
subsequent to September 30, 2025.
RECENT DEVELOPMENTS AND NO MATERIAL ADVERSE CHANGE
We have maintained stable business operations and development since September 30,
2025. In 2025, the sales volume of our finishing hogs reached approximately 78.0 million
heads. During the same period, our slaughter volume reached approximately 28.7 million
heads.
According to Frost & Sullivan, the average market selling price of finished hogs exhibited
a continued downward trend from the first quarter through the fourth quarter of 2025,
decreasing from approximately RMB15.1 per kg in the first quarter to RMB14.6 per kg in the
second quarter and RMB14.0 per kg in the third quarter, with a more notable decrease in the
fourth quarter reaching approximately RMB11.6 per kg. According to Frost & Sullivan, the
further decrease in average market selling price of finished hogs in the fourth quarter of 2025
was primarily attributable to an increase in industry-wide supply, driven by the expansion of
the breeding sow inventory in 2024, especially in the fourth quarter of 2024 and the first
quarter of 2025. Typically, it takes approximately ten months from the beginning of the
breeding sow’s gestation to reach finished-hog status. Thus, the elevated breeding sow
inventory resulted in an increased supply of finished hogs in the fourth quarter of 2025, which
in turn exerted downward pressure on average market selling price of finished hogs in the same
period. As confirmed by Frost & Sullivan, this downward trend in hog prices affected the entire
hog industry and all industry participants.
Against this industry backdrop, the decrease in the average market selling prices directly
affected our financial performance in the fourth quarter of 2025 in comparison with the first
three quarters of 2025. Consistent with the industry downward trend, the average selling price
of our finished hogs decreased in the fourth quarter in comparison with the first three quarters
of 2025, which had a direct impact on our revenue. In response to the market environment, we
increased our sales efforts and consequently achieved higher sales volume of finished hogs in
the fourth quarter of 2025. However, as the increase in sales volume was not sufficient to offset
the effect of the decrease in the average selling price of our finished hogs, the overall revenue
SUMMARY
–2 8–


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and gross profit for the fourth quarter of 2025 decreased in comparison with the average of the
first three quarters. In the meantime, we continued to improve operating efficiency and our
average total unit cost of finished hogs decreased in the fourth quarter of 2025 compared with
the averages of the first three quarters. Our gross profit and gross profit margin in the fourth
quarter were negatively impacted and decreased in comparison with the average of the first
three quarters of 2025. In addition, the selling and distribution expenses increased in the fourth
quarter of 2025, primarily attributable to our expanded sales efforts to support higher sales
volume. The general and administrative expenses also increased in the same period, primarily
due to the expenses recognized arising from equity-settled share-based payments. As a result
of the foregoing, net profit decreased in the fourth quarter of 2025 in comparison with the first
three quarters, mainly due to the decrease of average market selling prices.
Similarly, the decrease in our financial performance in the fourth quarter of 2025 in
comparison with the fourth quarter of 2024 was primarily attributable to the same industry-
wide price downturn, rather than any deterioration in business operations.
As such, our Directors are of the view that the hog industry is a distinct and specialized
industry that is subject to cyclicality. Hog prices are highly transparent in the market, and all
industry participants including us, are subject to the effects of the hog cycle throughout the
Track Record Period and in the fourth quarter of 2025. According to Frost & Sullivan, the
fourth quarter of 2025 was at the trough stage of the current cycle, during which hog prices
remained on a downward trend. Our average selling price is in line with the average market
selling price trend. Although our sales volume increased and our total unit cost decreased due
to stronger sales efforts and continued operational improvements, the decrease in average
market selling prices resulted in a decrease in our gross profit and net profit. Our Directors
have confirmed that, up to the date of this prospectus, there has been no material adverse
change in our financial or trading position or prospects since September 30, 2025, being the
end date of the periods reported in Appendix I to this prospectus and there is no event since
September 30, 2025 that would materially affect the information as set out in the Accountants’
Report in Appendix I to this prospectus.
PROFIT ESTIMATE FOR THE YEAR ENDED DECEMBER 31, 2025
We have prepared the following profit estimate for the year ended December 31, 2025.
Estimated consolidated net profit for the
year ended December 31, 2025 /H1118/H1118/H1118/H1118/H1118/H1118/H1118
Not less than RMB15.1 billion
Notes:
(1) The bases on which the above profit estimate has been prepared are summarized in Part A of Appendix
IIA to this prospectus. Our Directors have prepared the estimated consolidated net profit for the year
ended December 31, 2025 based on the audited consolidated results of our Group for the nine months
ended September 30, 2025, the unaudited consolidated results based on the management accounts of our
Group for the three months ended December 31, 2025. The profit estimate has been prepared on a basis
consistent in all material respects with the accounting policies currently adopted by our Group as set out
in Note II to the Accountants’ Report in Appendix I to this prospectus.
SUMMARY
–2 9–


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In this prospectus, unless the context otherwise requires, the following terms and
expressions shall have the meanings set out below.
“A Share(s)” ordinary shares issued by our Company, with a nominal
value of RMB1.00 each, which are listed on the Shenzhen
Stock Exchange and traded in Renminbi
“affiliate(s)” with respect to any specified person, any other person,
directly or indirectly, controlling or controlled by or
under direct or indirect common control with such
specified person
“AFRC” Accounting and Financial Reporting Council
“Articles of Association” or
“Articles”
the articles of association of our Company, conditionally
adopted on May 16, 2025 with effect from the Listing
Date, and as amended from time to time, a summary of
which is set out in Appendix V to this prospectus
“associate(s)” has the meaning ascribed thereto under the Listing Rules
“Audit Committee” the audit committee of the Board
“BAF Vietnam Agriculture” BAF Vietnam Agriculture Joint Stock Company, a public
company incorporated in Vietnam in 2017, primarily
engaging in livestock farming and animal feed production
“Board” or “Board of Directors” the board of Directors of the Company
“Business Day” a day on which banks in Hong Kong are generally open
for normal business to the public and which is not a
Saturday, Sunday or public holiday in Hong Kong
“CAC” the Cyberspace Administration of China ( ʕശɛ͏΍ձ
܃)
CASBE” China Accounting Standards for Business Enterprises
“CCASS” the Central Clearing and Settlement System established
and operated by HKSCC
DEFINITIONS
–3 0–


--- page 42 ---
“CGCC” China General Chamber of Commerce ( ʕ਷ਠุᑌΥึ)
“China” or “the PRC” the People’s Republic of China, excluding Hong Kong
Special Administrative Region, Macau Special
Administration and Taiwan region, except where the
content or context requires otherwise
“close associate(s)” has the meaning ascribed thereto under the Listing Rules
“CNCIC” China National Commercial Information Center ( ʕശΌ
ʕː)
“Companies Ordinance” the Companies Ordinance (Chapter 622 of the Laws of
Hong Kong), as amended, supplemented or otherwise
modified from time to time
“Companies (Winding Up and
Miscellaneous Provisions)
Ordinance”
the Companies (Winding Up and Miscellaneous
Provisions) Ordinance (Chapter 32 of the Laws of Hong
Kong), as amended, supplemented or otherwise modified
from time to time
“Company” or “our Company” Muyuan Foods Co., Ltd. (ʮ̡), a joint
stock company with limited liability established in the
PRC on July 13, 2000, the A Shares of which have been
listed on the Shenzhen Stock Exchange (002714.SZ)
“connected person(s)” has the meaning ascribed thereto under the Listing Rules
“connected transaction(s)” has the meaning ascribed thereto under the Listing Rules
“Controlling Shareholder(s)” has the meaning ascribed to it under the Listing Rules and
unless the context otherwise requires, refers to Mr. Qin
Yinglin, Ms. Qian Ying and Muyuan Group, together
being the Controlling Shareholders Group
“Convertible Bonds” the convertible bonds issued by our Company and listed
on the Shenzhen Stock Exchange on September 10, 2021
under the code “127045”
“core connected person(s)” has the meaning ascribed thereto under the Listing Rules
“CSRC” China Securities Regulatory Commission ( ʕ਷ᗇՎ္ຖ
ึ)
DEFINITIONS
–3 1–


--- page 43 ---
“Director(s)” the director(s) of our Company
“EIT” enterprise income tax
“EIT Law” the PRC Enterprise Income Tax Law ( ʕശɛ͏΍ձ਷
)
“ESG” Environmental, Social and Governance
“Extreme Conditions” the occurrence of “extreme conditions” as announced by
any government authority of Hong Kong due to serious
disruption of public transport services, extensive
flooding, major landslides, large-scale power outage or
any other adverse conditions before Typhoon Signal No.
8 or above is replaced with Typhoon Signal No. 3 or
below
“Frost & Sullivan Report” the industry report prepared by Frost & Sullivan, which
we commissioned Frost & Sullivan to prepare in relation
to our industry
“FINI” “Fast Interface for New Issuance”, an online platform
operated by HKSCC that is mandatory for admission to
trading and, where applicable, the collection and
processing of specified information on subscription in
and settlement for all New Listings
“Frost & Sullivan” Frost & Sullivan (Beijing) Inc., Shanghai Branch Co.
“General Rules of HKSCC” General Rules of HKSCC published by the Stock
Exchange and as amended from time to time
“Global Offering” the Hong Kong Public Offering and the International
Offering
“Group”, “our Group”, “our”,
“we”, or “us”
our Company and its subsidiaries, or any one of them as
the context may require, and where the context requires,
in respect of the period before our Company became the
holding company of any of its present subsidiaries, such
present subsidiaries of our Company, the businesses
carried on by such subsidiaries and (as the case may be)
their predecessors
DEFINITIONS
–3 2–


--- page 44 ---
“Guide” the Guide for New Listing Applicants published by the
Stock Exchange (as amended, supplemented or otherwise
modified from time to time)
“H Share(s)” overseas listed foreign ordinary share(s) in the share
capital of our Company with a nominal value of
RMB1.00 each, which are to be subscribed for and traded
in Hong Kong dollars and to be listed on the Hong Kong
Stock Exchange
“H Share Registrar” Tricor Investor Services Limited
“HK eIPO White Form ” the application for Hong Kong Offer Shares to be issued
in the applicant’s own name, submitted online through
the designated website at www.hkeipo.hk
“HK eIPO White Form Service
Provider”
the HK eIPO White Form service provider designated
by our Company, as specified on the designated website
at www.hkeipo.hk
“HKSCC” the Hong Kong Securities Clearing Company Limited, a
wholly owned subsidiary of Hong Kong Exchanges and
Clearing Limited
“HKSCC EIPO” the application for the Hong Kong Offer Shares to be
issued in the name of HKSCC Nominees and deposited
directly into CCASS to be credited to your or a
designated CCASS Participant’s stock account through
causing HKSCC Nominees to apply on your behalf, by
instructing your broker or custodian who is a HKSCC
Participant to give electronic application instructions via
FINI to apply for the Hong Kong Offer Shares on your
behalf
“HKSCC Nominees” HKSCC Nominees Limited, a wholly owned subsidiary
of the HKSCC
“HKSCC Operational
Procedures”
the Operational Procedures of HKSCC in relation to
CCASS, containing the practices, procedures and
administrative requirements relating to operations and
functions of CCASS, as from time to time in force
DEFINITIONS
–3 3–


--- page 45 ---
“HKSCC Participant” a participant admitted to participate in CCASS as a direct
clearing participant, a general clearing participant or a
custodian participant
“Hong Kong” or “HK” the Hong Kong Special Administrative Region of the
PRC
“Hong Kong dollars” or “HK$” Hong Kong dollars and cents respectively, the lawful
currency of Hong Kong
“Hong Kong Offer Shares” the 27,395,200 H Shares being initially offered by us for
subscription pursuant to the Hong Kong Public Offering
(subject to reallocation as described in the section headed
“Structure of the Global Offering” in this prospectus)
“Hong Kong Public Offering” the offer for subscription of the Hong Kong Offer Shares
to the public in Hong Kong, on and subject to the terms
and conditions described in the section headed “Structure
of the Global Offering” in this prospectus
“Hong Kong Stock Exchange” or
“Stock Exchange”
The Stock Exchange of Hong Kong Limited, a wholly
owned subsidiary of Hong Kong Exchanges and Clearing
Limited
“Hong Kong Underwriters” the underwriters of the Hong Kong Public Offering as
listed in the section headed “Underwriting” in this
prospectus
“Hong Kong Underwriting
Agreement”
the underwriting agreement dated January 28, 2026
relating to the Hong Kong Public Offering entered into
by, among others, the Company, the Joint Sponsors, and
the Overall Coordinators (for themselves and on behalf of
the Hong Kong Underwriters)
“Hurun Top 100 Restaurant
Brands in China”
an annual ranking that highlights the top 100 most
valuable and influential restaurant brands in China, as
assessed by the Hurun Research Institute
“Independent Third Party(ies)” any person(s) or entity(ies) who is not a connected person
of the Company within the meaning of the Listing Rules
DEFINITIONS
–3 4–


--- page 46 ---
“International Offer Shares” the 246,556,200 H Shares being initially offered by us for
subscription under the International Offering (subject to
reallocation as described in the section headed “Structure
of the Global Offering” in this prospectus) together with
any additional Shares that may be allotted and issued
pursuant to the exercise of the Over-allotment Option
“International Offering” the conditional placing of the International Offer Shares
at the Offer Price (a) in the United States to QIBs in
reliance on Rule 144A or another available exemption
from the registration requirements of the U.S. Securities
Act and (b) outside the United States in offshore
transactions in reliance on Regulation S, in each case on
and subject to the terms and conditions described in the
section headed “Structure of the Global Offering” in this
prospectus
“International Underwriters” the underwriters of the International Offering listed in the
International Underwriting Agreement
“International Underwriting
Agreement”
the underwriting agreement relating to the International
Offering which is expected to be entered into on or
around February 4, 2026 by, among others, the Company
and the Overall Coordinators (for themselves and on
behalf of the International Underwriters)
“Joint Bookrunners”, “Joint
Global Coordinators”, “Joint
Lead Managers” or “Joint
Sponsors”
the joint bookrunners, joint global coordinators, joint
lead managers and joint sponsors as named in the section
headed “Directors and Parties Involved in the Global
Offering” in this prospectus
“Latest Practicable Date” January 21, 2026, being the latest practicable date for the
purpose of ascertaining certain information contained in
this prospectus prior to its publication
“Listing” listing of the H Shares on the Main Board of the Stock
Exchange
“Listing Committee” the listing committee of the Hong Kong Stock Exchange
“Listing Date” the date, expected to be on or about Friday, February 6,
2026, on which the H Shares are listed and on which
dealings in the H Shares are first permitted to commence
on the Hong Kong Stock Exchange
DEFINITIONS
–3 5–


--- page 47 ---
“Listing Rules” or “Hong Kong
Listing Rules”
the Rules Governing the Listing of Securities on The
Stock Exchange of Hong Kong Limited (as amended,
supplemented or otherwise modified from time to time)
“Macau” the Macau Special Administrative Region of the People’s
Republic of China
“Main Board” the stock exchange (excluding the option market)
operated by the Hong Kong Stock Exchange which is
independent from and operates in parallel with the GEM
of the Hong Kong Stock Exchange
“Major Subsidiary” or “Major
Subsidiaries”
46 subsidiaries of the Company through which we mainly
operated our business as of the Latest Practicable Date
“MARA” Ministry of Agriculture and Rural Affairs of the PRC ( ʕ
ശɛ͏΍ձ਷ุ༵༵Ӏ௅)
“MOF” Ministry of Finance of the PRC (௅)
“MOFCOM” Ministry of Commerce of the PRC ( ʕശɛ͏΍ձ਷ਠਕ
௅)
“Muyuan Group” Muyuan Industrial Group Co., Ltd. (ʮ
̡), one of our Controlling Shareholders
“Muyuan Group Connected
Persons”
Muyuan Group, together with its subsidiaries and
associates, excluding our Group
“NDRC” the National Development and Reform Commission of
the PRC (ึ)
“Nomination Committee” the nomination committee of the Board
“Offer Price” the final offer price per Offer Share (exclusive of
brokerage fee of 1.0%, SFC transaction levy of 0.0027%,
Hong Kong Stock Exchange trading fee of 0.00565% and
AFRC transaction levy of 0.00015%) at which the Offer
Shares are to be subscribed for and issued pursuant to the
Global Offering as described in the section headed
“Structure of the Global Offering” in this prospectus
DEFINITIONS
–3 6–


--- page 48 ---
“Offer Shares” the Hong Kong Offer Shares and the International Offer
Shares, together with, where relevant, any additional H
Shares which may be issued by our Company pursuant to
the exercise of the Over-allotment Option
“Over-allotment Option” the option to be granted by us to the International
Underwriters exercisable by the Overall Coordinators (on
behalf of the International Underwriters) under the
International Underwriting Agreement, to require our
Company to allot and issue up to an aggregate of
41,092,700 additional H Shares at the Offer Price
(representing in aggregate approximately 15.0% of the
Offer Shares initially being offered under the Global
Offering) to, among others, cover over-allocations in the
International Offering, if any; for further details, see
“Structure of the Global Offering” in this prospectus
“Overall Coordinators” the overall coordinators of the listing of the H Shares on
the Hong Kong Stock Exchange as named in “Directors
and Parties Involved in the Global Offering”
“Overseas Listing Trial
Measures”
The Trial Measures for the Administration on Overseas
Securities Offering and Listing by Domestic Companies ( ྤ
) promulgated
by the CSRC on February 17, 2023 and became effective on
March 31, 2023
“PBOC” the People’s Bank of China ( ʕ਷ɛ͏ვБ), the central
bank of the PRC
“PRC Company Law” the Company Law of the People’s Republic of China ( ʕ
جas amended, supplemented or
otherwise modified from time to time
“PRC Government” the central government of the PRC and all governmental
subdivisions (including provincial, municipal and other
regional or local government entities) and
instrumentalities thereof or, where the context requires,
any of them
“PRC Legal Adviser” Fangda Partners, the PRC legal adviser to our Company
DEFINITIONS
–3 7–


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“Price Determination Agreement” the agreement to be entered into between our Company
and the Overall Coordinators on behalf of the
Underwriters on the Price Determination Date to record
and fix the Offer Price
“Price Determination Date” the date, expected to be on or about Wednesday, February
4, 2026 on which the Offer Price is to be fixed by
agreement between our Company and the Overall
Coordinators (on behalf of the Underwriters)
“prospectus” this prospectus being issued in connection with the Hong
Kong Public Offering
“QIBs” a qualified institutional buyer within the meaning of Rule
144A
“Regulation S” Regulation S under the U.S. Securities Act
“Relevant Persons” the Joint Sponsors, the Overall Coordinators, the Joint
Global Coordinators, the Joint Bookrunners, the Joint
Lead Managers, the Capital Market Intermediaries, the
Underwriters, any of their or the Company’s respective
directors, officers, employees, partners, agents, advisers
and any other parties involved in the Global Offering
“Remuneration and Appraisal
Committee”
the remuneration and appraisal committee of the Board
“RMB” or “Renminbi” Renminbi, the lawful currency of the PRC
“Rule 144A” Rule 144A under the U.S. Securities Act
“SAFE” the State Administration of Foreign Exchange of the PRC
(ʕശɛ͏΍ձ਷̮ි၍ଣ҅)
“SAMR” the State Administration for Market Regulation of the
PRC (̹ఙ္ຖ၍ଣᐼ҅)
“SA T” the State Administration of Taxation of the PRC ( ʕശɛ
೼ਕᐼ҅)
“Securities and Futures
Commission” or “SFC”
the Securities and Futures Commission of Hong Kong
DEFINITIONS
–3 8–


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“Securities Law” the Securities Law of the PRC (ج,)
as amended, supplemented or otherwise modified from
time to time
“SFO” the Securities and Futures Ordinance (Chapter 571 of the
Laws of Hong Kong), as amended, supplemented or
otherwise modified from time to time
“Share(s)” ordinary share(s) in the capital of our Company with a
nominal value of RMB1.00 each, including both A Shares
and H Shares
“Shareholder(s)” holder(s) of the Share(s)
“Stabilizing Manager” Morgan Stanley Asia Limited
“State Council” the State Council of the PRC ( ʕശɛ͏΍ձ਷਷ਕ৫)
“subsidiary(ies)” has the meaning ascribed thereto under the Listing Rules
“substantial shareholder(s)” has the meaning ascribed thereto under the Listing Rules
“Track Record Period” the financial years ended December 31, 2022, 2023 and
2024, and the nine months ended September 30, 2025
“U.S. dollars”, “US$” or “USD” United States dollars, the lawful currency of the United
States
“U.S. Securities Act” the U.S. Securities Act of 1933, as amended,
supplemented or otherwise modified from time to time,
and the rules and regulations promulgated thereunder
“Underwriters” the Hong Kong Underwriters and the International
Underwriters
“Underwriting Agreements” the Hong Kong Underwriting Agreement and the
International Underwriting Agreement
“United States”, “USA” or
“U.S.”
the United States of America, its territories and
possessions, any State of the United States, and the
District of Columbia
DEFINITIONS
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“V aluer” or “JLL” Jones Lang LaSalle Corporate Appraisal and Advisory
Limited, our biological asset valuer and an Independent
Third Party
“V A T” value-added tax
“W AFI” World AgriFood Innovation Conference, a global
agricultural event
In this prospectus, the terms “associate”, “close associate”, “connected person”, “core
connected person”, “connected transaction”, and “substantial shareholder” shall have the
meanings given to such terms in the Hong Kong Listing Rules, unless the context otherwise
requires.
Certain amounts and percentage figures included in this prospectus have been subject to
rounding. Accordingly, figures shown as totals in certain tables may not be an arithmetic
aggregation of the figures preceding them. Any discrepancies in any table or chart between the
total shown and the sum of the amounts listed are due to rounding.
For ease of reference, the names of PRC laws and regulations, governmental authorities,
institutions, nature persons or other entities (including our subsidiaries) have been included
in this prospectus in both the Chinese and English languages and in the event of any
inconsistency, the Chinese versions shall prevail.
DEFINITIONS
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This glossary of technical terms contains explanations of certain technical terms
used in this prospectus in connection with our Company and our business. Such
terminology and meanings may not correspond to standard industry meanings or usages
of those terms.
“3D” three-dimensional
“5G” the 5th generation mobile network, a new global wireless
standard after 1G, 2G, 3G, and 4G networks
“5R” reduce, reuse, recycle, remanufacture and redesign
“AGV” automated guided vehicle
“amino acid” the building blocks of proteins
“B-ultrasound” a type of medical imaging technique that uses high-
frequency sound waves to create real-time images of the
body’s internal structures, particularly useful in
monitoring fetal development
“BLUP” best linear unbiased prediction, a statistical method that
uses performance and pedigree data to assess and predict
an animal’s genetic potential by separating genetic
effects from environmental influences, for genetic
performance evaluation
“boar” intact adult male pig(s) for mating purpose
“breeding hog” pig(s) that are primarily used for breeding, including
sows and boars
“°C” degrees Celsius
“CAGR” compound annual growth rate
“carcass” the body of the slaughtered pig after bleeding,
evisceration and chilling
“China GAP certification” a certification for good agricultural practices in hog
farming and other agricultural sectors
GLOSSARY OF TECHNICAL TERMS
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“CMA certification” certification from the China National Certification and
Accreditation Administration, which is required for hog
farming and pork processing facilities in China
“CNAS” China National Accreditation Service for Conformity
Assessment
“CO
2” carbon dioxide
“CO2e” carbon dioxide equivalent
“CRM” customer relationship management, a strategic process
that organizations use to manage, analyze, and improve
their interactions with customers
“daily weight gain” the amount of weight gains of hogs per day
“estrus cycle” the recurring period of sexual receptivity and fertility in
female mammals, including pigs
“farrow” to give birth to a litter of piglets
“finished hog” pig(s) with heavy weight (normally around 120 kg) and
generally ready for sale
“FSSC 22000” a food safety management system certification scheme
that helps companies demonstrate their ability to make
safe products
“gestation” the period of time between conception and birth
“GFA” gross floor area
“GFSI” Global Food Safety Initiative, a collaboration of food
safety experts that sets standards for food safety
certification schemes
“GHG” greenhouse gas, emissions produced by hog farming and
pork processing activities that contribute to climate
change
“GW” gigawatt, a unit of measurement for the electrical power
capacity used in hog farming and pork processing
facilities
GLOSSARY OF TECHNICAL TERMS
–4 2–


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“GWh” gigawatt hour, the quantity of energy produced or
consumed by a piece of equipment with power of one
gigawatt for one hour
“HACCP” hazard analysis and critical control points, a food safety
management system used in hog farming and pork
processing to identify and control potential hazards
“hog” pig(s) used for slaughter, processing and sale
“HSE system certification” health, safety and environment management system
certification, an international standard that establishes a
framework for organizations to effectively manage and
continuously improve their health, safety and
environmental performance
“hydrogen sulfide” a highly toxic and flammable gas that can be produced in
manure storage facilities on pig farms
“ID” identity
“IoT” Internet of Things, physical objects with sensors,
processing ability, software, and other technologies that
connect and exchange data with other devices and
systems over the Internet or other communications
networks
“IP” intellectual property
“ISO9001” an international standard for quality management systems
that helps organizations meet customer and regulatory
requirements
“IUCN Ia-VI” the international union for conservation of nature’s
classification system for protected areas, ranging from
strict nature reserves (Ia) to protected landscapes (VI)
“kWh” kilowatt-hour
“lactation” the process of producing and secreting milk by the
mammary glands of a female mammal, such as a sow
GLOSSARY OF TECHNICAL TERMS
–4 3–


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“LEAP” livestock environmental assessment and performance, a
framework developed by the Food and Agriculture
Organization of the United Nations to assess the
environmental performance of livestock supply chains
“LSEG Data & Analytics” London Stock Exchange Group Data & Analytics, a
global provider of financial market data and
infrastructure
“MAP” modified atmosphere packaging, the practice of
modifying the composition of the internal atmosphere of
a package in order to improve the shelf life
“mu” a traditional Chinese unit of area measurement,
equivalent to approximately 666.67 square meters
“MW” megawatt
“OECD” the Organization for Economic Cooperation and
Development, a unique forum where the governments of
38 democracies with market-based economies collaborate
to develop policy standards to promote sustainable
economic growth
“palletizing” the process of arranging and stacking products or goods
onto a pallet for efficient storage and transportation
“Paris Agreement” a global treaty aimed at combating climate change
“PDA” personal digital assistant, a handheld computing device
that can be used for a variety of tasks, such as data
collection and management
“PED” porcine epidemic diarrhea, a condition caused by the
porcine epidemic diarrhea virus that leads to severe
gastrointestinal disease in pigs
“Porcine Reproductive and
Respiratory Syndrome”, or
“PRRS”
a viral disease that affects domestic pigs, causing
reproductive problems and respiratory issues
“pork cuts” piece of meat separated from carcass during butchering
“PSY” piglets weaned per sow per year
GLOSSARY OF TECHNICAL TERMS
–4 4–


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“purebred” bred from parents of the same breed
“R&D” research and development
“RGV” reach stacker, a type of forklift used for handling and
stacking containers in logistics and transportation
applications
“ROE” return on equity
“reproductive sow” adult female pig(s) used for breeding offspring, which
normally have been mated naturally or inseminated
artificially
“SSAP” or “Soy Sustainability
Assurance Protocol”
a certified aggregate approach audited by third parties
that verifies sustainable soybean production at a national
scale in the U.S.
“suckling piglet” young piglet between birth and weaning
“tce” ton of coal equivalent, a unit of energy defined as the
amount of energy released by burning one ton of coal
“three-breed production system” a production system that uses three different breeds of
pigs to take advantage of hybrid vigor and produce
finished hogs
“TNFD” Taskforce on Nature-related Financial Disclosures, a
framework that helps organizations assess and disclose
their dependencies and impacts on nature
“total unit cost” the total costs and expenses per kilogram (live weight
equivalent) incurred in hog farming, including operating
costs, as well as selling and distribution expenses,
general and administrative expenses, research and
development expenses and financial expenses
“two-breed rotational cross
system”
a crossbreeding system, under which two breeds are
mated and the resulting female offspring are kept as
replacements and mated to one of the breeds, and in
following generations, females are bred to the opposite
breed of their sire
“two-breed sow” sows used in the two-breed rotational cross
GLOSSARY OF TECHNICAL TERMS
–4 5–


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“weaner” a young pig that has been weaned from the sow
“WMS” warehouse management system, a set of policies and
processes intended to organize the work of a warehouse
or distribution center, and ensure that such a facility can
operate efficiently and meet its objectives
“µm” micrometer
GLOSSARY OF TECHNICAL TERMS
–4 6–


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We have included in this prospectus forward-looking statements. Statements that are
not historical facts, including statements about our intentions, beliefs, expectations or
predictions for the future, are forward-looking statements.
This prospectus contains certain forward-looking statements relating to our Company, our
subsidiaries and consolidated affiliated entities that are based on the beliefs of our management
as well as assumptions made by and information currently available to our management. When
used in this prospectus, the words “aim”, “anticipate”, “believe”, “could”, “expect”, “going
forward”, “intend”, “may”, “ought to”, “plan”, “project”, “seek”, “should”, “will”, “would”
and the negative of these words and other similar expressions, as they relate to our Group or
our management, are intended to identify forward-looking statements. Such statements reflect
the current views of our management with respect to future events, operations, liquidity and
capital resources, some of which may not materialize or may change. These statements are
subject to certain risks, uncertainties and assumptions, including the other risk factors as
described in this prospectus. Y ou are strongly cautioned that reliance on any forward-looking
statements involves known and unknown risks and uncertainties. The risks, uncertainties and
other factors facing our Group which could affect the accuracy of forward-looking statements
include, but are not limited to, the following:
 changes in the macro environment, regional and global economy, as well as industry
trends related to our operations;
 our ability to successfully implement our business plans, strategies, objectives and
goals;
 our ability to obtain adequate capital resources to fund future development plans;
 our ability to control costs, as well as to achieve and maintain operational efficiency;
 changes in our customers’ demands and expectations;
 changes in the competitive landscape of the industries where we operate;
 our ability to protect our reputation and brand image, as well as trademarks,
technologies, knowhow, patents and other intellectual property rights;
 changes in local economic and political conditions and changes in compliance with
international laws and regulations in the countries and regions where we operate;
and
 developments in technology and our ability to successfully keep up with
technological advancement.
FORW ARD-LOOKING STATEMENTS
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You should carefully consider all of the information in this document, including the
risks and uncertainties described below, before making an investment in our H Shares.
The following is a description of what we consider to be our material risks. Any of the
following risks could have a material adverse effect on our business, financial condition
and operating results. In any such case, the market price of our H Shares could decline
and you may lose all or part of your investment.
These factors are contingencies that may or may not occur , and we are not in a
position to express a view on the likelihood of any such contingency occurring. The
information given is as of the Latest Practicable Date unless otherwise stated, will not
be updated after the date hereof, and is subject to the cautionary statements in the section
headed “Forward-Looking Statements” in this document.
We believe there are certain risks and uncertainties involved in our operations, some of
which are beyond our control. We have categorized these risks and uncertainties into: (i) risks
relating to our business and industry; (ii) risks relating to the local laws and regulations of the
jurisdictions where we conduct business; and (iii) risks relating to the Global Offering.
Additional risks and uncertainties that are presently not known to us or not expressed or
implied below or that we currently deem immaterial could also harm our business, financial
condition and operating results. Y ou should consider our business and prospects in light of the
challenges we face, including those discussed in this section.
RISKS RELATING TO OUR BUSINESS AND INDUSTRY
Our operating results are substantially affected by the market selling prices of hogs and
meat products.
Our operating results are significantly affected by the market selling prices of hogs and
meat products, which are determined by constantly changing market forces of supply and
demand as well as other factors, over which we have little or no control. These factors include:
 macroeconomic conditions;
 dynamics of supply and demand in the relevant markets;
 competition;
 animal diseases;
 government regulations and actions, particularly regarding government intervention
in the market selling prices of hogs and meat products, and environmental
protection; and
 standardization of operations and development of technologies.
RISK FACTORS
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According to Frost & Sullivan, before 2022, hog prices exhibited strong cyclicality,
primarily due to limited penetration of large-scale farming, absence of effective production
control policies, and inadequate capacity for flexible supply adjustment and disease
management. In 2023, due to the increased hog supply, the average market selling prices of
hogs decreased to RMB15.1 per kg. In 2025, primarily driven by short-term fluctuations in
supply and demand, the average market selling prices of hogs decreased to RMB13.8 per kg.
Our profitability is dependent on the market selling prices of hogs and meat products. If
the market selling prices go down, or any unexpected supervening event occurs in the market
that alters the market condition in an unfavorable direction, our ability to generate sales
revenue may be materially and adversely affected and we may be unable to remain profitable.
Unfavorable pricing can lead to potentially low profit margins or even loss-making situations.
The price fluctuations in 2023 and 2025 had a direct and adverse impact on our revenue, gross
profit, net profit and overall financial performance in the relevant periods. According to Frost
& Sullivan, in 2025, the average market selling price of finished hogs decreased from
approximately RMB15.1 per kg in the first quarter to RMB14.6 per kg in the second quarter
and RMB14.0 per kg in the third quarter, and further decreased to RMB11.6 per kg in the fourth
quarter. Moreover, any delay, inactivity or omission in response to market changes may result
in inappropriate or undesirable management decisions which may, in turn, materially and
adversely affect our revenue and operating results.
Increases in the cost of raw materials used in our operations, especially feed ingredients,
may lead to declines in our margins and operating results.
Any fluctuations in the prices of raw materials may have a significant impact on both our
cost structure and our operating results. Our raw materials mainly include feed ingredients,
such as corn, wheat and soybean meal. The purchase prices of raw materials are determined by
continually changing market forces of supply and demand as well as other factors, over which
we have limited or no control. These factors include:
 macroeconomic conditions;
 dynamics of supply and demand in the relevant markets;
 weather conditions, and the supply of feed ingredients;
 international relationships and geopolitical tensions, as well as government
regulations and actions, including import restrictions and tariffs; and
 transportation and storage costs.
Raw materials have experienced volatility in selling prices due to various factors, such as
policies and dynamics of supply and demand in the relevant markets. See “Industry Overview
— China’s Hog Farming Industry — Cost of Hog Farming and Hog Feed in China.” We will
continue to be exposed to price volatility in raw materials in the future, and any significant and
RISK FACTORS
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--- page 61 ---
unforeseeable increase in the prices of raw materials will elevate our operating costs and have
an adverse impact on the profitability of our business. There can be no assurance that we will
be able to pass on to our customers all or part of any increased costs from time to time, in a
timely manner or at all, which could have a material adverse effect on our business, operating
results and financial condition.
The outbreak of contagious animal diseases among hogs and the adverse publicity
associated with these could significantly affect our production, the demand for our
products and our business operations.
We are exposed to risks relating to our ability to maintain hog health and control animal
diseases. Many countries have encountered animal diseases. As there might not be effective
vaccines available on the market, any occurrence of animal diseases might adversely impact
our operational production. The outbreak of such diseases will reduce the number of hogs
produced, slow the hog finishing process, hamper the growth of hogs to finishing size, cause
expensive medication and vaccination costs, require the quarantine or compulsory disposal of
infected hogs and, in extreme cases, disposal of large numbers of hogs and temporary
suspension of our business operations in the affected facilities, any of which could adversely
affect our production or our ability to sell products. Adverse publicity concerning any animal
disease or health issues could also cause customers to lose confidence in the safety and quality
of meat products. There can be no assurance that there will be no outbreaks of animal diseases
in the future. If we experience any outbreaks of animal diseases or any adverse publicity
associated, our business, results of operations and financial condition may be adversely and
materially affected.
Any perceived or real food safety or health issues related to our hogs, meat products,
operations or the food industry generally could adversely affect our reputation, our
ability to sell products and our financial performance, as well as subject us to liability
claims and regulatory actions.
Our meat products are produced from self-produced finished hogs. We also purchase feed
ingredients such as corn, wheat and soybean meal. Therefore, we are subject to risks affecting
the food industry generally, including risks posed by the following:
 food spoilage;
 food contamination;
 contamination of feed ingredients;
 consumer product liability claims; and
 the expense associated with purchasing and the possible unavailability of product
liability insurance.
RISK FACTORS
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If our feed ingredients or our products are found to be spoiled or contaminated, or
reported to be associated with any such incidents, our reputation, business, financial condition,
operating results and prospects could be materially and adversely affected.
There can be no assurance that contamination of our feed ingredients or products will not
occur during the transportation, production, distribution and sales processes due to reasons
unknown to us or beyond our control. Furthermore, meat products are susceptible to
contamination by disease-producing organisms or pathogens which are generally found in the
environment. One or more of such organisms or pathogens could be present in pork products
produced from our finished hogs as a result of food processing. These organisms and pathogens
can also be introduced to final products as a result of improper handling during transportation,
in the further processing or at the consumer level.
Any food safety issues can also subject us to product liability claims, adverse publicity
and government scrutiny, investigation or intervention, resulting in increased costs, and any of
these events could have a material adverse effect on our reputation, business, financial
condition, operating results and prospects.
We operate in a highly competitive industry and may face increased competition. New
competitors who enter the market could have an adverse impact on our businesses and
prospects.
Both the hog farming industry and the hog slaughtering and processing industry in China
are highly fragmented. We face intense competition in terms of safety and quality, costs, price
and distribution. We face increasing competition from local, national and foreign peers.
Competitors may develop products of a comparable or superior quality to ours, increase cost
competitiveness by improving the operating model, or adapt more quickly than we do to meet
the evolving consumer preferences or market trends.
The consolidation among industry participants may produce stronger competitors as well
as competitors more specialised in particular segments and geographic markets. Furthermore,
our competitors in the hog slaughtering and processing industry may form alliances to achieve
scales of operations or sales networks that would make it more difficult for us to compete. To
expand market share or enter into new markets, some of our competitors may use aggressive
pricing strategies, greater incentives and subsidies for customers. We may not be able to
compete effectively with our current or potential competitors, and our inability to compete
successfully against our competitors could result in loss of market share or reduced profit
margins, both of which could adversely impact our operating results.
We incurred net losses in the past.
In 2023, we recorded a net loss of RMB4,167.9 million due to an overall decrease in
selling prices. See “Financial Information — Consolidated Income Statement.” We may not be
able to continually maintain profitability in the future. We believe that our future revenue
growth will depend on, among other factors, our ability to manage price fluctuations of
RISK FACTORS
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products and raw materials, maintain effective control over operating costs and expenses,
enhance product quality, adapt to competitive market conditions and regulatory changes, secure
sufficient capital for business expansion, retain qualified personnel and maintain robust
internal control systems. We may also incur unforeseen expenses, or encounter difficulties,
complications or delays in deriving revenue or achieving profitability. A failure to address any
of these risks and uncertainties could impact our business and financial performance as well
as our operating results.
We had net current liabilities in the past, which can expose us to liquidity risk, and such
positions may recur if our profitability deteriorates in the future.
We had net current liabilities of RMB15,588.8 million, RMB31,076.2 million,
RMB24,157.9 million and RMB16,244.7 million as of December 31, 2022, 2023 and 2024 and
as of September 30, 2025, respectively, which were mainly short-term loans and accounts
payables. Such positions can expose us to the risk of shortfalls in liquidity. Any difficulty or
failure to meet our liquidity needs as and when needed can have a material adverse effect on
our business, financial condition, results of operations and prospects. The positions of net
current liabilities may recur if our profitability deteriorates in the future.
We have significant productive biological assets, which may depreciate faster than
expected, and consumable biological assets, which may incur impairment losses.
As of December 31, 2022, 2023 and 2024 and as of September 30, 2025, the carrying
amount of our productive biological assets was RMB7,334.8 million, RMB9,315.1 million,
RMB9,355.1 million and RMB7,741.8 million, respectively. Our productive biological assets
presented at cost less accumulated depreciation and impairment provision. See “Financial
Information — Material Accounting Policy Information — Biological Assets.” The productive
biological assets may depreciate faster than expected. Our financial performance and operating
results could be negatively impacted as a result.
In addition, we conduct impairment assessments for our consumable biological assets in
accordance with applicable accounting standards. As of December 31, 2022, 2023 and 2024
and as of September 30, 2025, the carrying amount of our consumable biological assets was
RMB28,498.2 million, RMB32,809.3 million, RMB33,068.5 million and RMB29,970.1
million, respectively. These assets are susceptible to value fluctuations due to factors beyond
our control including, but not limited to, changes in the market selling price of hogs, the
occurrence of diseases or health issues, natural disasters and changes in regulatory
requirements affecting the hog industry. Any significant adverse changes in these factors could
result in a substantial impairment of our consumable biological assets, necessitating the
recognition of impairment losses that could materially and adversely affect our financial
performance and operating results.
RISK FACTORS
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Our hog inventory and breeding hogs may not be readily converted into cash, and thus we
are subject to liquidity and asset fixity risks in our operations.
A significant portion of our assets consists of biological assets, such as suckling piglets,
hogs under the finishing period and breeding hogs. Generally, after the sows are selected for
breeding, a gestation period is generally approximately 114 days, and piglets are born, which
is followed by a lactation period of 21 to 25 days. Piglets are weaned at a body weight of
approximately 6–7 kg and enter the nursing period for approximately 54 days, after which they
are transferred to finishing houses. The finishing period lasts approximately 100–120 days, by
the end of which hogs reach approximately 120 kg and are ready for sale as finished hogs. The
sales of piglets and breeding hogs are subject to supply and demand dynamics, as hog farmers
are typically reluctant to expand hog production capacity with additional piglets and breeding
hogs during the market downturn, characterized by depressed hog prices. As of December 31,
2022, 2023 and 2024 and 30 September, 2025, our biological assets as measured by the V aluer
amounted to RMB46,844.5 million, RMB44,009.0 million, RMB54,750.6 million and
RMB44,846.5 million, respectively. See “Financial Information — Biological Assets and
V aluation”. Such inventories cannot be readily converted into cash. External factors, such as,
adverse macroeconomic conditions, disease outbreaks or supply chain disruptions may further
limit our ability to monetize these assets, potentially reducing cash flows and operational
flexibility. Such liquidity and asset fixity risks in our operations could materially and adversely
affect our business, financial condition and results of operations.
The execution of our investment, maintenance or upgrades related to production facilities,
equipment, technologies and other operational aspects may not always be carried out
successfully.
We continually maintain our existing production facilities and aim to optimize our
production capacity by upgrading existing equipment and facilities, purchasing new facilities
and improving production techniques. As our business grows, we may need to expand our
production capacity through various measures, including constructing new production facilities
and expanding existing ones.
We anticipate that we will continually make efforts to upgrade our production facilities.
If these upgrade plans are not successfully implemented, it could have an adverse impact on
our business growth. Our new production facilities may not commence production on time and
our upgrade plans may not be successful. Several factors may delay our plans and increase our
costs, including: (i) a failure to obtain regulatory approvals, permits or licenses from the
relevant government authorities in a timely manner; (ii) a shortage, late delivery or increased
prices of building materials and production equipment, as well as various other factors
affecting construction progress, resulting in a delay in the construction of the new production
facilities; and (iii) technological changes, capacity expansion or other changes to our plans for
new production facilities necessitated by changes in market conditions.
RISK FACTORS
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Furthermore, if market demand declines in the future, or if the upgrade plans do not
generate the expected returns on investment, our financial condition may be adversely affected.
Changes in our relationships with customers, or in the trade terms with these customers,
may reduce our sales and profit.
Our customers in our hog business are mainly hog dealers, slaughtering plants, hog
farming enterprises and individual hog farmers, while our customers in the slaughtering and
meat product business mainly include wholesale market customers, retailers, restaurants,
canteens and food processors. Any one of the following events could cause fluctuations or
reductions in our revenue and might have an adverse effect on our financial condition and
operational results:
 reductions in, delays or cancellations of orders from one or more of our customers;
 a failure to maintain relationships with our existing customers;
 a failure to establish relationships with new customers on favorable terms;
 an inability to timely identify and appoint additional or replacement customers upon
the loss of one or more of our customers; and
 any breach of sales contracts by our customers.
There is no assurance that we will be able, in the future, to renew our sales agreements
with our customers on terms no less favorable than those existing, or at all. Our business could
suffer significant setbacks in sales and operating income if our customers’ business plans or
markets change significantly, or if we lose one or more of our major customers. To the extent
that we provide concessions or trade terms that are more favorable to our customers, our sales
margins may be reduced. There is no assurance that we will be able to maintain stable and
long-term relationships with all our customers.
Expansion into new geographic markets and the establishment of new sales channels, in
which we have limited operating experience and reputation, may present operating and
marketing challenges that are different from those we currently face in our existing markets
and sales channels. New markets and sales channels may have different competitive dynamics,
consumer preferences and discretionary spending patterns compared with our existing markets
and sales channels. Consumers in new markets and sales channels are likely to be unfamiliar
with our products and we may need to build awareness in the relevant markets and establish
sales channels by increasing investment in marketing activities. As a result, any product we
introduce in new markets may be more expensive in terms of production and distribution, and
takes longer to reach expected sales and profit levels than in our existing markets which, in
turn, could affect the viability of these new operations and our overall profitability.
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We rely on our own production facilities for our business operations. Any unexpected
damages to production facilities may cause interruptions to our operations at various
levels.
Our hog farms and slaughtering plants across China are likely to subject to the impact of
catastrophic incidents, such as fires, earthquakes, snowstorms, floods or other natural disasters.
If such catastrophic incidents occur in the proximity of our production facilities the
infrastructure, fixed assets and equipment of the production facilities may be damaged and the
production process may be interrupted to a varying extent, which may further lead to
significant economic losses and restoration expenses. The destruction of hog farms may also
cause illness or death to the hogs, which may materially and adversely affect our sales revenues
and operating results. There can be no assurance that we will be fully insured or otherwise
compensated for such incidents. Any failure to take adequate steps to mitigate the potential
impact of unforeseeable incidents, or to effectively respond to such incidents if they occur,
could adversely affect our business, financial condition and operating results.
We may be unable to effectively manage our inventory levels.
Our inventories primarily comprise consumable biological assets, feed ingredients and
finished goods. We adopt stringent inventory control and maintain appropriate levels of
inventory. We periodically review our inventory levels for slow-moving inventory,
obsolescence or declines in market value. We manage our inventory levels principally based on
anticipated demand. Customer demand, however, can be affected by numerous uncertainties,
including market conditions, the outbreak of diseases, regulatory approvals and other factors
beyond our control. Our inventories increased from RMB38,251.7 million as of December 31,
2022 to RMB41,930.8 million as of December 31, 2023, and further increased to RMB41,969.8
million as of December 31, 2024. Our inventories decreased from RMB41,969.8 million as of
December 31, 2024 to RMB36,520.3 million as of September 30, 2025. If we fail to manage
our inventory levels effectively we may be subject to a higher risk of inventory obsolescence,
a decline in the value of inventories and potential inventory write-downs. Procuring additional
inventory may also require us to commit substantial working capital, which would prevent us
from using this capital for other purposes. Any of the foregoing may materially and adversely
affect our operating results and financial condition.
We plan to expand our presence in overseas markets and thus bear the risks associated
with operations in those overseas markets.
We plan to expand our international presence and participating in R&D collaborations in
overseas markets. Development and expansion in overseas markets, along with our R&D
efforts, have been part of our long-term strategy. Our operations in overseas markets are
subject to certain risks relating to specific regions, including:
 economic and political conditions;
 different tax rates as well as different import and export licensing requirements;
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 fluctuations in foreign currency exchange rates;
 costs associated with understanding local market trends;
 difficulties and costs associated with obtaining or maintaining intellectual property
rights in different regions;
 difficulties and costs associated with complying with, and enforcing remedies under,
a wide variety of complex domestic and international laws, treaties and regulations;
and
 changes in international trade policies and regulations, including economic
sanctions, export controls, import restrictions and the imposition of tariffs and other
trade barriers.
We face risks relating to fluctuations in the market selling prices of substitute products.
Fluctuations in the market selling prices of substitutes for our products, especially
decreases in the market selling prices of substitute protein products (such as beef and chicken),
may affect the market selling prices of pork products. As a result of any decrease in the market
selling prices of substitute protein products, consumers may purchase less pork and opt for the
substitute products to satisfy their daily demand for protein. This may further lead to
unforeseeable consequences such as permanent changes in consumer taste and preferences that
are not beneficial to us. However, we have limited or no control at all over the market
conditions, competitive landscape and regulatory regime of the industries in which our
substitute products operate. Although we are able to adjust our selling prices in response to
decreases in the market selling prices of substitute products, our profit margin may shrink
accordingly due to pressure from substitute products. This would, in turn, have a material
adverse impact on our business, financial condition, operating results and prospects.
We rely on our suppliers for feed ingredients and other raw materials. Suppliers may fail
to deliver as required in terms of time, cost, quality and quantity.
A stable supply of feed ingredients that meet our standards is crucial to our operations.
Nearly all of the feed ingredients we used during the Track Record Period were purchased from
third-party suppliers, and to a less extent, some feed ingredients were produced in-house. We
expect to continue to procure feed ingredients from our suppliers. We also rely on suppliers for
other raw materials such as medicines and farming facilities. There can be no assurance that
we will be able to source feed ingredients and other raw materials that can meet our
requirements in terms of reasonable prices or terms or at all. In the event that our supply of feed
ingredients and other raw materials is interrupted, our business, financial condition, operating
results and prospects may be materially and adversely affected.
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When we procure feed ingredients and other raw materials from overseas suppliers, the
transaction amounts may be denominated in foreign currency instead of Renminbi.
Accordingly, we are exposed to foreign exchange rate risk. See “Risk Factors — Risks Relating
to the Local Laws and Regulations of the Jurisdictions Where We Conduct Business — Policies
and regulations regarding foreign currency conversion may impact our foreign exchange
transactions.”
ESG matters impact our business and reputations
We are subject to environmental protection laws and regulations as well as the complex
and evolving ESG requirements, which require us to devote substantial time and resources for
compliance and could adversely affect our business and financial performance.
Our business is subject to extensive and increasingly stringent environmental protection
laws and regulations. There is an increasing focus on corporate responsibility and a number of
regulations and requirements on ESG performance pose reputational, regulatory and other risks
to us. We believe that it is our responsibility to devote substantial time and resources to develop
technology and products designed to reduce our carbon footprint and maintain environmentally
friendly business operations. The process of developing new production technologies and
enhancing existing production technologies to mitigate climate change is often complex, costly
and uncertain, and we may pursue strategies or make investments that do not prove to be
commercially successful in the time frames expected, or at all. Moreover, not all of our
competitors may seek to establish climate or other ESG targets and goals, or at a level
comparable to ours, which could adversely affect our competitiveness in the relevant market.
In particular, stringent PRC environmental protection laws and regulations require us to
adopt measures to effectively control and properly dispose dead hogs, manure, waste gases,
wastewater, noise and other environmental waste materials. During the Track Record Period,
we encountered allegations and regulatory actions regarding environmental non-compliance
issues. These incidents primarily related to emission standards, waste management and
environmental impact assessment approvals. See “Business — Legal Proceedings and
Compliance.” There is no assurance that we will not be challenged or penalized for our
non-compliance with environmental protection laws and regulations as the interpretations and
requirements of the competent authorities may vary in the future. We have invested substantial
resources into environmental protection measures, including manure treatment, waste water
and waste gas processing, and soil improvement projects to comply with environmental
protection laws. In addition, new environmental issues could arise and lead to currently
unanticipated investigations, assessments or costs.
Compliance with these ESG requirements and relevant environmental protection laws and
regulations requires additional investments of resources, and failure to comply could subject
us to, among other things, legal liability, fines, suspension of production, a loss of licenses to
operate certain facilities and other sanctions, interruptions to operations, securities litigation
and a general loss of investor confidence, any one of which could have a material adverse
impact on our business and financial performance. If we are unable to satisfy such new criteria
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or are unable to respond or perceived to be inadequately responding to sustainability concerns,
investors may conclude that our policies with respect to corporate responsibility are inadequate
and choose to invest in our competitors. We risk damage to our brand and our reputation in the
event that our corporate responsibility procedures or standards do not meet the standards set
by various third parties. In addition, in the event that we communicate certain initiatives and
goals regarding ESG matters, we could fail, or be perceived to fail, in our achievement of such
initiatives or goals, or we could be criticized for the scope of such initiatives or goals. Any of
these circumstances could cause negative publicity, and our business operations could be
adversely impacted.
We are subject to risks associated with animal welfare.
We take a variety of measures to improve animal welfare. For example, we provide hogs
with a comfortable environment, sufficient space, professional and timely care and smart
management measures to maintain their good health and energy. We also adopt CO
2 stun
technology to alleviate the pain experienced by hogs before the slaughtering process. However,
animal activists and other third-party groups may make claims and/or bring lawsuits against us
for our hog treatment measures, and there are no assurances as to the outcome of future claims
and lawsuits that could be brought against us. In addition, the associated negative publicity
could adversely affect our reputation and operating results.
We are subject to risks associated with managing future growth as well as maintaining
and expanding our operations.
Our future growth may depend on improving our production capacity and efficiency,
improving our technologies, introducing new products, maintaining our existing sales and
distribution network, and extending our sales network to new sales channels. Our ability to
achieve growth will be subject to a range of factors, including:
 exercising effective quality control and maintaining high-quality standards;
 strengthening our existing relationships with customers and expanding our sales
network;
 improving our breeding technology;
 enhancing our research and development capabilities;
 recruiting, training and retaining qualified personnel;
 controlling our operating costs and improving operational efficiency;
 prioritizing our operational, financial and management controls and systems in an
efficient and effective manner;
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 acquiring or renting land parcels of suitable size and location for our operation; and
 managing our supply chain.
Additionally, our expansion plans and business growth could strain our managerial,
operational and financial resources. Our ability to manage future growth will depend on our
ability to continue to implement and improve our operational, financial and management
systems on a timely basis and to expand, train, motivate and manage our workforce. There is
no guarantee that our personnel, systems, procedures and controls will be adequate to support
our future growth. A failure to effectively manage our expansion may lead to increased costs
and reduced profitability and may adversely affect our growth prospects. As we expand our
operations, we may encounter regulatory, commercial and other difficulties that may also
increase our operating costs.
Our success depends on our ability to retain our core management team and other key
personnel.
Our future business performance and prospects depend significantly on our key
management team, in particular our senior management as they are in charge of the overall
planning, development and execution of our business and operations. If any of our Directors
and/or any members of senior management were to terminate their services or employment we
may be unable to find suitable replacements in a timely manner, at acceptable cost, or at all.
In addition, competition for qualified personnel in China is intense and the availability of
suitable candidates may be limited. A failure to attract and retain key personnel could
materially and adversely affect our operating results and business prospects.
Failures or security breaches of our information technology systems could disrupt our
operations and negatively impact our business.
We use information technology systems to monitor our production processes, increase
efficiencies in our rearing operations and inventory management, as well as manage and
analyze our operations and financial information. Our smart systems and devices have been
applied to all aspects of hog farming. For example, we have established an IoT-and-Cloud
system to achieve data interconnection of the feeding, environmental control, inspection, raw
material sterilization, cleaning production and electric power systems of the facility. We also
use information technology to process financial information for internal reporting purposes and
to comply with regulatory, legal and tax requirements. In addition, we rely on information
technology for electronic communications with our facilities, personnel, customers and
suppliers. Our information technology systems may be vulnerable to various threats, including
the unauthorized disclosure of information, the unapproved alteration of data, cyber attacks,
electrical disruptions, system configuration errors and telecommunication malfunctions.
Although we have implemented protection and back-up schemes for our information
technology systems, these may not be sufficient. Any serious system failure or system
malfunction could negatively affect our operations, financial condition and reputation. Any
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unauthorized disclosure of information could compromise our trade secrets, confidential
information and customer information, which could adversely affect our operating results,
financial condition and reputation.
We may not be able to adequately protect our intellectual property and know-how, which
could materially and adversely affect our business.
Our current intellectual property rights, including our patents, copyrights and trademarks,
provide adequate protections to our business and are necessary for our operations. However,
there can be no assurance that our intellectual property applications will be approved by the
relevant governmental authorities, that our intellectual property rights will adequately protect
our business in the future, that we will be able to detect breaches or infringements of our
intellectual property rights, that our intellectual property rights will not be challenged by third
parties or found to be invalid or unenforceable, or that our intellectual property rights will be
effective in preventing third parties from utilizing similar business models, processes or brand
names to offer similar products that may or may not infringe our existing patents or other
intellectual property rights.
We may also be subject to disputes, claims or litigation involving our intellectual property
rights or third-party intellectual property rights and there may be claims that we infringe
third-party intellectual property rights. Any of these could disrupt our business and divert our
management’s attention from the operations. The costs associated with these types of disputes,
claims or litigation may be substantial and could have a material adverse effect on our
reputation, business, financial condition, operating results and prospects.
Personal injuries, damage to property or fatal accidents may occur in our production
facilities.
We use machinery and equipment in our production processes, such as slaughtering and
cutting equipment, that are potentially dangerous and may cause industrial accidents and
personal injuries to our employees. In addition, our employees may violate safety measures or
other related rules and regulations, which may cause industrial accidents. For example, our
operations involve the use and maintenance of sewage treatment systems, confined space
storage tanks, material handling equipment and construction tools, which, if not handled
properly, would be susceptible to incidents. Some of our employees or third-party contractors
may fail to comply with the relevant safety protocols or take the required safety measures,
which would lead to work-safety related incidents. In 2022, 2023, 2024 and the nine months
ended September 30, 2025, the number of employee injuries in work safety incidents where we
received administrative penalties were three, nil, nil and nil, respectively, accounting for
approximately 0.0021%, nil, nil and nil of our total employees for the respective periods. In
2022, 2023, 2024 and the nine months ended September 30, 2025, the number of employee
fatalities in all work safety incidents amounted to two, two, nil and nil, respectively, accounting
for 0.0014%, 0.0015%, nil and nil of our total employees for the respective periods. Any
significant accidents could interrupt production and result in personal injuries, damages to
property, fatal accidents and legal and regulatory liabilities. In addition, potential industrial
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accidents leading to significant property loss or personal injuries may subject us to claims and
legal proceedings, and we may be liable for medical expenses and other payments to employees
and their families as well as fines or penalties. As a result, our reputation, business, operating
results and financial condition may be materially and adversely affected.
We are subject to various risks relating to Third-Party Payment Arrangements.
In 2022, 2023 and 2024 and the nine months ended September 30, 2025, certain customers
(the “ Relevant Customers ”) settled payments with us through accounts belonging to parties
other than the contractual counterparties (the “ Third-Party Payment Arrangements ”).
Relevant Customers during the Track Record Period primarily consisted of customers of our
hog business and our slaughtering and meat product business in the form of individuals,
individual industrial and commercial households, sole proprietorship enterprises, public
institutions and corporate entities. To the best of our knowledge, the designated third-party
payors primarily consisted of persons affiliated with the Relevant Customers, such as legal
representatives, shareholders, relatives (of the owners, shareholders or controllers), or
affiliated entities of the Relevant Customers. In 2022, 2023 and 2024 and the nine months
ended September 30, 2025, the aggregate amount the Relevant Customers settled under the
Third-Party Payment Arrangements was RMB32.3 million, RMB47.2 million, RMB211.5
million and RMB235.8 million, respectively, which accounted for 0.026%, 0.043%, 0.153%
and 0.211% of our total revenue, respectively, in the same periods. We have terminated all
Third-Party Payment Arrangements as of the Latest Practicable Date. During the Track Record
Period, no individual Relevant Customer had made a material contribution to our revenue. See
“Business — Sales Network — Third-party Payment.”
We are subject to risks related to such Third-Party Payment Arrangements, including: (i)
potential claims from third-party payors for the return of funds, as they were not contractually
obligated to us, and possible claims from liquidators of third-party payors; and (ii) potential
money laundering risks, as we have limited knowledge about the source and purpose of the
funds used by the third-party payors. In the event of any claims or legal actions, whether civil
or criminal, initiated against us by third-party payors or their liquidators regarding Third-Party
Payments, or for violation or non-compliance with laws and regulations, we would need to
allocate significant financial and managerial resources to defend ourselves. We may need to
return the payments for the products we sold which could adversely affect our business,
prospects, financial condition, operating results and cash flows.
We sell hogs to hog dealers and meat products to wholesale market customers, over whom
we have limited control.
We sell hogs to hog dealers under our hog business, and meat products to wholesale
market customers under our slaughtering and meat product business, who then resell our
products to the downstream of the industry. In 2022, 2023, 2024 and the nine months ended
September 30, 2024 and 2025, our revenue to hog dealers accounted for 48.6%, 41.5%, 41.4%,
42.6% and 34.8% of the total revenue from our hog business (before intersegment elimination),
respectively. Our revenue to wholesale market customers accounted for 72.2%, 69.9%, 68.5%,
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68.0% and 70.1% of the total revenue from our slaughtering and meat product business (before
intersegment elimination), in 2022, 2023, 2024 and the nine months ended September 30, 2024
and 2025, respectively. See “Business — Sales Network.” Any one of the following events
could cause fluctuations or declines in our revenue and could have an adverse effect on our
financial condition and operating results:
 reductions, delays or cancellations of orders from one or more of our hog dealers
and/or wholesale market customers;
 the quality of after-sales service provided by our hog dealers and/or wholesale
market customers, which could harm our reputation;
 a failure to renew agreements and maintain relationships with our existing hog
dealers and/or wholesale market customers; and
 any breach of agreements by our hog dealers and/or wholesale market customers.
Our relationships with hog dealers and/or wholesale market customers are characterized
as seller and buyer relationships that do not grant us control over their operations, inventories
or resales. We cannot assure you that we will not lose any of our hog dealers and/or wholesale
market customers to our competitors, which may result in reductions in the coverage of our
sales network or in our sales volume. In addition, there can be no assurance that we will be
successful in detecting any non-compliance by our hog dealers and/or wholesale market
customers with the provisions of our agreements. Non-compliance by our hog dealers and/or
wholesale market customers could, among other things, negatively affect our reputation, the
demand for our products and our relationships with other customers. Overall, any significant
disruption in sales to our hog dealers and/or wholesale market customers, including as a result
of the inability or unwillingness of these customers to continue purchasing our products, or
their failure to properly manage their business, could materially and adversely affect our
business, operating results, financial condition and cash flows.
Changes in national policies may impact our operations and financial performance.
Our business and financial performance are subject to potential impacts from changes in
national policies and regulations affecting the hog farming industry, including those relating to
environmental protection, land use, biosecurity, and productive sow inventory management.
For instance, regulatory requirements may impose restrictions on the size and inventory
structure of hog farms, introduce additional compliance costs, or mandate adjustments to
productive sow inventory depending on industry conditions. Despite our efforts to monitor and
assess regulatory developments and adjust operations, including managing our productive sow
inventory to comply with regulatory requirements, there remains a risk of non-compliance due
to unforeseen changes or complexities in those requirements. Such non-compliance could
result in operational disruptions, or limitations on our production capacity.
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We are exposed to the risk of litigation, claims and disputes, which may cause us to pay
significant damages and incur other costs.
We are currently not involved in any litigation or legal proceedings that we believe could
have a material adverse effect on our financial condition. However, we may, at times, be
involved in litigation or legal proceedings during the ordinary course of business operations,
or related to, among other things, product or other types of liability, labor disputes or contract
disputes.
Substantial liability arising from a lawsuit judgment or a significant regulatory action
against us or a disruption in our business arising from adverse adjudications in proceedings
against the Directors, officers or employees could have a material adverse effect on our
business, financial condition and operating results. If we become involved in any litigation or
other legal proceedings in the future, the outcome of such proceedings could be uncertain and
could result in settlements or results that could adversely affect our financial condition.
Moreover, even if we ultimately prevail in the litigation, regulatory action or investigation,
such proceedings could result in us incurring additional costs and significantly harm our
reputation, as well as take up a significant amount of time and attention of our management,
diverting their focus from the operations of our Company, which could materially affect our
business, financial condition and operating results.
Any failure to secure or renewal of the current leases on our properties on commercially
acceptable terms or at all, as well as any claim or dispute related to the title of the
properties leased by us, could adversely affect our growth prospects and business
condition.
We entered into lease agreements with third-party landlords for properties essential to our
operations. There is no assurance that we can obtain renewals of all the lease agreements upon
expiry on at least the same terms or at all. In case of any non-renewal or termination or
discharge of our lease agreements, we may have to shut down our properties or consider
relocating the relevant properties to another site depending on our business needs from time to
time. In such events, we could incur relocation costs, which could, in turn, result in a financial
strain on our operations and the diversion of management resources.
Furthermore, due to the acceleration of urbanization in the PRC in recent years, there may
be fewer properties planned for farming purposes that are available for lease by us. The
prescribed use of land may also be changed in accordance with local policies. Therefore, if we
are unable to seek proper properties for production, our growth prospects may be materially
and adversely affected.
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We may face risks relating to labor relations, labor disputes, labor shortages and
increases in labor costs.
Our success depends on our ability to hire, train, retain and motivate our employees. Any
deterioration in labor relations with our employees could lead to labor disputes, which may
disrupt our production and operations, adversely affecting our business and financial
performance. Despite our efforts to provide a safe working environment to avoid occupational
injuries, we may still face liability claims, negative publicity and government investigations or
interventions related to workplace safety or employee injuries. Such incidents could result in
a deterioration of our labor relations with employees and damage our reputation. Additionally,
with the growth of the economy, average wages of our employees are expected to increase. Any
significant increase in labor costs could adversely affect our profitability, business and
financial performance.
Companies operating in the PRC have to participate in various employee benefit plans
required by the government, including certain social insurance, housing provident funds and
other welfare-oriented payment obligations. The requirement and implementation of employee
benefit plans may vary in line with the differing levels of economic development in different
locations in the PRC, while the relevant government authorities may examine whether an
employer has made adequate payments of the requisite employee benefit payments. Those
employers who fail to make adequate payments as required may be subject to late payment
fees, fines and/or other penalties. During the Track Record Period and up to the Latest
Practicable Date, we had not been subject to any material administrative penalty imposed by
the relevant regulatory authorities regarding PRC social insurance and housing provident
funds. There is no assurance, however, that new laws and regulations or stricter interpretation
or enforcement of existing laws and regulations will not result in additional costs to our
employee benefit plans, which may adversely affect our operating results and financial
condition.
We may not have adequate insurance coverage.
We have maintained certain insurance coverage through external insurers during the
Track Record Period, see “Business — Insurance.” However, our insurance policies may not
provide adequate coverage for all the risks connected with our business operations. If we were
to incur substantial losses and liabilities that are not covered by our insurance policies, we may
be required to bear our losses to the extent that our insurance coverage is insufficient. As a
result, we could suffer significant costs, which could have a material and adverse effect on our
business, operating results and financial condition.
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We may be subject to tax disputes, additional tax liabilities or other administrative
actions in the future, and disagreement with tax authorities could adversely affect our
business, financial condition and results of operations.
Our operations are subject to, and may be adversely affected by, changes in tax laws and
regulations. Tax systems are generally complex and evolving, and the interpretation and
application of tax laws, regulations, and government circulars may vary among different
localities and tax authorities.
We are subject to periodic examinations by relevant tax authorities regarding our
fulfillment of tax obligations. Although we believe that we have complied with all relevant tax
laws and regulations in all material respects in the past, there can be no assurance that the tax
authorities will agree with our interpretation of certain tax matters. These authorities may adopt
different interpretations of the relevant rules and regulations. During the Track Record Period
and up to the Latest Practicable Date, twelve of our subsidiaries received tax treatment
decisions, administrative penalty matter notice, rectification order, and tax matter notices from
relevant tax authorities. See “Business — Properties — Tax Disputes in Relation to our
Properties.” In addition, during the Track Record Period and up to the Latest Practicable Date,
four of our subsidiaries received tax matter notices from relevant tax authorities in relation to
real estate tax, with no specific amount of tax underpayment determined and quantified in those
notices. As of the Latest Practicable Date, all four subsidiaries have been actively
communicating with the local tax authorities regarding the matters raised in those notices, and
no tax treatment decisions have yet been issued.
We cannot assure you that future determinations by relevant tax authorities will not result
in fines, penalties, or other actions that could adversely affect our business, financial condition
or results of operations. If we receive unfavorable decisions from the ongoing administrative
reconsideration procedures and administrative proceedings, or if other tax disputes arise in the
future, we may be required to pay the disputed amounts, including outstanding taxes and late
payment surcharges. Resolving such procedures and disputes may be time-consuming, costly,
and divert our management’s attention. Furthermore, any adverse outcome from these or future
disputes, or any adverse changes in tax laws and regulations, could result in additional tax
liabilities, which may have a material adverse effect on our business, financial condition and
results of operations.
The preferential tax treatment, grants and economic incentives that we currently enjoy
may be altered or terminated, which could have an adverse effect on our business,
financial position, operating results and prospects.
Pursuant to the EIT Law and the related implementation rules, our PRC subsidiaries that
engage in livestock rearing are exempt from corporate income tax on income derived from such
business. According to the EIT Law and the related implementation rules and the Circular of
the Ministry of Finance and the State Tax Administration on Releasing the Primary Processing
Ranges of Agricultural Products Entitled to Referential Policies on Enterprise Income Tax
(Trial Implementation) (Cai Shui [2008] No. 149), our PRC subsidiaries that carry out primary
processing of agricultural products (such as the hog slaughtering business) are exempt from
corporate income tax on income derived from that business. In addition, according to the
relevant regulations, the production and sale of hogs by our Company and our PRC subsidiaries
are considered as self-produced agricultural products, and the sales of eligible feed and
premixed products can enjoy a preferential V A T exemption policy. During the Track Record
Period, we received grants. See “Financial Information — Description of Major Components
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of our Results of Operations — Other Income” and “Financial Information — Description of
Major Components of our Results of Operations — Non-Operating Income.” Certain grants
were non-recurring in nature, we may not record such gains in the future.
There can be no assurance that the preferential tax treatment, grants and economic
incentives we enjoy will not be altered or terminated. Any alteration or termination of our
current preferential tax treatment, grants or economic incentives could have a material adverse
effect on our business, financial condition, operating results and prospects.
We have granted, and may continue to grant, share-based compensation awards under
our employee stock ownership plans and restricted share schemes, which may result in
increased share-based payment expenses and dilute the shareholding of existing
shareholders.
We adopted employee stock ownership plans and restricted share schemes for the purpose
of granting share-based compensation awards to our officers, directors, employees and other
eligible persons to recognize their contributions and motivate them to further contribute to our
development. Through non-public offerings of A shares, we issued 22,353,714 A shares and
40,535,062 A shares to our first and second employee stock ownership plans in December 2015
and April 2017, respectively. In August 2017, we purchased on A Share market a total of
26,692,421 A Shares for our third employee stock ownership plan. Additionally, we adopted
two restricted share plans in 2019 and 2022. Under the 2019 Restricted Shares Incentive Plan,
42,710,500 and 11,840,900 restricted A Shares were granted to 909 and 984 grantees in
November 2019 and November 2020. Under the 2022 Restricted Shares Incentive Plan,
59,685,191 restricted A Shares were granted to 5,577 grantees in March 2022. As of the Latest
Practicable Date, all A Shares subscribed by the first and the third employee stock ownership
plan had been sold on the A Share market and the plans have been terminated, and there was
no outstanding restricted A Shares granted under the Restricted Shares Incentive Plans and the
restricted A Shares granted pursuant to the Restricted Shares Incentive Plans have all been
released from the restriction period and have become A Shares without restrictive conditions
of sale. As of the Latest Practicable Date, the outstanding participants of the second employee
stock ownership plan consisted of 354 employees holding 56,443,800 A Shares, representing
1.03% of our total issued share capital. We believe that the granting of share-based
compensation awards is of significant importance to our ability to attract and retain key
personnel and employees. Nevertheless, the granting of share-based compensation awards
would potentially dilute the shareholding of existing shareholders, and we recognized
share-based payment expenses of RMB850.0 million, RMB344.0 million, RMB35.6 million,
and RMB71.7 million in 2022, 2023, 2024 and the nine months ended September 30, 2025,
respectively. We may continue to grant share-based compensation awards to employees in the
future. As a result, our expenses associated with share-based compensation may increase,
which may affect our financial condition and results of operations.
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We may require additional funding to finance our operations, which may not be available
on terms acceptable to us or at all. Our level of indebtedness and the terms of our
indebtedness could adversely affect our business and liquidity position.
We currently fund our operations principally with proceeds from our business operations
and bank and other borrowings. As of November 30, 2025, we had outstanding indebtedness
of RMB70,598.0 million, which primarily comprised short-term and long-term loans,
short-term and long-term debentures payable, lease liabilities, long-term payables and
non-current liabilities due within one year. This indebtedness could have consequences for our
business and operations including, but not limited to:
 requiring us to dedicate a portion of our cash flow from operations to payments of
principal and interest on our indebtedness, thereby reducing the availability of our
cash flow for other purposes;
 restricting our ability to obtain financing, refinance our indebtedness, or obtain
share capital or debt financing on commercially attractive terms; or
 reducing our flexibility to respond to changing business conditions and thereby
increasing our vulnerability to economic downturns.
If we fail to renew our existing bank borrowings or raise additional funding through
future debt or equity offerings as needed, our ability to implement our business strategy may
be impaired, which could adversely affect our growth prospects and operating results.
Furthermore, a small portion of our loan agreements may contain requirements on certain
financial ratios and continuing reporting obligations. Given that our financial performance may
be impacted by cyclical fluctuations in the hog and slaughtering and meat product industries,
there can be no assurance that we would not experience difficulties repaying the outstanding
loan amounts as they come due. Any failure to comply with the covenants of our financing
agreements or to obtain financing for our business could have a material adverse effect on our
business, financial condition, operating results and prospects.
Any future occurrence of force majeure events, natural disasters, wars or outbreaks of
contagious disease may materially and adversely affect our business, financial condition
and operating results.
Natural and man-made disasters and other force majeure events that are beyond our
control may adversely affect the economy, infrastructure and livelihood of the people in the
areas or situations affected. An occurrence or recurrence of any such event could result in
disruptions to our operations, which could adversely affect our business, financial condition,
operating results and prospects.
RISK FACTORS
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Our business operations could be disrupted if any of our employees is suspected of
contracting any contagious disease, since it could require our offices or facilities to be closed
for disinfection or other remedial measures, which would adversely delay or disrupt our
production schedule, and we may experience raw material shortages or price surges if the
operations of any of our suppliers are disrupted by contagious disease.
Moreover, natural disasters, including earthquakes, floods, landslides and droughts, could
result in deaths, significant economic losses and extensive damage to factories, power lines and
other properties, as well as blackouts, transportation and communications disruptions and other
losses in the affected areas. Any future natural disasters, public health and public security
hazards may, among other things, materially and adversely affect or disrupt our operations.
Furthermore, such natural disasters, public health and public security hazards may severely
restrict the level of economic activity in affected areas which may, in turn, materially and
adversely affect our business, operating results and prospects.
RISKS RELATING TO THE LOCAL LA WS AND REGULATIONS OF THE
JURISDICTIONS WHERE WE CONDUCT BUSINESS
We may need to devote additional efforts and resources to ensure our compliance with
relevant laws or regulations, including current or new laws and governmental regulations
relating to our industry, and to obtain or maintain required government permits, licenses
and approvals for our business or renewals thereof in a timely manner.
Our business is subject to various compliance and operational requirements under
applicable laws and regulations. Complying with laws, rules and regulations may require
investments of various related resources, and any material non-compliance may expose us to
liability or penalty. In case of any material non-compliance, we may have to incur significant
expenses and divert substantial management time to rectifying such non-compliance incidents.
We may also experience adverse publicity arising from such non-compliance with government
regulations that could negatively impact our reputation.
In addition, some of these approvals, permits, licenses and certificates are subject to
periodic renewal and reassessment by the relevant authorities. While we undertake to apply for
the renewal and reassessment of these approvals, permits, licenses and certificates when
required by applicable laws and regulations, we cannot guarantee that we will be able to
successfully maintain or renew existing permits, licenses or any other regulatory approvals or
obtain permits, licenses or other approvals needed for the operation of our business in the
future on a timely basis. If we fail to obtain the necessary renewals or otherwise fail to maintain
all approvals, licenses, permits and certificates required to carry out our business at any time,
our business could be severely disrupted, which could have a material adverse effect on our
business, financial condition and operating results. We cannot assure you that the government
authorities with jurisdiction over our business activities will not revoke or significantly alter
our licenses, permits or approvals or that our licenses, permits or approvals will not be
challenged, revoked or not renewed in the future.
RISK FACTORS
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Changes to the existing regulatory regime relating to the sectors where we operate our
business may limit our ability to provide product offerings, thereby materially and
adversely affecting our business, financial condition and results of operations.
The operations of our business are subject to various laws, rules and regulations at the
regional and national levels of the hog farming industry and slaughtering industry in China, see
“Regulatory Overview.” New laws, rules or regulations and revisions to any existing laws,
rules and regulations can impose additional compliance costs and reduce our revenue, and
require us to change our operations to ensure compliance or otherwise change our business. We
may need to devote additional efforts and resources to ensure our compliance with relevant
laws, rules and regulations due to changes in any applicable laws, rules and regulations that
might be beyond our control.
In addition, new laws, rules and regulations relevant to our businesses may be introduced
in the future, or the current applicable regulations may otherwise be amended or replaced,
requiring us to conduct business with additional oversight and regulatory compliance. There
can be no assurance that we can adapt to the evolving regulatory environment swiftly enough
or in a cost-efficient manner, failure of which may adversely affect our operations and lead to
substantial compliance costs. Meanwhile, we may need to implement changes in our facilities,
equipment, personnel or services to comply with the latest laws and regulations, and such may
increase our capital expenditures and operating expenses, thereby adversely affecting our
business, financial condition and results of operations.
A failure to comply with PRC property-related laws and regulations regarding certain of
our owned or leased land or buildings may adversely affect our business.
According to applicable PRC administrative regulations, both the lessor and the lessee of
a lease agreement are required to file the lease agreement with the relevant government
authorities within 30 days of its execution. As of the Latest Practicable Date, we had not filed
our lease agreements for certain leased buildings with the local housing administration
authorities as required under PRC laws and regulations. As advised by our PRC Legal Adviser,
if we and the landlords fail to register these lease agreements as required by the relevant
competent authorities, we may be subject to a fine ranging from RMB1,000 to RMB10,000 for
each unregistered lease agreement.
As of the Latest Practicable Date, there were defects in some of our leased buildings. As
of the same date, the ownership certificates or other similar proof for 10 of our Company’s and
Major Subsidiaries’ leased buildings had not been provided to us by the relevant lessors.
Therefore, these lessors may not be entitled to lease the relevant buildings to us. In case any
such lease is terminated and we are required to relocate, we may face the risk of not being able
to continuing using the buildings and the risk of relocation.
RISK FACTORS
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Furthermore, as of the Latest Practicable Date, our Company and Major Subsidiaries had
not obtained the building ownership certificate for 10 of our owned properties in Liaoning,
Inner Mongolia, Henan, Anhui, and Heilongjiang Provinces, China. As advised by the PRC
Legal Adviser, we may face the risk of: (i) being requested to cease the use of the relevant
buildings on those properties; and (ii) paying penalties for the violation of relevant laws and
regulations. See “Business — Properties — Defects in our Owned Buildings.”
During the Track Record Period, one of our subsidiaries received a penalty of
approximately RMB22 thousand from the local authority for the rectification of inadvertently
occupied collective construction land. Upon notice from the local authority, the said subsidiary
promptly implemented required rectification measures. Given that the assets of the center in
question only accounted for a small proportion of our total assets, we believe it is not a material
property to our Company, and given the amount of the penalty is minor and we have properly
leased it back, we believe the incident does not have any material adverse impact on our
business operations and financial results.
Given the nature of our business, we may need to obtain authorizations from the relevant
governmental authorities before we can carry out operations on certain lands, and may need to
ensure continuous compliance on land use under the evolving regulations. While we strive to
maintain full compliance and have implemented dedicated internal measures to manage
regulatory risks, unforeseen challenges in navigating evolving regulations could subject us to
investigations, claims and fines, which could affect our business.
If we are challenged by third parties or governmental authorities regarding any of the
circumstances stated above, we may be subject to fines and be forced to relocate, which could
adversely affect our operating results and financial condition.
Policies and regulations regarding foreign currency conversion may impact our foreign
exchange transactions.
The conversion of RMB into foreign currencies should be in compliance with relevant
laws and regulations. We receive substantially all of our revenue in RMB, and undertake
certain transactions denominated in foreign currencies. Under existing PRC foreign exchange
regulations, payments of current account items, including profit distributions, interest
payments and trade and service-related foreign exchange transactions can be made in foreign
currencies without prior approval of the SAFE by complying with certain procedural
requirements. However, the laws, regulations and governmental policies regarding currency
conversion are generally complex and developing. If we cannot obtain sufficient foreign
currencies to satisfy our foreign currency demands via the foreign exchange regulation system,
we may not be able to pay dividends in foreign currencies to our Shareholders. Foreign
exchange transactions under our capital account are subject to the relevant foreign exchange
regulations and policies and may need approval from the SAFE or its local branches. These
regulations could affect our ability to obtain foreign exchange through equity financing, or to
obtain foreign exchange for capital expenditures.
RISK FACTORS
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Certain judgments obtained against us by our Shareholders may be difficult to enforce.
We are a company incorporated under the laws of the PRC, and nearly all of our assets
and subsidiaries are located in the PRC. The majority of our Directors and senior management
reside within the PRC. Judgments rendered by Hong Kong courts may be recognized and
enforced in the PRC if the requirements set forth by the Arrangement on Reciprocal
Recognition and Enforcement of Judgments in Civil and Commercial Matters by the Courts of
the Mainland and of the Hong Kong Special Administrative Region (ಥतйБ
τર) are met. Nonetheless, it may be difficult
for you to effect service of process within Hong Kong upon us or these persons, or to bring an
action in Hong Kong against us or against these individuals in the event that you believe that
your rights have been infringed under the applicable securities laws or other laws.
Although we will be subject to the Listing Rules and the Codes on Takeovers and Mergers
and Share Repurchases of Hong Kong upon the Global Offering of our Shares on the Stock
Exchange, the holders of the Shares will not be able to bring actions on the basis of violations
of the Listing Rules and must rely on the Stock Exchange to enforce its rules. The Listing Rules
and the Codes on Takeovers and Mergers and Share Repurchases of Hong Kong do not have
the force of law in Hong Kong.
RISKS RELATING TO THE GLOBAL OFFERING
We will be concurrently subject to listing and regulatory requirements of mainland China
and Hong Kong.
As we are listed on the Shenzhen Stock Exchange and will be listed on the Main Board
in Hong Kong, we will be required to comply with the listing rules (where applicable) and other
regulatory regimes of both jurisdictions, unless an exemption is available or a waiver has been
obtained. Accordingly, we may incur additional costs and resources in continuously complying
with all sets of listing rules in the two jurisdictions.
The characteristics of the A share and H share markets may differ.
Our A Shares are listed and traded on the Shenzhen Stock Exchange. Following the
Global Offering, our A Shares will continue to be traded on the Shenzhen Stock Exchange and
our H Shares will be offered on the Hong Kong Stock Exchange. Under current laws and
regulations of mainland China, without approval from the relevant regulatory authorities, our
H Shares and A Shares are neither interchangeable nor fungible, and there is no trading or
settlement between the H Share and A Share markets. The H Share and A Share markets have
different trading characteristics with divergent trading volume, liquidity and investor bases, as
well as different levels of retail and institutional investor participation. As a result, the trading
performance of our H Shares and A Shares may not be comparable. Nonetheless, fluctuations
in the price of our A Shares may adversely affect the price of our H Shares, and vice versa. Due
to the different characteristics of the H Share and A Share markets, the historical prices of our
RISK FACTORS
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A Shares may not be indicative of the performance of our H Shares. Y ou should therefore not
place undue reliance on the trading history of our A Shares when evaluating your investment
decision regarding our H Shares.
There has been no prior public market for our H Shares and an active trading market for
our H Shares may not develop or be sustained.
Prior to the Global Offering, there was no public market for our H Shares. We cannot
assure you that a public market for our H Shares with adequate liquidity and trading volume
will develop and be maintained following completion of the Global Offering. In addition, the
Global Offering of our H Shares is expected to be fixed by agreement between the Global
Offering (for themselves and on behalf of the Global Offering) and us, and may not be an
indication of the market price of our H Shares following completion of the Global Offering. If
an active public market for our H Shares does not develop following completion of the Global
Offering, the market price and liquidity of our H Shares may be materially and adversely
affected.
The price and trading volume of our H Shares may be volatile, which could lead to
substantial losses for investors.
The price and trading volume of our H Shares may be subject to significant volatility in
response to various factors beyond our control, including the general market conditions for
securities in Hong Kong and elsewhere in the world. The Hong Kong Stock Exchange and other
securities markets have, from time to time, experienced significant price and trading volume
volatility that are not related to the operating performance of any particular company. The
business and performance and the market price of the shares of other companies engaging in
similar business may also affect the price and trading volume of our Shares. In addition to
market and industry factors, the price and trading volume of our Shares may be highly volatile
for specific business reasons, such as fluctuations in our revenue, earnings, cash flows,
investments, expenditures, regulatory developments, relationships with our suppliers,
movements or activities of key personnel, or actions taken by competitors. Moreover, the
shares of other companies listed on the Hong Kong Stock Exchange have experienced price
volatility in the past and the price of our H Shares may change even though this is not directly
related to our performance.
Future sales or perceived sales of substantial amounts of our H Shares in the public
market could have a material adverse effect on the prevailing market price of our H
Shares and our ability to raise additional capital in the future, or may result in the
dilution of your shareholding.
The market price of our H Shares and our ability to raise equity capital in the future at
a time and price that we deem appropriate could be negatively impacted as a result of future
sales of substantial amounts of our H Shares or other securities relating to our H Shares in the
public market, especially by our Directors, executive officers and Controlling Shareholders, or
the issuance of new shares or other securities, or the perception that such sales or issuances
RISK FACTORS
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may occur. In addition, our Shareholders may experience dilution in their holdings if we issue
more securities in the future. Furthermore, we may issue Shares pursuant to any existing or
future share option incentive schemes, which would further dilute our Shareholders’ interests
in our Company. New shares or share-linked securities issued by us may also confer rights and
privileges that take priority over those conferred by our H Shares. Certain amounts of the
Shares controlled by our Controlling Shareholders are subject to certain lock-up periods
beginning on the date on which our Shares are globally offered on the Hong Kong Stock
Exchange. While we currently are not aware of any intention of such persons to dispose of
substantial amounts of their Shares after the expiry of the lock-up periods, we cannot assure
you that they will not dispose of any Shares they may own now or in the future. Market sales
of Shares by such Shareholders and the availability of these Shares for future sale may have
a negative impact on the market price of our Shares. In addition, while investors subscribing
shares in the Global Offering are not subject to any restrictions on the disposal of the H Shares
they subscribed, they may have existing arrangements or agreements to dispose of part or all
of the H Shares they hold immediately or within a certain period following completion of the
Global Offering for legal and regulatory, business and market, or other reasons. Such disposal
may occur within a short period or at any time or period after the Global Offering. Any sale
of the H Shares subscribed by such investors pursuant to such arrangement or agreement could
adversely affect the market price of our H Shares, while any sizeable sale could have a material
adverse effect on the market price of our H Shares and could cause substantial volatility in the
trading volume of our H Shares.
The interests of our Controlling Shareholders may not be aligned with the interests of our
other Shareholders.
Immediately following completion of the Global Offering and assuming the Over-
allotment Option is not exercised and excluding A Shares issuable upon the conversion of the
outstanding Convertible Bonds, our Controlling Shareholders will hold approximately 52.29%
of the issued share capital of our Company. This concentration of ownership may discourage,
delay or prevent a change in control of our Company, which could deprive other Shareholders
of an opportunity to receive a premium for their Shares in the course of a sale of our Company
and might reduce the price of our H Shares. The aforementioned potential events may occur
even if they are opposed by our other Shareholders. In addition, the interests of our Controlling
Shareholders may differ from the interests of our other Shareholders. It is possible that our
Controlling Shareholders may exercise their substantial influence over us and cause us to enter
into transactions or take, or fail to take, actions or make decisions that conflict with the best
interests of our other Shareholders.
RISK FACTORS
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Our historical dividends may not be indicative of our future dividend policy and there can
be no assurance whether and when we will pay dividends in the future.
We protect our Shareholders’ interests by ensuring a consistent dividend policy. However,
there is no assurance that dividends of any amount will be declared or distributed by us in any
year in the future. Under the applicable laws and regulations of mainland China, the payment
of dividends may be subject to certain limitations. The declaration, payment and amount of any
future dividends are subject to the discretion of our Directors, after taking into account various
factors including, but not limited to, our operating results, financial condition, cash flows,
capital expenditure requirements, market conditions, our strategic plans and prospects for
business development, regulatory restrictions on the payment of dividends and other factors as
our Directors may deem relevant, and subject to approval at the general meeting. Any
declaration and payment as well as the amount of dividends will be subject to our constitutional
documents and the applicable laws and regulations of mainland China. See “Financial
Information — Dividends and Dividend Policy.” No dividend shall be declared or payable
except out of our profits and reserves lawfully available for distribution. Our historical
dividends should not be taken as indicative of our dividend policy in the future.
Under the existing foreign exchange regulations of mainland China, payments of current
account items, including profit distributions, interest payments and trade and service-related
foreign exchange transactions, can be made in foreign currencies without prior SAFE approval
by complying with certain procedural provisions. However, approval from or registration with
competent government authorities is required where RMB is to be converted into foreign
currency and remitted out of mainland China to pay capital expenditure, such as the repayment
of loans denominated in foreign currencies. If the foreign exchange control system prevents us
from obtaining sufficient foreign currencies to satisfy our foreign currency demands, we may
not be able to pay dividends in foreign currencies to our H Shares Shareholders.
Y ou should not place any reliance on any information released by us in connection with
the listing of our A Shares on the Shenzhen Stock Exchange.
As our A Shares are listed on the Shenzhen Stock Exchange, we have been subject to
periodic reporting and other information disclosure requirements in mainland China. As a
result, from time to time, we publicly release information relating to us on the Shenzhen Stock
Exchange or other media outlets designated by the CSRC. However, the information announced
by us in connection with our A Shares listing is based on the regulatory requirements of the
securities authorities, industry standards and market practices in mainland China, which are
different from those applicable to the Global Offering. The presentation of financial and
operational information for the Track Record Period disclosed on the Shenzhen Stock
Exchange or other media outlets may not be directly comparable to the financial and
operational information contained in this document. As a result, prospective investors in our H
Shares should be reminded that, in making their investment decisions as to whether to purchase
our H Shares, they should rely only on the financial, operating and other information included
RISK FACTORS
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in this document. By applying to purchase our H Shares in the Global Offering, you will be
deemed to have agreed that you will not rely on any information other than that contained in
this document and any formal announcements made by us in Hong Kong with respect to the
Global Offering.
Forward-looking statements contained in this document are subject to risks and
uncertainties.
This document contains forward-looking statements with respect to our business
strategies, operating efficiencies, competitive positions, growth opportunities for existing
operations, plans and objectives of management, certain Global Offering information and other
matters. The words “aim,” “estimate,” “anticipate,” “believe,” “could,” “predict,” “potential,”
“continue,” “expect,” “intend,” “may,” “might,” “plan,” “seek,” “will,” “would,” “should” and
the negatives of these terms and other similar expressions identify a number of these
forward-looking statements. These forward-looking statements, including those relating to our
future business prospects, capital expenditure, cash flows, working capital, liquidity and
capital resources are estimates reflecting the best judgment of our Directors and management
and involve a number of risks and uncertainties that could cause actual results to differ
materially from those suggested by the forward-looking statements. Consequently, these
forward-looking statements should be considered in light of various important factors,
including those set out in this section. Accordingly, such statements are not a guarantee of
future performance and investors should not place undue reliance on them.
Certain facts, forecasts and other statistics in this document are derived from various
publicly available official sources and independent third-party sources, including
industry expert reports.
This document, particularly the section entitled “Industry Overview”, contains
information and statistics relating to the industries we operate in, as well as other economic
data. Information derived from official government sources and statistics are derived from
third-party reports, either commissioned by us or that are publicly accessible, and other
publicly available sources. We believe that the sources of the information are appropriate and
we have taken reasonable care in extracting and reproducing such information. However, the
information derived from official government sources has not been independently verified by
us, any of the Joint Sponsors, the Overall Coordinators, the Joint Global Coordinators, the Joint
Bookrunners, the Joint Lead Managers, the Capital Market Intermediaries, the Underwriters, or
any of their respective affiliates or advisors, and no representation is given as to its accuracy.
Collection methods of information derived from official government sources may be
ineffective, or there may be discrepancies between published information and market practice,
which may result in the statistics being inaccurate or not comparable to statistics produced for
other economies. In all cases, our investors should consider carefully how much weight or
importance should be attached to, or placed on, such facts or statistics.
RISK FACTORS
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Y ou should read the entire document carefully and only rely on the information included
in this document to make your investment decision. We strongly caution you not to rely
on any information contained in press articles or other media coverage regarding us, our
Shares or the Global Offering.
We strongly caution our investors not to rely on any information contained in press
articles or other media regarding us, our Shares or the Global Offering. Prior to the publication
of this document, there may be press and media coverage regarding the Global Offering and
us. Such press and media coverage may include references to certain information that does not
appear in this document, including certain operating and financial information and projections,
valuations and other information. We have not authorized the disclosure of any such
information in the press or media and do not accept any responsibility for any such press or
media coverage or the accuracy or completeness of any such information or publication. We
make no representation as to the appropriateness, accuracy, completeness or reliability of any
such information or publication. To the extent that any such information is inconsistent or
conflicts with the information contained in this document, we disclaim responsibility for it and
our investors should not rely on such information.
We are a mainland China enterprise and are subject to mainland China tax on our global
income, and any gains on the sales of H Shares and dividends on the H Shares may be
subject to mainland China income taxes.
Under the PRC EIT Law and its implementation rules, subject to any applicable tax treaty
or similar arrangement between mainland China and a non-mainland China investor’s
jurisdiction of residence that provides for a different income tax arrangement, mainland China
withholding tax at the rate of 10% is normally applicable to dividends from mainland China
sources payable to investors that are non-mainland China resident enterprises that do not have
an establishment or place of business in mainland China, or that have an establishment or place
of business in mainland China but the relevant income is not effectively connected with such
establishment or place of business. Any gains realized on the transfer of Shares by such
investors are subject to a 10% mainland China income tax rate if such gains are regarded as
income from sources within mainland China unless a treaty or similar arrangement provides
otherwise.
Under the PRC Individual Income Tax Law () and its
implementation rules, dividends from sources within mainland China paid to foreign individual
investors who are not mainland China residents are generally subject to a 20% mainland China
withholding tax rate, while gains from mainland China sources realized by such investors on
the transfer of shares are generally subject to a 20% mainland China income tax rate, in each
case, subject to any reduction or exemption under applicable tax treaties and laws in mainland
China. Pursuant to the Notice on the Issues Concerning Individual Income Tax Collection and
Management after the Repeal of Guo Shui Fa [1993] No. 045 (਷೼೯[1993]045 ໮˖΁
) (Guo Shui Han [2011] No. 348) ( ਷೼Ռ[2011]348
໮) dated June 28, 2011, issued by the SA T, dividends paid to non-mainland China resident
individual holders of H Shares are generally subject to the individual income tax of mainland
RISK FACTORS
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China at a withholding tax rate of 10%. This depends on whether there are tax arrangements
between the jurisdictions where the individual holders reside, as well as the tax arrangements
between mainland China and Hong Kong. Non-mainland China resident individual holders who
reside in jurisdictions that have not entered into tax treaties with mainland China are subject
to a 20% withholding tax on dividends received from us.
If mainland China income tax is imposed on gains realized from the transfer of our H
Shares or on dividends paid to our non-mainland China resident investors, the value of your
investment in our H Shares may be affected. Furthermore, our Shareholders whose jurisdictions
of residence have tax treaties or arrangements with mainland China may not qualify for
benefits under such tax treaties or arrangements.
RISK FACTORS
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In preparation for the Listing, we have sought the following waivers from strict
compliance with the relevant provisions of the Listing Rules:
Rules Subject matter
Rules 3.28 and 8.17 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Appointment of joint company secretaries
Rules 8.12 and 19A.15 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Management presence in Hong Kong
Paragraphs 26 of Appendix D1A to the
Listing Rules and paragraph 29 of the
Third Schedule to the Companies
(Winding Up and Miscellaneous
Provisions) Ordinance /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Particulars of information of our
subsidiaries
Rule 14A.105 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Continuing connected transactions
Rule 10.04 and paragraph 1C(2) of
Appendix F1 to the Listing Rules /H1118/H1118/H1118/H1118/H1118
Allocation of H Shares to existing minority
Shareholders and/or their close associates
Rule 4.04(1) and paragraph 27 of Part I
and paragraph 31 of Part II of the
Third Schedule to the Companies
(Winding Up and Miscellaneous
Provisions) Ordinance /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Waiver in relation to with rule 4.04(1) of
the Listing Rules and exemption from strict
compliance with paragraph 27 of Part I and
paragraph 31 of Part II of the Third
Schedule to the Companies (Winding Up
and Miscellaneous Provisions) Ordinance
Paragraph 15(2)(c) of Appendix D1A to
the Listing Rules /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Disclosure of Offer Price
APPOINTMENT OF JOINT COMPANY SECRETARIES
Pursuant to Rule 8.17 of the Listing Rules, we must appoint a company secretary who
satisfies the requirements under Rule 3.28 of the Listing Rules. According to Rule 3.28 of the
Listing Rules, we must appoint as our company secretary an individual, who, by virtue of his
or her academic or professional qualifications or relevant experience, is, in the opinion of the
Stock Exchange, capable of discharging the functions of company secretary.
Pursuant to Note 1 to Rule 3.28 of the Listing Rules, the Stock Exchange considers the
following academic or professional qualifications to be acceptable:
(a) a member of The Hong Kong Chartered Governance Institute;
(b) a solicitor or barrister as defined in the Legal Practitioners Ordinance (Chapter 159
of the Laws of Hong Kong); or
(c) a certified public accountant as defined in the Professional Accountants Ordinance
(Chapter 50 of the Laws of Hong Kong).
W AIVERS AND EXEMPTIONS
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In addition, pursuant to Note 2 to Rule 3.28 of the Listing Rules, in assessing “relevant
experience”, the Stock Exchange will consider the individual’s:
(a) length of employment with the issuer and other issuers and the roles he or she
played;
(b) familiarity with the Listing Rules and other relevant laws and regulations including
the SFO, the Companies Ordinance, the Companies (Winding Up and Miscellaneous
Provisions) Ordinance and the Takeovers Code;
(c) relevant training taken and/or to be taken in addition to the minimum requirement
under Rule 3.29 of the Listing Rules; and
(d) professional qualifications in other jurisdictions.
We have appointed Mr. QIN Jun, our Secretary to the Board as one of our joint company
secretaries (the “ Joint Company Secretaries ”, each a “ Joint Company Secretary ”). As he
has extensive experience in information disclosure and corporate governance but presently
does not possess any of the qualifications required under Rules 3.28 and 8.17 of the Listing
Rules, we have appointed Ms. LEUNG Wing Han Sharon (“ Ms. Leung ”) of Tricor Services
Limited to provide assistance to Mr. Qin Jun. Ms. Leung is a Chartered Secretary, Chartered
Governance Professional, and a fellow member of both the Hong Kong Chartered Governance
Institute and The Chartered Governance Institute in the United Kingdom, and therefore meets
the qualification requirements under Note 1 to Rule 3.28 of the Listing Rules and is in
compliance with Rule 8.17 of the Listing Rules.
Mr. Qin Jun and Ms. Leung will be jointly discharging the duties and responsibilities of
a company secretary. Ms. Leung will be assisting Mr. Qin Jun in gaining the relevant
experience required under Rules 3.28 and 8.17 of the Listing Rules. Also, Mr. Qin Jun will be
assisted by (1) the compliance adviser of our Company for a period commencing on the Listing
Date and ending on the date on which we comply with Rule 13.46 of the Listing Rules,
particularly in relation to Hong Kong corporate governance practice and compliance matters;
and (2) the Hong Kong legal adviser of our Company, on matters regarding our Company’s
ongoing compliance with the Listing Rules and the applicable Hong Kong laws and
regulations. In addition, Mr. Qin Jun will endeavor to attend relevant trainings and familiarize
himself with the Listing Rules and duties required of a company secretary of an issuer listed
on the Stock Exchange. We have applied to the Stock Exchange for, and the Stock Exchange
has granted, a waiver from strict compliance with the requirements under Rules 3.28 and 8.17
of the Listing Rules such that Mr. Qin Jun may be appointed as a Joint Company Secretary of
our Company.
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Pursuant to Chapter 3.10 of the Guide, the waiver will be for a fixed period of time (the
“Waiver Period ”) and on the following conditions: (1) the proposed company secretary must
be assisted by a person who possesses the qualifications or experience as required under Rule
3.28 and is appointed as a Joint Company Secretary throughout the Waiver Period; and (2) the
waiver will be revoked with immediate effect if there are material breaches of the Listing Rules
by the issuer. The waiver is valid for an initial period of three years on the condition that (a)
Mr. Qin Jun must be assisted by Ms. Leung, who possesses the qualification and experience as
required under Rule 3.28 of the Listing Rules and is appointed as a joint company secretary
throughout the validity period of the waiver; and (b) the waiver is valid for a period of three
years from the Listing Date and will be revoked immediately if and when Ms. Leung ceases
to provide such assistance or if there are material breaches of the Listing Rules by our
Company.
Our Company will further ensure that Mr. Qin Jun has access to the relevant training and
support that would enhance his understanding of the Listing Rules and the duties of a company
secretary of an issuer listed on the Stock Exchange, and to receive updates on the latest changes
to the applicable Hong Kong laws and regulations and the Listing Rules. Before the end of the
Waiver Period, the Company will demonstrate and seek the Stock Exchange’s confirmation that
Mr. Qin Jun, having had the benefits of Ms. Leung’s assistance during the Waiver Period, has
attained the relevant experience under Note 2 to Rule 3.28 of the Listing Rules and is capable
of discharging the functions of a company secretary so that a further waiver would not be
necessary.
For further information regarding the qualifications of Mr. Qin Jun and Ms. Leung, see
“Directors and Senior Management” in this prospectus.
MANAGEMENT PRESENCE IN HONG KONG
Pursuant to Rule 8.12 of the Listing Rules, we must have sufficient management presence
in Hong Kong. This normally means that at least two of the executive Directors must be
ordinarily resident in Hong Kong. Pursuant to Rule 19A.15 of the Listing Rules, the
requirement in Rule 8.12 may be waived having regard to, among other considerations, the
arrangements for maintaining regular communication with the Stock Exchange.
Since most of the business operations of our Group are managed and conducted outside
of Hong Kong, and most of the executive Directors ordinarily reside outside Hong Kong, our
Company considers that it would be practically difficult and commercially unreasonable and
undesirable for our Company to arrange for two executive Directors to be ordinarily resident
in Hong Kong, either by means of relocation of existing executive Directors or appointment of
additional executive Directors. Therefore, our Company does not, and does not contemplate
that in the foreseeable future that we will, have sufficient management presence in Hong Kong
for the purpose of satisfying the requirements under Rule 8.12 of the Listing Rules.
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Accordingly, pursuant to Rule 19A.15 of the Listing Rules, we have applied to the Stock
Exchange for, and the Stock Exchange has granted, a waiver from strict compliance with Rule
8.12 and Rule 19A.15 of the Listing Rules subject to the following conditions. We will ensure
that there is an effective channel of communication between us and the Stock Exchange by way
of the following arrangements:
(a) Authorized representatives : we have appointed Mr. Cao Zhinian (“ Mr. Cao ”) and
Ms. Leung as the authorized representatives (the “ Authorized Representatives ”)
for the purpose of Rule 3.05 of the Listing Rules. The Authorized Representatives
will act as our principal channel of communication with the Stock Exchange and
would be readily contactable by phone, facsimile and email to deal promptly with
enquiries from the Stock Exchange. Accordingly, the Authorized Representatives
will be able to meet with the relevant members of the Stock Exchange to discuss any
matters in relation to our Company within a reasonable period of time. We will also
inform the Stock Exchange promptly in respect of any change in the Authorized
Representatives. For more information about our Authorized Representatives, see
“Directors and Parties Involved in the Global Offering” in this prospectus;
(b) Directors : each of our Authorized Representatives has means to contact all members
of our Board (including our Independent Non-executive Directors) promptly at all
times as and when the Stock Exchange wishes to contact the members of our Board
for any matters. In the event that any Director expects to travel or otherwise be out
of office, he/she will provide a contactable phone number of him/her to the
Authorized Representatives. Pursuant to Rule 3.20 of the Listing Rules, each of our
Directors shall provide their telephone number, mobile phone number, facsimile
number (if available), email address (if available), residential address and
correspondence address to the Stock Exchange. To the best of our knowledge and
information, each Director who does not ordinarily reside in Hong Kong possesses
or can apply for valid travel documents to visit Hong Kong and can meet with the
Stock Exchange within a reasonable period upon request of the Stock Exchange;
(c) Compliance adviser : we have appointed Somerley Capital Limited as our
compliance adviser (the “ Compliance Adviser ”) upon Listing pursuant to Rules
3A.19 and 19A.05 of the Listing Rules for a period commencing on the Listing Date
and ending on the date on which we comply with Rule 13.46 of the Listing Rules
in respect of our financial results for the first full financial year commencing after
the Listing Date. The Compliance Adviser will have access at all times to our
Authorized Representatives, the Directors and other senior management and can act
as the additional channel of communication with the Stock Exchange and answer
enquiries from the Stock Exchange. The contact details of the Compliance Adviser
have been provided to the Stock Exchange. We will also inform the Stock Exchange
promptly in respect of any change in the Compliance Adviser; and
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(d) Hong Kong legal adviser : we will retain a Hong Kong legal adviser to advise us on
the on-going compliance requirements, any amendment or supplement to and other
issues arising under the Listing Rules and other applicable laws and regulations in
Hong Kong after the Listing.
PARTICULARS OF INFORMATION OF OUR SUBSIDIARIES
Paragraph 26 of Appendix D1A to the Listing Rules requires this prospectus to include the
particulars of any alterations in the capital of any member of our Group within the two years
immediately preceding the issue of this prospectus.
Paragraph 29 of the Third Schedule to the Companies (Winding Up and Miscellaneous
Provisions) Ordinance require this prospectus to include, information in relation to the name,
date and place of incorporation, the public or private status and the general nature of the
business, the issued capital and the proportion thereof held or intended to be held, of every
company (a) the whole of the capital of which or a substantial proportion thereof is held or
intended to be held by our Company, or (b) whose profits or assets make, or will make a
material contribution to the figures in the Accountants’ Report or to our Company’s next
financial statements.
Our Company had 320 subsidiaries as of the Latest Practicable Date. Our Company
believes that it would be unduly burdensome to disclose the required information in respect of
all of its subsidiaries as our Company would have to incur additional costs and devote
additional resources in compiling and verifying the relevant information for such disclosure,
which would not be material or meaningful to investors. The non-disclosure of such
information will not prejudice the interests of investors.
Our Company has identified 49 subsidiaries primarily responsible for the Track Record
Period results of the Group as its major subsidiaries during the Track Record Period. By way
of illustration, as of December 31, 2022, 2023 and 2024 and September 30, 2025, the total
assets of these 49 subsidiaries in aggregate (before intra-group eliminations) represent 96.6%,
84.2%, 91.7% and 107.7% of our total assets; for each of the financial years ended December
31, 2022, 2023 and 2024 and the nine months ended September 30, 2025, the aggregate revenue
of these 49 subsidiaries (before intra-group eliminations) represents 91.4%, 93.4%, 84.3% and
97.0% of our total revenue; and the aggregate net profit or loss of these 49 subsidiaries (before
intra-group eliminations) represent 63.6% and 58.2% of the Group’s net profit for each of the
financial years ended December 31, 2022 and 2024, 71.7% of the Group’s net loss for the
financial year ended December 31, 2023, and 53.2% of the Group’s net profit for the nine
months ended September 30, 2025 of our Group. None of the other subsidiaries of our
Company individually contributed to 5% or more of our total revenue, net profit or loss during
each period in the Track Record Period, or total assets as of December 31, 2022, 2023 or 2024
or September 30, 2025, or hold any material assets, intellectual property rights, proprietary
technologies, licenses or permits of the Group, or has a significant impact on the Company’s
business operations and future development strategies based on the Company’s comprehensive
assessment of the Company’s business composition and principal business. All of the other
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subsidiaries are relatively insignificant to the overall results of our Group. During the Track
Record Period, we deregistered three of them (Nanyang Muyuan Poor Area Animal Livestock
Husbandry Industry Development Co., Ltd. (ʮ̡)
Nanyang Muyuan Swine Supply Guarantee Support Co., Ltd. (ʮ
̡) and Shandong Muhua Animal Husbandry Industry Development Co., Ltd. (ശळ
ʮ̡)) due to intra-Group restructuring to reduce subsidiary levels within
our Group and optimize our Group’s resource allocation to improve overall operation
efficiency. Therefore, as of the Latest Practicable Date, we mainly operated our business
through 46 Major Subsidiaries. See “History, Development and Corporate Structure — Our
Major Subsidiaries” for information of our Major Subsidiaries as of the Latest Practicable
Date.
We have disclosed the particulars of the changes in share capital of our Company and the
major subsidiaries in the sections headed “Appendix VI. Statutory and General Information —
1. Further Information about Our Company — B. Changes in Share Capital of Our Company”
and “— C. Changes in Share Capital of our Major Subsidiaries.” We have also disclosed the
corporate information (including name, principal business activities, place and date of
incorporation and the interest held by the Group) of the Major Subsidiaries as required under
paragraph 29 of the Third Schedule to the Companies (Winding Up and Miscellaneous
Provisions) Ordinance in “History, Development and Corporate Structure” and the share capital
of the Major Subsidiaries in Note VI.1 to the Accountants’ Report as set out in Appendix I to
this prospectus.
We have applied to the Stock Exchange for, and the Stock Exchange has granted, a waiver
from strict compliance with the requirements under paragraph 26 of Appendix D1A to the
Listing Rules. in respect of disclosing the particulars of any alteration in the capital of any
member of our Group within the two years immediately preceding the issue of this prospectus.
We have applied for, and the SFC has granted us, a certificate of exemption from strict
compliance with the requirements under paragraph 29 of the Third Schedule to the Companies
(Winding Up and Miscellaneous Provisions) Ordinance in respect of disclosing the information
of our subsidiaries which are not Major Subsidiaries as required under paragraph 29 of the
Third Schedule to the Companies (Winding Up and Miscellaneous Provisions) Ordinance.
The exemption is granted by the SFC on the conditions that: (i) the particulars of the
exemption are disclosed in this prospectus; and (ii) this prospectus is issued on or before
January 29, 2026.
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CONTINUING CONNECTED TRANSACTIONS
We have entered into, and expect to continue certain transactions that will constitute
partially-exempt continuing connected transactions of our Company under the Listing Rules
upon Listing as described in the section headed “Connected Transactions” in this prospectus.
Our Directors consider that strict compliance with the applicable requirement under the Listing
Rules would be impractical, unduly burdensome and would impose unnecessary administrative
costs on our Company. Accordingly, we have applied to the Stock Exchange for, and the Stock
Exchange has granted, a waiver from strict compliance with the applicable requirements under
Chapter 14A of the Listing Rules upon Listing in respect of such partially-exempt continuing
connected transactions. For further details, see “Connected Transactions” in this prospectus.
ALLOCATION OF H SHARES TO EXISTING MINORITY SHAREHOLDERS AND/OR
THEIR CLOSE ASSOCIATES
Rule 10.04 of the Listing Rules requires that a person who is an existing shareholder of
a listing applicant may only subscribe for or purchase any securities for which listing is sought
that are being marketed by or on behalf of a listing applicant either in his/her/its own name or
through nominees if the conditions in Rule 10.03 of the Listing Rules are fulfilled, namely that
(i) no securities are to be offered to the existing shareholders on a preferential basis and no
preferential treatment is given to them in the allocation of the securities; and (ii) the minimum
prescribed percentage of public shareholders required by Rule 8.08(1) of the Listing Rules is
achieved. Paragraph 1C(2) of Appendix F1 to the Listing Rules states that, without the prior
written consent of the Stock Exchange, no allocations will be permitted to be made to directors
or existing shareholders of a listing applicant or their close associates, unless the conditions set
out in Rules 10.03 and 10.04 are fulfilled.
Paragraph 1C(2) of Appendix F1 to the Listing Rules provides that no allocations will be
permitted to the existing shareholders of the applicant or their close associates, whether in their
own names or through nominees, in the Global Offering unless the conditions set out in Rules
10.03 and 10.04 of the Listing Rules are fulfilled.
Chapter 4.15 of the Guide provides that the Stock Exchange will consider granting a
waiver from Rule 10.04 of the Listing Rules and a consent, pursuant to paragraph 1C(2) of
Appendix F1 to the Listing Rules, to allow a listing applicant’s existing shareholders or their
close associates to participate in its initial public offering if any actual or perceived preferential
treatment arising from their ability to influence the listing applicant during the allocation
process can be addressed.
Prior to the Listing, our Company’s share capital comprises entirely of A Shares listed on
the Shenzhen Stock Exchange. We have a large and widely dispersed public A Share
shareholder base.
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We have applied to the Stock Exchange for, and the Stock Exchange has granted, a waiver
from strict compliance with the requirements under Rule 10.04 and consent under Paragraph
1C(2) of Appendix F1 to the Listing Rules to permit H Shares in the International Offering to
be placed to certain existing minority Shareholders who (i) hold less than 5% of the total voting
rights in our Company prior to the completion of the Global Offering and (ii) are not and will
not become (upon the completion of the Global Offering) core connected persons of our
Company or the close associates of any such core connected person (together, the “ Existing
Minority Shareholders ”) and/or their close associates, subject to the conditions as follows:
(i) each Existing Minority Shareholder to whom our Company may allocate the H
Shares in the International Offering holds less than 5% of the total voting rights in
our Company before Listing;
(ii) each Existing Minority Shareholder is not, and will not be, a core connected person
of our Company or any close associate of any such core connected person
immediately prior to or following the Global Offering;
(iii) none of the Existing Minority Shareholders has the right to appoint a Director and/or
have any other special rights;
(iv) allocation to the Existing Minority Shareholders or their close associates will not
affect our ability to satisfy the public float requirement as prescribed by the Stock
Exchange under Rule 19A.13A(2) of the Listing Rules or otherwise approved by the
Stock Exchange;
(v) the Joint Sponsors confirm the matters set out in (i) to (iv) above and confirm to the
Stock Exchange in writing that, to the best of their knowledge and belief, they have
no reason to believe that any of the Existing Minority Shareholders or their close
associates received any preferential treatment, or is in a position to exert influence
on the Company to obtain actual or perceived preferential treatment in the allocation
either as a cornerstone investor or as a placee by virtue of their relationship with our
Company other than the preferential treatment of assured entitlement under a
cornerstone investment following the principles set out in Chapter 4.15 of the Guide
for New Listing Applicants, and details of the allocation to the Existing Minority
Shareholders holding 1% or more of the issued share capital of the Company
immediately prior to the completion of the Global Offering will be disclosed in this
prospectus and/or the allotment results announcement, as the case may be;
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(vi) our Company will confirm to the Stock Exchange in writing that:
a. in the case of participation as cornerstone investors, no preferential treatment
has been, nor will be, given to the Existing Minority Shareholders or their
close associates by virtue of their relationship with our Company, other than
the preferential treatment of assured entitlement under a cornerstone
investment following the principles set out in Chapter 4.15 of the Guide for
New Listing Applicants, nor is the Existing Minority Shareholder in a position
to exert influence on the Company to obtain actual or perceived preferential
treatment, and the Existing Minority Shareholders or their close associates’
cornerstone investment agreements do not contain any material terms which
are more favorable to the Existing Minority Shareholders or their close
associates than those in other cornerstone investment agreements; or
b. in the case of participation as placees, no preferential treatment has been, nor
will be, given to the Existing Minority Shareholders or their close associates,
nor is the Existing Minority Shareholder in a position to exert influence on the
Company to obtain actual or perceived preferential treatment, by virtue of their
relationship with our Company in any allocation in the placing tranche;
(vii) in the case of participation as placees, the Overall Coordinators will confirm to the
Stock Exchange that, to the best of their knowledge and belief, no preferential
treatment has been, nor will be, given to the Existing Minority Shareholders or their
close associates by virtue of their relationship with our Company in any allocation
in the placing tranche.
W AIVER IN RELATION TO WITH RULE 4.04(1) OF THE LISTING RULES AND
EXEMPTION FROM STRICT COMPLIANCE WITH PARAGRAPH 27 OF PART I AND
PARAGRAPH 31 OF PART II OF THE THIRD SCHEDULE TO THE COMPANIES
(WINDING UP AND MISCELLANEOUS PROVISIONS) ORDINANCE
Rule 4.04(1) of the Listing Rules requires our Company to include in the Prospectus an
Accountants’ Report covering the consolidated results of our Group in respect of each of the
three financial years immediately preceding the issue of the prospectus or such shorter period
as may be acceptable to the Stock Exchange.
Section 342(1)(b) of the Companies (Winding Up and Miscellaneous Provisions)
Ordinance requires all prospectuses to include an accountant’s report which contains matters
specified in the Third Schedule to the Companies (Winding Up and Miscellaneous Provisions)
Ordinance.
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Paragraph 27 of Part I of the Third Schedule to the Companies (Winding Up and
Miscellaneous Provisions) Ordinance requires us to include in the prospectus a statement as to
the gross trading income or sales turnover (as may be appropriate) of our Group during each
of the three financial years immediately preceding the issue of the prospectus as well as an
explanation of the method used for the computation of such income or turnover and a
reasonable breakdown of the more important trading activities.
Paragraph 31 of Part II of the Third Schedule to the Companies (Winding Up and
Miscellaneous Provisions) Ordinance require us to include in the prospectus a report by
auditors of our Company with respect to the financial results of our Group for each of the three
financial years immediately preceding the issue of the prospectus.
Pursuant to section 342A(1) of the Companies (Winding Up and Miscellaneous
Provisions) Ordinance, the SFC may issue, subject to such conditions (if any) as the SFC thinks
fit, a certificate of exemption from compliance with the relevant requirements under the
Companies (Winding Up and Miscellaneous Provisions) Ordinance if, having regard to the
circumstances, the SFC considers that the exemption will not prejudice the interests of the
investing public and compliance with any or all of such requirements would be irrelevant or
unduly burdensome, or is otherwise unnecessary or inappropriate.
Appendix II to Chapter 1.1A of the Guide For New Listing Applicants issued by the Stock
Exchange has provided the conditions for granting a waiver from strict compliance with Rule
4.04(1) of the Listing Rules as follows:
(a) the applicant must list on the Stock Exchange within three months after the latest
year end;
(b) the applicant must obtain a certificate of exemption from the SFC on compliance
with the relevant Companies (Winding Up and Miscellaneous Provisions) Ordinance
requirements;
(c) a profit estimate for the latest financial year (which must comply with Rules 11.17
to 11.19 of the Listing Rules) must be included in the prospectus or the applicant
must provide justification why a profit estimate cannot be included in the
prospectus; and
(d) there must be a directors’ statement in the prospectus that there is no material
adverse change to its financial and trading position or prospects with specific
reference to the trading results from the end of the stub period to the latest financial
year end.
The Accountants’ Report for each of the financial years ended December 31, 2022, 2023
and 2024 and the nine months ended September 30, 2025 has been prepared and set out in
Appendix I to this Prospectus.
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Pursuant to the relevant requirements set forth above, our Company is required to include
full years of audited accounts for the years ended December 31, 2023, 2024 and 2025 in this
prospectus. However, an application was made to the Stock Exchange for a waiver from strict
compliance with Rule 4.04(1) of the Listing Rules, and such waiver has been granted by the
Stock Exchange on the conditions that:
(a) this prospectus will be issued on or before January 29, 2026 and the H Shares will
be listed on the Stock Exchange on or before February 6, 2026 (i.e., within three
months after the latest financial year end of our Company);
(b) our Company will obtain a certificate of exemption from the SFC on exemption from
strict compliance with the relevant Companies (Winding Up and Miscellaneous
Provisions) Ordinance requirements;
(c) this prospectus contains a profit estimate for the year ended December 31, 2025 (in
compliance with Rules 11.17 to 11.19 of the Listing Rules) and the statement from
our Directors that there is no material adverse change to our financial and trading
positions or prospects, with specific reference to our trading results from October 1,
2025 to December 31, 2025; and
(d) our Company will publish the preliminary results announcement for the financial
year ended December 31, 2025 by no later than March 31, 2026 and the annual
report for the financial year ended December 31, 2025 by no later than April 30,
2026, respectively, in compliance with Rules 13.49 and 13.46 of the Listing Rules.
An application has also been made to the SFC for a certificate of exemption from strict
compliance with the requirements under paragraph 27 of Part I and paragraph 31 of Part II of
the Third Schedule to the Companies (Winding Up and Miscellaneous Provisions) Ordinance
and a certificate of exemption has been granted by the SFC under section 342A of the
Companies (Winding Up and Miscellaneous Provisions) Ordinance on the conditions that:
(a) the particulars of the exemption are disclosed in this prospectus; and
(b) this prospectus will be issued on or before January 29, 2026 and H Shares will be
listed on the Stock Exchange on or before March 31, 2026 (i.e. three months after
the latest financial year end of our Company).
The applications to the Stock Exchange for a waiver from strict compliance with
Rule 4.04(1) of the Listing Rules and the SFC for a certificate of exemption from strict
compliance with the requirements under paragraph 27 of Part I and paragraph 31 of Part II of
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the Third Schedule to the Companies (Winding Up and Miscellaneous Provisions) Ordinance
were made on the grounds, among others, that strict compliance with the above requirements
would be unduly burdensome and the exemption would not prejudice the interest of the
investing public as:
(a) there will not be sufficient time for our Company and the reporting accountants of
our Company to finalize the audited consolidated financial statements for the year
ended December 31, 2025 for inclusion in this prospectus. If the consolidated
financial information for the year ended December 31, 2025 is required to be
audited, our Company and our reporting accountants would have to undertake a
considerable amount of work to prepare, update and finalize the Accountants’
Report to be included in this prospectus and the relevant sections of this prospectus
will need to be updated to cover such additional period within a short period of time,
and may lead to the delay of the current listing timetable;
(b) our Directors and the Joint Sponsors confirm that, after performing all reasonable
due diligence work which they consider appropriate, up to the date of this
prospectus, except to the extent disclosed in “Summary — Recent Development and
No Material Adverse Change” in this prospectus, there has been no material adverse
change to the financial and trading positions or prospects of the Company since
October 1, 2025 (immediately following the date of the latest audited statement of
financial position in the Accountants’ Report as set out in Appendix I to this
prospectus) to the date of this prospectus and there has been no event since October
1, 2025 which would materially affect the information shown in the Accountants¡¦
Report as set out in Appendix I to this prospectus and the profit estimate for the
financial year ended December 31, 2025 as set out in Appendix IIA to this
prospectus and other parts of this prospectus;
(c) our Company is of the view that the Accountants’ Report covering the three financial
years ended December 31, 2024 and the nine months ended September 30, 2025,
together with the profit estimate for the year ended December 31, 2025 (in
compliance with Rules 11.17 to 11.19 of the Listing Rules) included in this
prospectus have already provided the potential investors with adequate and
reasonably up-to-date information of the circumstances to form a view on the track
record and earnings trend of our Company; our Directors and the Joint Sponsors
confirm that all information which is necessary for the investing public to make an
informed assessment of our activities, assets and liabilities, financial position,
trading position, management and prospects has been included in this prospectus.
Therefore, the waiver and exemption would not prejudice the interest of the
investing public; and
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(d) we will comply with the requirements under Rules 13.46(2) and 13.49(1) of the
Listing Rules in respect of the publication of our annual results and annual report.
Our Company currently expects to issue our annual results and annual report for the
financial year ended December 31, 2025 on or before March 31, 2026 and April 30,
2026, respectively. In this regard, our Directors consider that the Shareholders, the
investing public as well as potential investors of our Company will be kept informed
of the financial results of our Group for the financial year ended December 31, 2025.
DISCLOSURE OF OFFER PRICE
Paragraph 15(2)(c) of Appendix D1A to the Listing Rules provides that the issue price or
offer price of each security must be disclosed in the prospectus. Pursuant to paragraph 12 of
Chapter 4.14 of the Guide, our Company, the Joint Sponsors, and the Overall Coordinators
should conduct a reasonably robust price discovery process before determining a realistic
indicative offer price or price-range for inclusion in this prospectus. Therefore, in practice, the
Stock Exchange also allows an indicative offer price range to be included in this prospectus,
as an alternative to the disclosure of a fixed offer price.
We have applied to the Stock Exchange a waiver from strict compliance with paragraph
15(2)(c) of Appendix D1A to the Listing Rules so that our Company will only disclose the
maximum Offer Price in the prospectus on the below basis:
(a) the Offer Price will be determined with reference to, among other factors, the
closing price of our A Shares on the Shenzhen Stock Exchange on the last trading
day on or before the Price Determination Date. Our Company is unable to control
the trading price of our A Shares on the Shenzhen Stock Exchange;
(b) setting a fixed offer price or an offer price range with a low-end may adversely
affect our ability to price our H Shares in the best interests of our Shareholders and
the market price of the A Shares and the Offer Shares;
(c) pursuant to paragraphs 9 and 10(b) of the Third Schedule to the Companies
(Winding Up and Miscellaneous Provisions) Ordinance, the amount payable on
application and allotment on each share, and the price to be paid for shares
subscribed for, shall be specified in the prospectus, respectively. Disclosure of a
maximum Offer Price complies with the requirements prescribed under paragraphs
9 and 10(b) of Part A the Third Schedule to the Companies (Winding Up and
Miscellaneous Provisions) Ordinance by providing a clear indication of the
maximum subscription consideration a potential investor shall pay for the Offer
Shares; and
(d) a maximum Offer Price will be disclosed in this document. This alternative
disclosure approach would not prejudice the interests of the investing public in
Hong Kong.
W AIVERS AND EXEMPTIONS
–9 0–


--- page 102 ---
The Stock Exchange has granted to us a waiver from strict compliance with paragraph
15(2)(c) of Appendix D1A to the Listing Rules on the conditions that this prospectus will
disclose:
(a) the maximum Offer Price;
(b) the time for the determination of the Offer Price and the form of its publication;
(c) the historical closing prices of the Company’s A Shares and trading volume on the
Shenzhen Stock Exchange during the Track Record Period and up to the Latest
Practicable Date;
(d) the determinants of the final Offer Price; and
(e) the source for investors to access the latest market price of the Company’s A Shares.
See “Structure of the Global Offering – Pricing and Allocation” in this prospectus for the
historical closing prices of our A Shares and trading volume on the Shenzhen Stock Exchange.
W AIVERS AND EXEMPTIONS
–9 1–


--- page 103 ---
DIRECTORS’ RESPONSIBILITY FOR THE CONTENTS OF THIS PROSPECTUS
This prospectus, for which our Directors collectively and individually accept full
responsibility, includes particulars given in compliance with the Companies (Winding Up and
Miscellaneous Provisions) Ordinance, the Securities and Futures (Stock Market Listing) Rules
(Cap 571V of the Laws of Hong Kong) and the Listing Rules for the purpose of giving
information to the public with regard to our Group. Our Directors, having made all reasonable
enquiries, confirm that, to the best of their knowledge and belief, the information contained in
this prospectus is accurate and complete in all material respects and not misleading or
deceptive, and there are no other matters the omission of which would make any statement in
this prospectus misleading.
THE HONG KONG PUBLIC OFFERING AND THIS PROSPECTUS
This prospectus is published solely in connection with the Hong Kong Public Offering,
which forms part of the Global Offering. The Global Offering comprises the Hong Kong Public
Offering of initially 27,395,200 Offer Shares and the International Offering of initially
246,556,200 Offer Shares (subject to, in each case, reallocation on the basis referred to in
“Structure of the Global Offering” in this prospectus and, in case of the International Offering,
to any exercise of the Over-allotment Option).
The listing of our H Shares on the Stock Exchange is sponsored by the Joint Sponsors and
the Global Offering is managed by the Overall Coordinators. The Hong Kong Public Offering
is fully underwritten by the Hong Kong Underwriters pursuant to the Hong Kong Underwriting
Agreement, subject to us and the Overall Coordinators (for themselves and on behalf of the
Hong Kong Underwriters) agreeing on the Offer Price. The International Offering is expected
to be fully underwritten by the International Underwriters pursuant to the terms of the
International Underwriting Agreement which is expected to be entered into on or around
February 4, 2026. For further information regarding the Underwriters and the Underwriting
Agreements, see “Underwriting” in this prospectus.
The Offer Shares are offered solely on the basis of the information contained and
representations made in this prospectus and on the terms and subject to the conditions set out
herein and therein. No person is authorized to give any information in connection with the
Global Offering or to make any representation not contained in this prospectus, and any
information or representation not contained herein must not be relied upon as having been
authorized by our Company, the Joint Sponsors, the Overall Coordinators, the Joint Global
Coordinators, the Joint Bookrunners, the Joint Lead Managers, the Capital Market
Intermediaries, the Underwriters, any of their respective directors, officers, employees,
advisers, agents or representatives, or any other persons or parties involved in the Global
Offering.
INFORMATION ABOUT THIS PROSPECTUS AND THE GLOBAL OFFERING
–9 2–


--- page 104 ---
Neither the delivery of this prospectus nor any subscription or acquisition made under it
shall, under any circumstances, create any implication that there has been no change or
development in our affairs since the date of this prospectus or that the information in this
prospectus is correct as of any date subsequent to the date of this prospectus.
STRUCTURE OF THE GLOBAL OFFERING
For details of the structure of the Global Offering (including its conditions) and the
arrangements relating to the Over-allotment Option and stabilization, see “Structure of the
Global Offering” and “Underwriting” in this prospectus.
RESTRICTIONS ON OFFER AND SALE OF THE OFFER SHARES
Each person acquiring the Hong Kong Offer Shares under the Hong Kong Public Offering
will be required to, or be deemed by his/her acquisition of Hong Kong Offer Shares to, confirm
that he/she is aware of the restrictions on the offer and sale of the Hong Kong Offer Shares
described in this prospectus.
No action has been taken to permit a public offering of the Offer Shares or the distribution
of this prospectus in any jurisdiction other than Hong Kong. Accordingly, without limitation
to the following, this prospectus may not be used for the purpose of, and does not constitute,
an offer or invitation in any jurisdiction or in any circumstances in which such an offer or
invitation is not authorized or to any person to whom it is unlawful to make such an offer or
invitation for subscription. The distribution of this prospectus and the offering and sale of the
Offer Shares in other jurisdictions are subject to restrictions and may not be made except as
permitted under the applicable securities laws of such jurisdictions pursuant to registration
with or authorization by the relevant securities regulatory authorities or an exemption
therefrom. In particular, the Offer Shares have not been offered and sold, and will not be
offered and sold, directly or indirectly, in the PRC or the United States.
APPLICATION FOR LISTING OF THE H SHARES ON THE HONG KONG STOCK
EXCHANGE
We have applied to the Hong Kong Stock Exchange for the granting of listing of, and
permission to deal in, our H Shares to be issued pursuant to the Global Offering (including any
H Shares which may be issued pursuant to the exercise of the Over-allotment Option).
Dealings in the H Shares on the Hong Kong Stock Exchange are expected to commence
on Friday, February 6, 2026. Save as otherwise disclosed in this prospectus, no part of our
Shares or loan capital is listed on or dealt in on any other stock exchange, and no such listing
or permission to list is being or proposed to be sought as of the Latest Practicable Date.
INFORMATION ABOUT THIS PROSPECTUS AND THE GLOBAL OFFERING
–9 3–


--- page 105 ---
Under section 44B(1) of the Companies (Winding Up and Miscellaneous Provisions)
Ordinance, any allotment made in respect of any application will be invalid if the listing of,
and permission to deal in, the H Shares on the Hong Kong Stock Exchange is refused before
the expiration of three weeks from the date of the closing of the application lists, or such longer
period (not exceeding six weeks) as may, within the said three weeks, be notified to our
Company by or on behalf of the Hong Kong Stock Exchange.
CSRC FILING
According to the Overseas Listing Trial Measures, we are required to complete the filing
procedures with the CSRC in connection with the proposed Listing. We have submitted a filing
to the CSRC for application for the Listing and the CSRC filing was completed on November
25, 2025.
H SHARES WILL BE ELIGIBLE FOR ADMISSION INTO CCASS
Subject to the granting of the listing of, and permission to deal in, the H Shares on the
Hong Kong Stock Exchange and compliance with the stock admission requirements of
HKSCC, the H Shares will be accepted as eligible securities by HKSCC for deposit, clearance
and settlement in CCASS with effect from the date of commencement of dealings in the H
Shares on the Hong Kong Stock Exchange or on any other date as determined by HKSCC.
Settlement of transactions between participants of the Hong Kong Stock Exchange is required
to take place in CCASS on the second settlement day after any trading day. All activities under
CCASS are subject to the General Rules of HKSCC and HKSCC Operational Procedures in
effect from time to time.
All necessary arrangements have been made enabling the H Shares to be admitted into
CCASS. Investors should seek the advice of their stockbrokers or other professional advisers
for details of the settlement arrangements as such arrangements may affect their rights and
interests.
PROCEDURES FOR APPLICATION FOR HONG KONG OFFER SHARES
The procedures for applying for Hong Kong Offer Shares are set out in “How to Apply
for Hong Kong Offer Shares” in this prospectus.
H SHARE REGISTER OF MEMBERS AND STAMP DUTY
All of the Offer Shares will be registered on our H Share register of members to be
maintained by our H Share Registrar, Tricor Investor Services Limited, in Hong Kong. Our
principal register of members will be maintained by us at our headquarters in the PRC.
Dealings in the H Shares registered on the H Share register of members of our Company
in Hong Kong will be subject to Hong Kong stamp duty.
INFORMATION ABOUT THIS PROSPECTUS AND THE GLOBAL OFFERING
–9 4–


--- page 106 ---
Unless determined otherwise by our Company, dividends payable in respect of our H
Shares will be paid to the Shareholders listed on the H Share register of members of our
Company in Hong Kong, by ordinary post, at the H Shareholders’ risk, to the registered address
of each H Shareholder of our Company.
PROFESSIONAL TAX ADVICE RECOMMENDED
Potential investors in the Global Offering are recommended to consult their professional
advisers as to the taxation implications of subscribing for, purchasing, holding or disposal of,
and/or dealing in the H Shares or exercising rights attached to them. None of us, the Joint
Sponsors, the Overall Coordinators, the Joint Global Coordinators, the Joint Bookrunners, the
Joint Lead Managers, the Capital Market Intermediaries, the Underwriters, any of their
respective directors, officers, employees, partners, agents, advisers or representatives or any
other person or party involved in the Global Offering accepts responsibility for any tax effects
on, or liabilities of, any person resulting from the subscription, purchasing, holding,
disposition of, or dealing in, the H Shares or exercising any rights attached to them.
EXCHANGE RATE CONVERSION
Solely for your convenience, this prospectus contains translations among certain amounts
denominated in Renminbi, Hong Kong dollars and U.S. dollars.
Unless indicated otherwise, (i) the translations between Renminbi and U.S. dollars were
made at the rate of RMB7.0014 to US$1.00, (ii) the translations between Hong Kong dollars
and Renminbi were made at the rate of RMB0.89779 to HK$1.00, and (iii) the translations
between U.S. dollars and Hong Kong dollars were made at the rate of HK$7.79848294 to
US$1.00, being the PBOC rates prevailing on January 21, 2026.
No representation is made that the amounts denominated in one currency could actually
be converted into the amounts denominated in another currency at the rates indicated or at all.
LANGUAGE
If there is any inconsistency between this prospectus and its Chinese translation, this
prospectus shall prevail. For ease of reference, the names of the Chinese laws and regulations,
government authorities, institutions, natural persons or other entities (including certain of our
subsidiaries) have been included in this prospectus in both the Chinese and English languages.
In the event of any inconsistency, the Chinese name shall prevail.
ROUNDING
Certain amounts and percentage figures included in this prospectus have been subject to
rounding adjustments. Any discrepancies between totals and sums of amounts listed in any
table, chart or elsewhere in this prospectus are due to rounding.
INFORMATION ABOUT THIS PROSPECTUS AND THE GLOBAL OFFERING
–9 5–


--- page 107 ---
DIRECTORS
Executive Directors
Name Address Nationality
Mr. QIN Yinglin (؍ߵRoom 2201, Unit 1, Sky Villa
No. 4969, Xinchen West Road
Wolong District, Nanyang
Henan Province
PRC
Chinese
Mr. CAO Zhinian (ϋ) Room 2202, Unit 1, Sky Villa
No. 4969, Xinchen West Road
Wolong District, Nanyang
Henan Province
PRC
Chinese
Ms. Y ANG Ruihua ( เ๿ശ) Room 2202, Unit 1, Sky Villa
No. 4969, Xinchen West Road
Wolong District, Nanyang
Henan Province
PRC
Chinese
Non-executive Directors
Name Address Nationality
Ms. QIAN Ying ( ፺຃) Room 2201, Unit 1, Sky Villa
No. 4969, Xinchen West Road
Wolong District, Nanyang
Henan Province
PRC
Chinese
Mr. SU Danglin (؍Room 1301, Unit 2, Sky Villa
No. 4969, Xinchen West Road
Wolong District, Nanyang
Henan Province
PRC
Chinese
DIRECTORS AND PARTIES INVOLVED IN THE GLOBAL OFFERING
–9 6–


--- page 108 ---
Independent non-executive Directors
Name Address Nationality
Mr. CHOW Ming Sang
(୍)
20/F, Tsui Yiu Court
Lai Chi Ling Road, Kwai Chung
Kowloon, Hong Kong
Chinese
(Hong Kong)
Mr. Y AN Lei ( ᎅᆾ) Building 5
Phase 1, Azure Coast
No. 1-1, Huaming Road
Nanshan District, Shenzhen
Guangdong Province
PRC
Chinese
Mr. FENG Genfu (၅) Unit 1, South Building 18
No. 105, Cuihua Road
Y anta District, Xi’an
Shaanxi Province
PRC
Chinese
For further details, see “Directors and Senior Management” in this prospectus.
DIRECTORS AND PARTIES INVOLVED IN THE GLOBAL OFFERING
–9 7–


--- page 109 ---
PARTIES INVOLVED IN THE GLOBAL OFFERING
Joint Sponsors Morgan Stanley Asia Limited
46/F, International Commerce Centre
1 Austin Road West
Kowloon
Hong Kong
CITIC Securities (Hong Kong) Limited
18/F, One Pacific Place
88 Queensway
Hong Kong
Goldman Sachs (Asia) L.L.C.
68/F, Cheung Kong Center
2 Queen’s Road Central
Hong Kong
Overall Coordinators Morgan Stanley Asia Limited
46/F, International Commerce Centre
1 Austin Road West
Kowloon
Hong Kong
CLSA Limited
18/F, One Pacific Place
88 Queensway
Hong Kong
Goldman Sachs (Asia) L.L.C.
68/F, Cheung Kong Center
2 Queen’s Road Central
Hong Kong
Joint Global Coordinators Morgan Stanley Asia Limited
46/F, International Commerce Centre
1 Austin Road West
Kowloon
Hong Kong
CLSA Limited
18/F, One Pacific Place
88 Queensway
Hong Kong
DIRECTORS AND PARTIES INVOLVED IN THE GLOBAL OFFERING
–9 8–


--- page 110 ---
Goldman Sachs (Asia) L.L.C.
68/F, Cheung Kong Center
2 Queen’s Road Central
Hong Kong
China International Capital Corporation
Hong Kong Securities Limited
29/F One International Finance Centre
1 Harbour View Street
Central
Hong Kong
Merrill Lynch (Asia Pacific) Limited
55/F, Cheung Kong Center
2 Queen’s Road Central
Central
Hong Kong
CMB International Capital Limited
45/F, Champion Tower
3 Garden Road
Central
Hong Kong
China Merchants Securities (HK) Co.,
Limited
48/F One Exchange Square
8 Connaught Place
Central
Hong Kong
ABCI Capital Limited
11/F Agricultural Bank of China Tower
50 Connaught Road Central
Hong Kong
BOCI Asia Limited
26th Floor, Bank of China Tower
1 Garden Road
Central
Hong Kong
DIRECTORS AND PARTIES INVOLVED IN THE GLOBAL OFFERING
–9 9–


--- page 111 ---
BOCOM International Securities Limited
9/F, Man Y ee Building
68 Des V oeux Road Central
Hong Kong
CCB International Capital Limited
12/F, CCB Tower
3 Connaught Road Central
Central
Hong Kong
Joint Bookrunners Morgan Stanley Asia Limited
46/F, International Commerce Centre
1 Austin Road West
Kowloon
Hong Kong
CLSA Limited
18/F, One Pacific Place
88 Queensway
Hong Kong
Goldman Sachs (Asia) L.L.C.
68/F, Cheung Kong Center
2 Queen’s Road Central
Hong Kong
China International Capital Corporation
Hong Kong Securities Limited
29/F One International Finance Centre
1 Harbour View Street
Central
Hong Kong
Merrill Lynch (Asia Pacific) Limited
55/F, Cheung Kong Center
2 Queen’s Road Central
Central
Hong Kong
DIRECTORS AND PARTIES INVOLVED IN THE GLOBAL OFFERING
– 100 –


--- page 112 ---
CMB International Capital Limited
45/F, Champion Tower
3 Garden Road
Central
Hong Kong
China Merchants Securities (HK) Co.,
Limited
48/F One Exchange Square
8 Connaught Place
Central
Hong Kong
ABCI Capital Limited
11/F Agricultural Bank of China Tower
50 Connaught Road Central
Hong Kong
BOCI Asia Limited
26th Floor, Bank of China Tower
1 Garden Road
Central
Hong Kong
BOCOM International Securities Limited
9/F, Man Y ee Building
68 Des V oeux Road Central
Hong Kong
CCB International Capital Limited
12/F, CCB Tower
3 Connaught Road Central
Central
Hong Kong
Changjiang Securities Brokerage (HK)
Limited
Unit 3605-3611, 36/F, Cosco Tower
183 Queen’s Road
Central
Hong Kong
DIRECTORS AND PARTIES INVOLVED IN THE GLOBAL OFFERING
– 101 –


--- page 113 ---
China Galaxy International Securities
(Hong Kong) Co., Limited
20th Floor, Wing On Centre
111 Connaught Road Central
Sheung Wan
Hong Kong
China Everbright Securities (HK) Limited
33/F, Everbright Centre
108 Gloucester Road
Wan Chai
Hong Kong
Futu Securities International (Hong
Kong) Limited
34/F, United Centre
No.95 Queensway
Admiralty
Hong Kong
Joint Lead Managers Morgan Stanley Asia Limited
46/F, International Commerce Centre
1 Austin Road West
Kowloon
Hong Kong
CLSA Limited
18/F, One Pacific Place
88 Queensway
Hong Kong
Goldman Sachs (Asia) L.L.C.
68/F, Cheung Kong Center
2 Queen’s Road Central
Hong Kong
China International Capital Corporation
Hong Kong Securities Limited
29/F One International Finance Centre
1 Harbour View Street
Central
Hong Kong
DIRECTORS AND PARTIES INVOLVED IN THE GLOBAL OFFERING
– 102 –


--- page 114 ---
Merrill Lynch (Asia Pacific) Limited
55/F, Cheung Kong Center
2 Queen’s Road Central
Central
Hong Kong
CMB International Capital Limited
45/F, Champion Tower
3 Garden Road
Central
Hong Kong
China Merchants Securities (HK) Co.,
Limited
48/F One Exchange Square
8 Connaught Place
Central
Hong Kong
ABCI Securities Company Limited
10/F Agricultural Bank of China Tower
50 Connaught Road Central
Hong Kong
BOCI Asia Limited
26th Floor, Bank of China Tower
1 Garden Road
Central
Hong Kong
BOCOM International Securities Limited
9/F, Man Y ee Building
68 Des V oeux Road Central
Hong Kong
CCB International Capital Limited
12/F, CCB Tower
3 Connaught Road Central
Central
Hong Kong
DIRECTORS AND PARTIES INVOLVED IN THE GLOBAL OFFERING
– 103 –


--- page 115 ---
Changjiang Securities Brokerage (HK)
Limited
Unit 3605-3611, 36/F, Cosco Tower
183 Queen’s Road
Central
Hong Kong
China Galaxy International Securities
(Hong Kong) Co., Limited
20th Floor, Wing On Centre
111 Connaught Road Central
Sheung Wan
Hong Kong
China Everbright Securities (HK) Limited
33/F, Everbright Centre
108 Gloucester Road
Wan Chai
Hong Kong
Futu Securities International (Hong
Kong) Limited
34/F, United Centre
No.95 Queensway
Admiralty
Hong Kong
Capital Market Intermediaries Morgan Stanley Asia Limited
46/F, International Commerce Centre
1 Austin Road West
Kowloon
Hong Kong
CLSA Limited
18/F, One Pacific Place
88 Queensway
Hong Kong
Goldman Sachs (Asia) L.L.C.
68/F, Cheung Kong Center
2 Queen’s Road Central
Hong Kong
DIRECTORS AND PARTIES INVOLVED IN THE GLOBAL OFFERING
– 104 –


--- page 116 ---
China International Capital Corporation
Hong Kong Securities Limited
29/F One International Finance Centre
1 Harbour View Street
Central
Hong Kong
Merrill Lynch (Asia Pacific) Limited
55/F, Cheung Kong Center
2 Queen’s Road Central
Central
Hong Kong
CMB International Capital Limited
45/F, Champion Tower
3 Garden Road
Central
Hong Kong
China Merchants Securities (HK) Co.,
Limited
48/F One Exchange Square
8 Connaught Place
Central
Hong Kong
ABCI Capital Limited
11/F Agricultural Bank of China Tower
50 Connaught Road Central
Hong Kong
ABCI Securities Company Limited
10/F, Agricultural Bank of China Tower
50 Connaught Road Central
Central
Hong Kong
BOCI Asia Limited
26th Floor, Bank of China Tower
1 Garden Road
Central
Hong Kong
BOCOM International Securities Limited
9/F, Man Y ee Building
68 Des V oeux Road Central
Hong Kong
DIRECTORS AND PARTIES INVOLVED IN THE GLOBAL OFFERING
– 105 –


--- page 117 ---
CCB International Capital Limited
12/F, CCB Tower
3 Connaught Road Central
Central
Hong Kong
Changjiang Securities Brokerage (HK)
Limited
Unit 3605-3611, 36/F, Cosco Tower
183 Queen’s Road
Central
Hong Kong
China Galaxy International Securities
(Hong Kong) Co., Limited
20th Floor, Wing On Centre
111 Connaught Road Central
Sheung Wan
Hong Kong
China Everbright Securities (HK) Limited
33/F, Everbright Centre
108 Gloucester Road
Wan Chai
Hong Kong
Futu Securities International (Hong
Kong) Limited
34/F, United Centre
No.95 Queensway
Admiralty
Hong Kong
DIRECTORS AND PARTIES INVOLVED IN THE GLOBAL OFFERING
– 106 –


--- page 118 ---
Legal Advisers to our Company As to Hong Kong and U.S. laws:
Clifford Chance
27/F, Jardine House
One Connaught Place
Central
Hong Kong
As to PRC laws:
Fangda Partners
24/F, HKRI Centre Two
HKRI Taikoo Hui
288 Shi Men Yi Road
Shanghai
PRC
Legal Advisers to the Joint Sponsors and
the Underwriters
As to Hong Kong and U.S. laws:
Kirkland & Ellis
26/F, Gloucester Tower
The Landmark
15 Queen’s Road Central
Hong Kong
As to PRC laws:
King & Wood Mallesons
18/F, East Tower
World Financial Center
1 Dongsanhuan Zhonglu
Chaoyang District
Beijing, PRC
Auditor and Reporting Accountants KPMG Huazhen LLP
Public Interest Entity Auditor recognized in
accordance with the Accounting and
Financial Reporting Council Ordinance
8th Floor, KPMG Tower
Oriental Plaza
1 East Chang An Avenue
Beijing, PRC
DIRECTORS AND PARTIES INVOLVED IN THE GLOBAL OFFERING
– 107 –


--- page 119 ---
Industry Consultant Frost & Sullivan (Beijing)
Inc., Shanghai Branch Co.
Room 2504, Wheelock Square
1717 West Nanjing Road
Jing’an District
Shanghai, PRC
Independent Biological Assets Valuer Jones Lang LaSalle Corporate Appraisal
and Advisory Limited
7/F, One Taikoo Place
979 King’s Road
Hong Kong
Compliance Adviser Somerley Capital Limited
20/F China Building
29 Queen’s Road Central
Central
Hong Kong
Receiving Banks Agricultural Bank of China Limited Hong
Kong Branch
(Incorporated in the People’ s Republic of
China with limited liability)
25/F., Agricultural Bank of China Tower
50 Connaught Road Central
Hong Kong
Bank of China (Hong Kong) Limited
1 Garden Road
Hong Kong
DIRECTORS AND PARTIES INVOLVED IN THE GLOBAL OFFERING
– 108 –


--- page 120 ---
Registered Office in the PRC Shuitian Village, Guanzhang Town
Neixiang County, Nanyang
Henan Province
PRC
Principal Place of Business in the PRC Longsheng Industrial Park
Wolong District, Nanyang
Henan Province
PRC
Principal Place of Business in Hong Kong Room 1920, 19/F
Lee Garden One
33 Hysan Avenue
Causeway Bay
Hong Kong
Company’s Website www.muyuanfoods.com
(The information contained in this website
does not form part of this prospectus)
Joint Company Secretaries Mr. QIN Jun
Longsheng Industrial Park
Wolong District, Nanyang
Henan Province
PRC
Ms. LEUNG Wing Han Sharon
(FCG, HKFCG)
Room 1920, 19/F
Lee Garden One
33 Hysan Avenue
Causeway Bay
Hong Kong
Authorized Representatives Mr. CAO Zhinian
Longsheng Industrial Park
Wolong District, Nanyang
Henan Province
PRC
CORPORATE INFORMATION
– 109 –


--- page 121 ---
Ms. LEUNG Wing Han Sharon
(FCG, HKFCG)
Room 1920, 19/F
Lee Garden One
33 Hysan Avenue
Causeway Bay
Hong Kong
Audit Committee Mr. CHOW Ming Sang (Chairman)
Ms. QIAN Ying
Mr. Y AN Lei
Nomination Committee Mr. FENG Genfu (Chairman)
Ms. QIAN Ying
Mr. Y AN Lei
Remuneration and Appraisal Committee Mr. Y AN Lei (Chairman)
Mr. CAO Zhinian
Mr. FENG Genfu
Strategy Committee Mr. QIN Yinglin (Chairman)
Ms. Y ANG Ruihua
Mr. CHOW Ming Sang
Sustainable Development Committee Mr. QIN Yinglin (Chairman)
Mr. FENG Genfu
Mr. CHOW Ming Sang
H Share Registrar Tricor Investor Services Limited
17/F, Far East Finance Centre
16 Harcourt Road
Hong Kong
Principal Banks Agricultural Bank of China Co., Ltd.,
Neixiang Sub-branch
No. 192, West Section of County
Government Road
Chengguan Town,
Neixiang County, Nanyang
Henan Province
PRC
CORPORATE INFORMATION
–1 1 0–


--- page 122 ---
Bank of China Co., Ltd. Neixiang
Sub-branch
Northeast corner of the intersection of Beida
Street and County Government Road
Neixiang County, Nanyang
Henan Province
PRC
Bank of Communications Co., Ltd.
Nanyang Branch
Zhongtai International Building
Intersection of Dushan Avenue and
Zhangheng Road
Nanyang
Henan Province
PRC
China CITIC Bank Co., Ltd.,
Nanyang Branch
No. 109, Zhongzhou Middle Road
Wolong District, Nanyang
Henan Province
PRC
China Merchants Bank Co., Ltd.,
Nanyang Branch
Intersection of Dushan Avenue and
Xinchen Road (under Xincheng
International Building)
Wolong District, Nanyang
Henan Province
PRC
CORPORATE INFORMATION
– 111 –


--- page 123 ---
The information and statistics set out in this section and other sections of this
prospectus were extracted from the Frost & Sullivan Report prepared by Frost &
Sullivan, which was commissioned by us, and from various official government
publications. We engaged Frost & Sullivan to prepare the Frost & Sullivan Report, an
independent industry report, in connection with the Global Offering. The information
from official government sources has not been independently verified by us, the Joint
Sponsors, the Overall Coordinators, the Joint Global Coordinators, the Joint
Bookrunners, the Joint Lead Managers, the Capital Market Intermediaries, the
Underwriters, any of their respective directors and advisers or any other persons or
parties involved in the Global Offering, and no representation is given as to its accuracy.
OVERVIEW OF GLOBAL PORK CONSUMPTION
Global meat consumption has been on an upward trend for decades, driven by population
growth, rising incomes in developing countries, and changing dietary preferences. Pork is the
most widely-consumed meat globally. Global pork consumption grew at a CAGR of 4.9% from
2020 to 2024, reaching 115.3 million tons in 2024 and accounting for 32.9% of global meat
consumption. Pork is one of the main sources of animal protein, providing significant
nutritional benefits, serving as a rich source of essential vitamins, and minerals like zinc and
iron, supporting muscle growth and overall health. Its versatility in preparation makes it a
popular ingredient in various cuisines worldwide.
Meat Consumption and Proportion of
Pork Consumption, Global, 2020-2029E
Breakdown of Meat Consumption,
Global, 2024
2020 2021 2022 2023 2024 2025E 2026E 2027E 2028E 2029E
328.5 336.8 340.2 345.6 350.3 354.4 354.5 356.2 356.1 356.6
95.2 107.2 113.3 115.6 115.3 116.7 117.0 117.7 117.9 118.2
233.3 229.6 226.9 230.0 235.0 237.7 237.6 238.5 238.2 238.4
29.0%
31.8% 33.3% 33.4% 32.9% 32.9% 33.0% 33.0% 33.1% 33.1%
Other Types of MeatShare of Pork
Million tons
Pork
0
50
100
150
200
250
300
350
67.1%
32.9%
67.1%
32.9% Other Types of Meat
Pork
Source: Frost & Sullivan
China’s pork consumption has gradually stabilized after experiencing periodic
fluctuations. In 2024, China’s pork consumption reached 58.2 million tons, and it is expected
that from 2025 to 2029, China’s pork consumption will fluctuate around approximately 59
million tons, entering a relatively stable consumption phase overall. From 2020 to 2024, the
volume of China’s pork exports showed a trend of first increasing and then stabilizing. In 2024,
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China’s total pork export volume was 27.7 thousand tons. Overall, China is the world’s largest
producer and consumer of pork. Due to the huge domestic demand for pork, most of the
production is sold domestically, resulting in relatively small pork export volume and low
export dependency.
Pork Consumption, China, 2020-2029E
0
10
20
30
40
50
60
2020
41.5
51.7
57.4 59.7 58.2 59.1 58.9 59.4 59.3 59.4
2021 2022 2023 2024 2025E 2026E 2027E 2028E 2029E
Million tons
Source: Frost & Sullivan
Export Volume of Pork, China, 2020-2024
10.8
2020 2021 2022 2023 2024
18.1
27.4 26.8 27.7
Thousand tons
0
5
10
15
20
25
30
Source: GACC, Frost & Sullivan
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Global Pork Consumption by Countries
Top Five Countries by Pork Consumption, Global, 2024
Total Pork
Consumption
Per Capita Pork
Consumption
Per Capita Meat
Consumption
Pork's Share
of Meat
Consumption
Indicator Unit China USA Russia Vietnam Brazil
Million Tons
Kg
Kg
%
58.2
41.3
69.4
59.5%
10.0
29.4
102.0
28.8%
3.9
26.9
83.0
32.4%
3.7
36.9
60.6
61.0%
3.0
14.2
130.3
10.9%
Source: Frost & Sullivan
In 2024, China’s per capita meat consumption (69.4 kg) remained lower than that of
developed countries such as the United States (102.0 kg). China is the largest pork
consumption country worldwide, followed by USA, Russia, Vietnam and Brazil. Notably, pork
accounts for 59.5% of China’s per capita meat consumption in 2024, far exceeding the global
average of 32.9%, reflecting the deep-rooted dietary preferences and cultural traditions of
Chinese consumers, for whom pork has long been the main source of animal protein. As such,
pork consumption in China is projected to remain high and stable.
Among the top five pork consumption countries, per capita meat consumption in China
and Vietnam, is lower than that of Brazil, US and Russia. While Vietnam, the Philippines and
Thailand rank among the world’s largest pork consumption countries due to their large
populations and dietary preferences, their per capita meat consumption remains relatively low
compared to developed nations, highlighting significant growth potential as these economies
develop. For instance, in 2024, Thailand’s per capita pork consumption stands at 13.1 kg with
total meat consumption at 27.4 kg, while the Philippines records 13.9 kg of pork and 33.8 kg
of total meat per capita, both of which are below those of developed countries. This gap
suggests ample room for expansion, particularly as rising incomes, urbanization, and evolving
consumer preferences drive higher demand for protein-rich diets. With economic growth and
improved living standards, per capita pork and overall meat consumption in these developing
markets are expected to steadily increase, creating substantial opportunities for producers,
exporters, and investors targeting these emerging regions.
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CHINA’S HOG FARMING INDUSTRY
Hogs that are primarily sold in China include (i) breeding hogs, including reproductive
boars and sows; (ii) piglets, i.e., young pigs after weaning; and (iii) finished hogs mainly for
pork production. Hog farming is the process of breeding and raising piglets into finished hogs.
Value Chain of China’s Hog Farming Industry
The value chain of the hog farming industry in China mainly includes raw material
suppliers, hog farming companies and pork suppliers. Depending on their business models, hog
farming companies may play one or more roles along the value chain.
Value Chain of China’s Hog Farming Industry
Upstream Midstream Downstream
Raw Material Suppliers
Feed suppliers
Animal health
care suppliers
Equipment
suppliers
Hog breeding suppliers
Large-scale hog farms
Other hog farming companies
Hog Producers
wholesalers
Slaughtering and processing
companies
Pork Distribution Chain
End consumers
Source: Frost & Sullivan
Mainstream Hog Farming Models in China
The mainstream hog farming models in China can be further divided into the company
farming model and the contract farming model. Under the company farming model, companies
establish and operate their own farming bases, and employ staff to manage the entire hog
farming process, including breeding, finishing, and disease prevention. This model enables
companies to maintain higher levels of control, operational efficiency, and cost-effectiveness.
In particular, it facilitates the development of a standardized and advanced biosecurity system,
ensuring stable supply and quality of hogs. By contrast, the contract farming model involves
companies signing agreements with individual farmers, providing piglets, feed, vaccines, and
technical guidelines. While the model requires relatively low capital investment and is easier
to scale up, it depends heavily on the cooperative capabilities between farmers and the
managing company. This leads to weaker control over animal disease prevention and farming
practices, often resulting in inconsistency in quality.
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From a market structure perspective, China’s hog farming industry is characterized by the
coexistence of company-operated farming and contract farming (including individual farming).
Driven by the trend toward large-scale operations, the share of hog sales volume by company
farming model grew from 58.7% in 2019 to 62.5% in 2024. As the leading companies have
increasingly adopted the “company farming + contract farming” model to expand contract
farming, which plays an important role in ensuring supply stability and optimizing marginal
expansion costs. Contract farming is expected to contribute 277.9 million heads in 2025,
accounting for 39.2% of total sales volume of hog. In the future, company farming model is
expected to remain the dominant model, while contract farming acts as a vital complement,
together forming a stable and efficient supply structure for the industry.
Comparison of Mainstream Hog Farming Models in China
Company Farming Model
Definition
Advantages
Disadvantages
Contract Farming Model
• Company builds farming bases
and employs staff to carry out
large-scale farming, covering
breeding, finishing and other
related activities.
• Company contracts with farmers
and provides piglets, feed and
vaccines, among others, while
farmers raises hogs as required by
hog farming companies. The
finished hogs are uniformly
retrieved and sold by the company.
• Company farming model increases
control, efficiency, and lowers costs.
• Typically possesses a well-
established technical system for
animal disease prevention and
control.
• Relatively low capital
requirements.
• Easy to scale up.
• Relatively high capital
requirements.
• Requiring scientific and accurate
cooperative model between
farmers and hog farming
companies.
• Relatively low animal diseases
prevention and control capabilit
y.
Source: Frost & Sullivan
Hog Production Capacity and Sales Volume in China
China’s hog farming industry experienced a slight decline in the production capacity, with
the number of reproductive sows decreased from 41.6 million heads in 2020 to 40.8 million
heads in 2024. Hog sales volume is a key indicator for China’s hog farming industry. After
recovery from the animal disease outbreak, hog sales volume rebounded from 527.0 million
heads in 2020 to 702.6 million heads in 2024, representing a CAGR of 7.5 %. In the future,
government control over the reproductive sow scale, the increasing market share of large-scale
hog farms and continued technological upgrades are expected to keep production capacity
broadly stable. China’s hog sales volume is projected to reach approximately 707.3 million
heads in 2029.
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Sales volume of piglets is closely related to market expectations of future hog prices.
When the market anticipates a rise in hog prices, the sales volume of piglets tend to increase
accordingly. In 2020, driven by surging demand due to the impact of an animal disease
outbreak, piglet sales volume peaked at 216.1 million heads. Starting from 2021, after
recovering from the outbreak, piglet demand gradually returned to normal levels and has since
shown short-term fluctuations in line with market expectations for future hog prices. Piglet
sales volume is expected to reach 187.4 million heads by 2029, with a CAGR of -1.9% from
2025 to 2029. The projected decline is expected to occur despite production capacity remaining
broadly stable. This is primarily due to ongoing standardization and consolidation within the
hog farming industry. As the sector undergoes structural transformation, reliance on external
piglet procurement — particularly from small-scale and individual farmers — is anticipated to
decrease. Consequently, this shift will exert downward pressure on overall piglet demand.
Sales Volume of Hogs, China, 2020-2029E
527.0
2020 2021 2022 2023 2024 2025E 2026E 2027E 2028E 2029E
671.3 700.0 726.6 702.6 709.0 707.6 709.1 708.0 707.3
CAGR (2020-2024): +7.5% CAGR (2025E-2029E): -0.1%Million heads
0
100
200
300
400
500
600
700
800
Source: MARA, Frost & Sullivan
Sales Volume of Piglets, China, 2020-2029E
2020 2021 2022 2023 2024 2025E 2026E 2027E 2028E 2029E
Million heads
0
100
200
300
167.8
216.1
182.0
130.8
172.1
202.1 187.5 195.0 184.1 187.4
CAGR (2020-2024): -5.5% CAGR (2025E-2029E): -1.9%
Source: MARA, Frost & Sullivan
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Continuous Industry Consolidation in China’s Hog Farming Industry
The China hog farming industry is experiencing rapid structural change towards
industrialization and standardization.
As one of the most notable trends in China’s hog farming industry, over the past decade
China’s hog farming industry has shifted toward large-scale farming, which refers to farming
enterprises with sales volume per year of more than 500 hogs: in 2015, the penetration rate of
large-scale hog farming was merely 43.3%, it reached 70.1% in 2024, and it is expected to
reach 79.4% in 2029. Industrialization has brought standardization and stability to the hog
farming industry, effectively reducing price volatility. As the industry becomes more
consolidated with large-scale, professionally managed operations replacing small-scale hog
farms, production processes become more standardized with production volume being more
predictable. Although China’s large-scale hog farms penetration rate has been increasing, there
remains a significant gap compared to developed countries, indicating substantial room for
future development. For example, the penetration rate of large-scale hog farms in the United
States reached 90% in 2024.
Moreover, as the penetration of large-scale hog farms increases, leading companies are
steadily capturing a larger market share. For instance, the top twenty hog producers contributed
30.6% of total hog sales volume in the PRC in 2024, comparing to that of 14.5% in 2020. This
trend is expected to continue due to their technological superiority and adaptability to industry
changes. With economies of scale, they are able to spread fixed costs over a greater sales
volume, negotiate favorable deals with suppliers and buyers, and ultimately enhance their
profitability, ensuring long-term competitiveness in the hog farming industry.
Penetration Rate of Large-scale Hog Farming*, China, 2015-2029E
%
0
10
20
30
40
50
60
70
80
90
100
2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025E 2026E 2027E 2028E 2029E
46.9% 49.3% 53.4% 57.1%
61.8% 65.1% 68.0% 70.1% 71.7% 74.0% 76.5% 78.2% 79.4%
43.3% 44.9%
Source: Frost & Sullivan
Note* Penetration rate of large-scale hog farms refers to the market share (by hog sales volume) of hog farming
companies with sales volume per year of more than 500 hogs.
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Market Selling Prices of Hogs in China
Over the past ten years, China’s market selling prices of hogs have historically been
cyclical due to supply-demand dynamics, policy interventions, and feed cost volatility. The
decline in market selling prices of hogs from 2016 to 2018 was primarily due to the expansion
of hog farming companies across the sector. The outbreak of animal diseases in 2018
significantly disrupted the production activities of the hog industry, which caused a sharp
decline in production and a subsequent shortage of pork supply, leading to a significant
increase in market selling prices surging to RMB33.9 per kg (approximately RMB4,200 per
head) in 2020. However, with the rapid recovery of China’s hog production capacity in 2022,
China’s hog prices declined accordingly. In 2023, increased hog supply contributed to further
average price declines to RMB15.1 per kg (approximately RMB2,100 per head). The hog prices
decline in 2025 is within a normal range and is primarily driven by short-term fluctuations in
supply and demand. Specifically, the rise in market prices for hogs in 2024 led to an increase
in the stock of breeding sows. The number of breeding sows showed a steady upward trend,
increasing from 3,986 thousand as of April 30, 2024 to 4,066 thousand as of February 28, 2025.
Given that the inventory of breeding sows determines the supply of finished hogs
approximately ten months later, the continued expansion of breeding sow inventory in 2024
directly translated into a larger supply of finished hogs entering the market in 2025. This
resulted in an oversupply of finished hogs, which in turn caused hog prices to decline during
this period.
Average Market Selling Prices of Hogs, China, 2015–2025
18.6
15.2
33.9 32.9
15.1
16.7
15.1 14.6 14.0
11.6
0
5
10
15
20
25
30
35
RMB per kg
15.3
2015 2016 2017
12.8
2018
21.3
2019 2020 2021
18.5
2022 2023 2024 2025Q1 2025Q2 2025Q3 2025Q4
• Before 2022, hog prices exhibited stron g cyclicality, primarily due to limited
penetration of large-scale farming, absence of effective production control policies,
and inadequate capacity for flexible supply adjustment and disease management.
Source: MARA, Frost & Sullivan
Note: The average weight of hog sold in China varies from year to year, generally ranging between 120 kg and 130
kg per head.
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Hog Cycle in China
The hog cycle refers to the cyclical fluctuations in industry hog selling prices driven by
changes in supply and demand. Because of Chinese dietary habits, China’s pork demand has
been relatively stable, so fluctuations in hog supply are currently the primary factor of market
selling price changes of finished hogs. Hog supply is influenced by factors such as disease
outbreaks and production capacity. Prior to 2022, a full cycle in China lasted about four to five
years. In a typical cycle, high market selling prices encourage producers to expand breeding
hogs, boosting supply. Once the market becomes saturated, market selling prices drop,
producers reduce capacity, and the next up-cycle begins. In short, market selling prices of hogs
move mainly with the supply-demand dynamics.
Market
Equilibrium* Time
Hog Supply
Surplus
Hog Price
Hog Supply
Deficiency
• Supply Surplus
 Hog Prices Decrease
 Unprofitable
A Complete Hog Cycle in the Past (3-5years)
 Supply Deficiency
 Hog Prices Increase
 profitable
Hog Price
Gap between Hog Supply and Demand
Present
Analysis of the Hog Cycle
Source: MARA, Frost & Sullivan
Note: Market equilibrium refers to the balance between supply and demand
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In recent years, tighter industry regulation has reduced volatility in China’s hog industry.
In March 2024, the MARA issued a national policy guideline setting the target for the inventory
of breeding sows at approximately 39 million heads. Under this policy, hog farming companies
submit their breeding sow inventories to local agricultural and rural affairs bureaus, which
conduct preliminary verification and consolidate such data for reporting to the provincial
agricultural authorities. The provincial authorities review provincial-level inventory trends
and, together with the MARA, assess whether the overall inventory remains within the
prescribed target range. If deviations from the target are identified, corrective measures such
as production guidance and targeted incentives may be triggered. By ensuring timely oversight
and coordinated adjustments across provinces, the policy helps align supply with demand,
thereby stabilizing hog production and narrowing price fluctuations. In addition, the
government has introduced a series of complementary measures, such as subsidies and
preferential loans for large-scale breeding farms, policies encouraging the relocation and
modernization of hog slaughtering plants in key production regions, and support for
environmental upgrades and disease-prevention systems, that lower production costs,
strengthen bio-security protection, and help stabilize hog price.
Market Trends and Drivers of Hog Farming Industry in China
 Industrial Value Chain Integration and Extension. With national policies “Opinions of
the General Office of the State Council on Stabilizing Hog Production and Promoting
Structural Upgrading” issued on 2019 by State Council encouraging the relocation of hog
slaughtering plants to major hog-farming regions, there is a clear trend of leading industry
enterprises integrating upstream and downstream operations. These companies are
actively extending their operations into upstream feed production and hog breeding, as
well as downstream slaughtering operations, while progressively establishing fully
integrated industrial chains. This trend not only integrates operations but also improves
resource allocation efficiency, cost control capabilities, and product traceability, thus
driving the industry towards a more coordinated and sustainable development model.
 Standardization and Smart Hog Farming. To address consumers’ concerns on food
safety, the hog industry is rapidly standardizing production processes. Enterprises now
adhere strictly to food safety regulations across the entire value chain, from feed sourcing
to slaughtering. Meanwhile, scientific and smart hog farming practices, advanced
nutrition and veterinary knowledge, along with IoT and smart technologies boost
productivity, enhance animal health, and ensure pork quality, driving the industry towards
further standardization, intelligence, and sustainability.
 Promoting Sustainable Operations to Reduce Carbon Emission. Climate change is a
universal problem that human society is faced with. Leading market players in China’s
hog farming industry have consistently formed business strategies that focus on
environmental protection, researching and developing new environmentally friendly
technologies and practices. For example, multi-storey hog houses offer significant
environmental advantages, such as the wide adoption of sterilization and deodorization
systems that effectively reduce the spread of pollutants and pathogens, minimizing the
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environmental impact of the farming process. In addition, leading companies are actively
pursuing innovations like optimized soybean meal feed formulation, hog houses with
fossil fuel-free heating, and waste utilization systems. It is expected that more hog
producers will strive to promote the sustainable development and enhance the ESG
performance of the hog industry.
 Stable and Vast Consumption and Evolving Preference. China is the world’s largest
pork consumption country. As living standards rise and dietary habits evolve, demand for
animal protein continues to grow, with pork remaining the main sources of animal protein
for Chinese consumers. Overall pork consumption is expected to steadily increase in the
coming years.
Entry Barrier of China’s Hog Farming Industry
 Capital Barrier. The large-scale hog farming model, which is increasingly adopted
worldwide, differs significantly from traditional small-scale operations, particularly in
terms of capital intensity. Large-scale hog producers typically possess strong financial
capabilities to invest in advanced infrastructure, such as standardized facilities, automatic
feeding systems, and integrated environmental protection mechanisms that support
ecological farming practices. As a result, enterprises with sufficient financial strength are
able to scale up hog farming operations.
 Management Barrier. The high quality hog farming process requires a standardized set
of technological procedures and operational protocols. In China, small-scale hog farmers
who lack access to professional technical personnel often struggle to maximize
production efficiency and profitability. As such, only large-scale hog farming enterprises
with the superior breeding capability, disease prevention and control systems, cost
management capabilities can fully realize the economic potential of the hog farming
industry. Currently, management capabilities remain one of the most significant barriers
for enterprises entering China’s hog farming industry.
 Technology Barrier. The hog farming industry is globally recognized as technology-
intensive. Advanced breeding technologies and breeding tools are important for hog
farming companies to ensure mass production of hogs with consistency, adaptability, and
high productivity. In parallel, they must upgrade in-house systems to standardize the
breeding process and manage biosecurity risks. Global leaders have developed
proprietary technologies, processes, and operational know-how that are difficult for new
entrants to replicate, creating high barriers to entry the industry.
 ESG Barrier. China’s hog farming industry faces escalating environmental barriers
driven by stringent regulatory compliance, including mandatory investments in pollution
control infrastructure (e.g. biogas digesters, real-time emission monitoring) and land-use
restrictions near ecologically sensitive zones. High compliance costs disproportionately
burden smaller players. Leading enterprises mitigate these challenges through better
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funding capabilities and proprietary technologies, sustaining compliant and eco-efficient
operations and leading to consolidation of market dominance among R&D-intensive and
capital rich companies with advanced environmental solutions.
Cost of Hog Farming and Hog Feed in China
In the hog farming industry, hog feed is the largest cost component, accounting for
approximately 70% of total costs. This high proportion reflects its crucial influence on the
profitability and operating costs of hog farming. In 2020, the average market price of hog feed
was RMB2.7 per kg in China, which increased to RMB3.3 per kg in 2021 and peaked at
RMB3.6 per kg in 2022, according to NDRC. However, the price began to decline, dropping
to RMB3.5 per kg in 2023 and further to RMB3.2 per kg in 2024.
Hog feed is primarily composed of corn, soybean meal and other ingredients. These key
commodities play a crucial role in determining the market price of hog feed, as their price
movements have a direct impact on production costs. The average market price of corn was
RMB2,146.4 per ton in 2020 in China. It increased to RMB2,726.8 per ton in 2021. There were
some fluctuations in the following years, with prices of RMB2,663.7 per ton in 2022 and
RMB2,630.0 per ton in 2023, before falling to RMB2,197.1 per ton in 2024. For soybean meal,
the price changes are more pronounced. Starting from RMB3,411.7 per ton in 2020, it
increased to RMB3,740.2 per ton in 2021 and further to RMB4,696.5 per ton in 2022. In 2023,
the price decreased slightly to RMB4,578.5 per ton and further decreased to RMB3,345.3 per
ton in 2024. The decline in raw material prices is one of the key factors contributing to the
decrease in hog feed prices in 2023 and 2024.
Average Market Price of Corn and
Soybean Meal, China, 2020-2024
Average Market Price of Hog Feed,
China, 2020-2024
0
1,500
3,000
4,500
6,000
2020 2021 2022 2023 2024
Soybean Meal CornRMB per ton
3,411.7
3,740.2
4,696.5 4,578.5
3,345.3
2,146.4
2,726.8 2,663.7 2,630.0 2,197.1
0
1
2
3
4
5
2.7
3.3 3.6 3.5
3.2
2020 2021 2022 2023 2024
Hog FeedRMB per kg
Source: MARA, Frost & Sullivan Source: NDRC
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OVERVIEW OF CHINA’S HOG SLAUGHTERING AND PROCESSING INDUSTRY
The hog slaughtering and processing industry plays a vital role in the downstream
segment of the hog farming industry value chain. China’s hog slaughtering and processing
value chain mainly comprises three segments: upstream farming, mid-stream slaughtering and
processing, and downstream distribution to various consumer groups. The mid-stream
slaughtering and processing refers to slaughtering hogs and processing them into pork products
for sale. Modern hog slaughtering companies equipped with cutting, cold-chain and packaging
capabilities mainly distribute their products through sales channels such as wholesale markets,
supermarkets, food processors and restaurant chains. The mid-stream slaughtering and
processing is crucial for enhancing the efficiency of the entire industry and for ensuring food
safety.
Downstream distribution channels are primarily operated through direct sales and
distribution models, delivering hog products to wholesale market, supermarkets, restaurants,
food processing companies, and e-commerce retailers, among others. Ultimately, pork products
are bought by end consumers in the form of hot meat, chilled fresh meat, or frozen meat.
Currently, hot meat dominates the market in China. However, compared with other categories,
chilled fresh meat offers significant advantages in terms of safety, nutrition and shelf life. As
a result, market share of chilled fresh meat is expected to steadily increase in the coming years.
The customer structure of China’s hog slaughtering and processing industry is primarily
distribution channel-driven. Whether the demand comes from supermarkets, restaurants, food
processing companies, or e-commerce retailers, etc. the majority is ultimately fulfilled through
distribution channels. Looking ahead, as the penetration rate of large-scale slaughtering
companies continues to increase, and leading companies further expand their direct sales
channels, the proportion of direct procurement from customers, such as food processors,
supermarkets, restaurant chains, and e-commerce retailers, is expected to rise.
In terms of product structure, key products of China’s hog slaughtering and processing
industry primarily consists of carcasses and pork cuts. Carcasses refer to the pork obtained
after the hog is slaughtered, dehaired, eviscerated, and the head and trotters removed, with the
carcasses then split longitudinally along the spine into two halves. Pork cuts refer to further
processing of the carcass into specific parts, such as belly cuts and bone-in portions, according
to customer requirements. In terms of product types, China’s hog slaughtering and processing
industry is still dominated by carcasses, which accounted for over 80% of total output in 2024,
while pork and other cuts makes up approximately 20%. This product structure is largely
shaped by the country’s downstream distribution system, where a significant portion of pork
is sold through traditional wholesale markets. These markets typically receive carcasses
directly from hog slaughtering companies and perform further processing on-site to serve
consumers’ demand.
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Looking ahead, the proportion of pork cuts is expected to increase gradually. It is also
expected that there will be increasing purchase directly from modern retail channels, whose
product offerings are mainly driven by consumer preferences, as there is rising demand for
pre-packaged and processed pork products. Moreover, as direct procurement by food
processors and restaurant chains expands, driven by supply chain modernization, the industry
is likely to shift toward a higher share of pork cuts in the product mix.
Slaughter Volume in China
In terms of hogs slaughtered by large-scale hog slaughtering companies in China, from
2021 to 2024, the slaughter volume grew steadily from 264.9 million heads in 2021 to 337.7
million heads in 2024. Looking ahead, With the further penetration of large-scale slaughtering
companies, the slaughter volume is projected to grow gradually from 363.4 million heads in
2025 to 452.7 million heads in 2029, representing a CAGR of 5.6% from 2025 to 2029.
In terms of sales volume of meat products by hog slaughtering companies in China, from
2020 to 2024, the sales volume of meat products increased from 47.7 million tons to 66.0
million tons and is expected to reach 73.7 million tons in 2029. By product segment, pork cuts
remain the dominant category. Their sales volume grew from 41.5 million tons in 2020 to 58.2
million tons in 2024, representing a CAGR of 8.8%, which is higher than the 5.8% CAGR of
by-products. This is mainly due to faster-growing demand for pork cuts compared to
by-products on the consumption side, combined with improvements in hog farming
technologies on the supply side, which have led to a steady increase in dressing percentage
over the past five years.
Number of Hogs Slaughtered by Large-scale Hog Slaughtering Companies*,
China, 2021-2029E
264.9
2021 2022 2023 2024 2029E 2028E2027E2026E2025E
285.4
343.7 337.7 363.4 385.2 408.7 430.6 452.7CAGR (2021-2024): 8.4%
CAGR (2025E-2029E): 5.6%
Million Heads
0
100
200
300
400
500
Source: MARA, National Bureau of Statistics, Frost & Sullivan
Note* Number of hogs slaughtered by large-scale hog slaughtering companies refers to hog slaughtering companies
with annual slaughter volume that exceeds 20,000 heads. Number starts from 2021 due to abnormal market
conditions in 2020 affected by animal diseases.
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Sales Volume of Meat Products by Hog Slaughtering Companies,
China, 2020-2029E
41.5
2020 20222021 2024 2023 2026E 2025E 2028E2027E 2029E
51.7 57.4 59.7 58.2 59.1
47.7
59.3
65.6 68.0 66.0 66.7
74.0 74.3 73.9 73.7
6.2 7.6 8.2 8.2 7.8 7.7
66.5
7.5
66.8
7.5
66.6
7.3
66.6
7.2
Million tons
0
10
20
30
40
50
60
80
70
Pork cuts By-products
CAGR (2020-2024):  8.4%
CAGR (2025E-2029E): 2.5%
Source: MARA, National Bureau of Statistics, Frost & Sullivan
Future Trends of China’s Hog Slaughtering and Processing Industry
 Industry Consolidation: In recent years, China has promoted the standardization and
centralization of the slaughtering industry through policies encouraging industry
consolidation. The 2021 “Swine Slaughter Management Regulations” support large-scale,
standardized operations. Under those favorable policies, the share of hogs slaughtered by
large-scale slaughtering companies has been rising from 39.5% in 2021 to 48.1% in 2024.
Rising barriers in environmental, food safety, and quarantine standards have accelerated
the exit of small workshops, boosting market concentration and favoring large
enterprises. As a result, industry resources are increasingly concentrated at a few leading
players, enhancing overall efficiency and regulatory advancement.
 Sales Channel Transformation: The sales channels within China’s hog slaughtering and
processing industry are undergoing a structural transformation. Traditionally reliant on
wholesale markets and intermediaries, the industry is increasingly shifting toward direct
supply to large-scale supermarkets, chain restaurants, and food processing enterprises.
These downstream clients place greater emphasis on product standardization, timely
delivery, and stringent food safety standards. Leading slaughtering enterprises, equipped
with integrated production facilities and cold chain logistics systems, are well-positioned
to meet these requirements, thereby reducing reliance on intermediary distribution,
contributing to a comprehensive reshaping of the industry’s sales landscape.
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 Product upgrades: Amid rising consumer expectations and tighter food safety standards,
China’s hog slaughtering and processing industry is accelerating its shift from carcass
sales to more refined offerings such as pork cuts and packaged meat. This transition is
upgrading product portfolios with additional value-added categories. By offering both
large and small packaged products tailored to the needs of supermarkets, chain
restaurants, and food processors, companies are improving supply chain efficiency.
Meanwhile, the Healthy China Initiative (2019–2030) supports the broader adoption of
chilled fresh meat, product refinement, and brand-building, further driving upgrades on
the product side. Together, policy support and market demand are positioning product
upgrades as a core lever for industry competitiveness.
COMPETITIVE LANDSCAPE OF GLOBAL AND CHINA’S PORK INDUSTRY
Since the mid-2010s, many major hog-producing countries around the world have
implemented increasingly stringent environmental regulations and policies aimed at curbing
pollution and promoting sustainable livestock farming practices. These measures have driven
a global shift toward standardization and industrial-scale hog farming. As a result, the number
of individual hog farmers and small-scale hog farmers has declined significantly, while leading
enterprises in various regions have rapidly expanded their production capacities and gained
larger market shares. Despite this trend, the global hog farming industry remains highly
fragmented, leaving ample opportunity for environmentally sustainable and technology-driven
companies to further consolidate the market.
In 2024, the global hog farming industry was led by a few dominant players, with
increasing market concentration driven by large-scale production and integrated supply chains.
The Company not only leads the industry in hog sales volume, but also stands out across
multiple financial and operational metrics globally. In 2024, it was the largest pork company
globally in terms of hog sales volume, reproductive sow inventory, and hog feed production
volume.
Ranking of the Global and China’s Pork Industry
In 2024, the competitive landscape of global hog farming companies was represented by
a relatively fragmented structure, with the top five players accounting for 11.8% of the market
shares in aggregate in terms of sales volume. The Company ranked first globally in terms of
hog sales volume, commanding the market with an impressive sales volume of 71.6 million
hogs.
Besides, over the past five years, the hog sales volume of the Company increased by 53.5
million heads, which ranked first globally. The production capacity increase of the Company
also ranked first globally.
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Ranking of Hog Farming Companies (by Hog Sales Volume), Global, 2024
Ranking Company Hog Sales Volume
(Million)
Market Share
(%)
1 The Company 71.6 5.6%
2 Company A 30.2 2.4%
3 Company B 17.8 1.4%
4 Company C 16.5 1.3%
5 Company D 14.6 1.1%
Top 5 150.7 11.8%
Source: Frost & Sullivan
Ranking of Hog Farming Companies (by Hog Sales Volume), China, 2024
Ranking Company Hog Sales Volume
(Million)
Market Share
(%)
1 The Company 71.6 10.2%
2 Company A 30.2 4.3%
3 Company B 17.8 2.5%
4 Company C 16.5 2.4%
5 Company F 11.1 1.6%
Top 5 147.2 20.9%
In 2024, in terms of slaughter volume, the Company has secured the 5th position globally
and the first in China.
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Ranking of Hog Slaughtering Companies (by Total Slaughter Volume), China, 2024
Ranking Company Slaughter Volume
(Million)
Market Share
(%)
1 The Company 12.5 3.7%
2 Company D 10.3 3.0%
3 Company E 5.3 1.6%
4 Company F 4.0 1.2%
5 Company G 3.0 0.9%
Top 5 35.1 10.4%
Source: Frost & Sullivan
Notes:
1. Company A, headquartered in Guangdong Province, China and established in 1983, is a comprehensive
enterprise integrating livestock and poultry breeding, slaughtering, processing, and distribution, forming a
complete industry chain from breeding to food distribution.
2. Company B, headquartered in Jiangxi Province, China and established in 1998, is a leading agribusiness
enterprise specializing in animal feed and hog farming, with extended operations in meat processing, animal
health, and grain trade.
3. Company C, headquartered in Sichuan Province, China and established in 1998, operates across four main
sectors: feed, white feather poultry, hog farming, and food, with a fully integrated agricultural and animal
husbandry industry chain covering feed, breeding, farming, slaughtering, food deep processing, and
downstream sales channels and branding.
4. Company D, established in 1958 and based in Hong Kong, China, operates across multiple regions and focuses
on three main sectors: meat products, fresh pork, and hog farming, with meat products as its primary business.
5. Company E, headquartered in Shandong Province and established in 2003, is a Chinese food enterprise
engaged in pork processing, integrated slaughtering, and prepared meat products, with operations in fresh food
distribution and cold chain logistics.
6. Company F, headquartered in Bangkok, Thailand and established in 1921, operates across eight business lines:
agro-industry and food, retail and distribution, media and telecommunications, e-commerce and digital,
property development, automotive and industrial products, pharmaceuticals, and finance and investment, and
has business coverage in China.
7. Company G, headquartered in Beijing and established in 2019, is a large state-owned meat processing
enterprise integrating hog breeding, breeding pig sales, hog slaughtering, cold meat processing, cooked meat
products production, frozen storage, grease processing, logistics and distribution, and chain sales.
Source of Information:
We commissioned Frost & Sullivan to conduct market research on the pork industry and prepare the Frost & Sullivan
Report. Frost & Sullivan is an independent global consulting firm founded in 1961 in New Y ork that offers industry
research and market strategies. We have contracted to pay RMB350,000 to Frost & Sullivan for compiling the Frost
& Sullivan Report.
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In preparing the Frost & Sullivan Report, Frost & Sullivan conducted detailed primary research which involved
discussing the status of the industry with certain leading industry participants and conducting interviews with
relevant parties. Frost & Sullivan also conducted secondary research which involved reviewing company reports,
independent research reports and data based on its own research database. Frost & Sullivan obtained the figures for
the estimated total market size from historical data analysis plotted against macroeconomic data as well as considered
the above-mentioned industry key drivers. Its market engineering forecasting methodology integrates several
forecasting techniques with the market engineering measurement-based system and relies on the expertise of the
analyst team in integrating the critical market elements investigated during the research phase of the project. These
elements primarily include expert-opinion forecasting methodology, integration of market drivers and restraints,
integration with the market challenges, integration of the market engineering measurement trends and integration of
econometric variables.
The Frost & Sullivan Report is compiled based on the following assumptions: (i) the social, economic and political
environment of the globe and the PRC is likely to remain stable in the forecast period; and (ii) related industry key
drivers are likely to drive the market in the forecast period.
All the data and forecasts contained in this section are derived from the F&S Report. The commissioned report has
been prepared by Frost & Sullivan independently without the influence from the Company or other interested parties.
Our Directors confirm that, to the best of their knowledge, after making reasonable inquiries, there is no material and
adverse change in the market information since the date of the F&S Report, which may qualify, contradict or have
an impact on the information in this section.
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All of our business operations in the PRC are subject to extensive supervision and
regulation by the PRC government. The following is a summary of the key PRC laws, rules and
regulations applicable to our existing business and operations.
LA WS AND REGULATIONS ON LARGE-SCALE LIVESTOCK AND POULTRY
RAISING AND BREEDING
Record Filing of Livestock and Poultry Farms
Pursuant to the provisions of the Animal Husbandry Law of PRC ( ʕശɛ͏΍ձ਷ळ
) (the “ Animal Husbandry Law ”) promulgated by the Standing Committee of the
National People’s Congress (the “ NPCSC ”) on December 29, 2005, last amended on October
30, 2022 and implemented on March 1, 2023, the entity establishing a livestock and poultry
farm shall file the name, address of the farm, species of livestock and poultry as well as the
scale of breeding with the competent department of agriculture and rural affairs of the people’s
government at the county level where the farm is located, and obtain labels and codes for the
livestock and poultry. To establish a livestock and poultry farm, an entity should meet the
following conditions:
(1) To have production premises and supporting facilities commensurate with its
farming scale;
(2) To have animal husbandry and veterinary technicians in its service;
(3) To meet the conditions for epidemic prevention, as provided for by laws and
administrative regulations and the provisions of the competent department of
agriculture and rural affairs of the State Council;
(4) To have facilities and equipment suitable for the innocuous treatment and resource
utilization of livestock and poultry manure; and
(5) To meet other conditions provided for by laws and administrative regulations.
Production and Operation of Breeding Livestock and Poultry
According to the Animal Husbandry Law, an entity or individual engaged in the
production and operation of breeding livestock and poultry or in the commercial production of
young livestock and poultry shall obtain a license for the production and operation of breeding
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livestock and poultry ( ၇ळອ͛ପ຾ᐄ஢̙ᗇ). To apply for the license for production and
operation of breeding livestock and poultry, an applicant shall meet the following conditions:
(1) The breeding livestock and poultry for production and operation must be of the
species and the supporting lines that have gone through the verification or
identification by the National Commission for Livestock and Poultry Genetic
Resources, or the species and supporting lines introduced from abroad upon
approval;
(2) To have animal husbandry and veterinary technicians commensurate with the scale
of production and operation;
(3) To have the breeding facilities and equipment commensurate with the scale of the
production and operation;
(4) To meet the conditions of epidemic prevention for the breeding livestock and
poultry, as provided for by laws and administrative regulations and the provisions of
the competent department of agriculture and rural affairs of the State Council;
(5) To have comprehensive systems for quality control and breeding record-keeping;
and
(6) To meet other conditions as provided for by laws and administrative regulations.
It is prohibited for any entity or individual to engage in the production or operation of
breeding livestock and poultry, or in the commercial production of young livestock and poultry,
without a license for the production and operation of breeding livestock and poultry, or in
violation of the provisions relevant to such license. It is also prohibited to forge, alter, transfer
or lease the license for production and operation of breeding livestock and poultry. Anyone, in
violation of the abovementioned provisions, may be subject to administrative penalties,
including fines, confiscation of illegal income, orders to cease illegal activities. For serious
violations, the license for production and operation of breeding livestock and poultry shall be
revoked concurrently.
LA WS AND REGULATIONS ON HOG SLAUGHTERING
Pursuant to the Regulations on the Administration of Hog Slaughtering (၍ଣ
ૢԷ), which was last amended by the State Council on June 25, 2021 and became effective
on August 1, 2021, the PRC government implements a system that requires hogs to be
slaughtered by designated hog slaughtering plants (houses) and quarantined in a centralized
manner. The hog products produced and operated by entities and individuals engaged in the
sales of hog products and the production and processing of meat products, catering service
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operators and centralized dining entities must be hog products qualified by quarantine and meat
quality inspection at designated hog slaughtering plants (houses). A designated hog
slaughtering plant (house) shall meet the following conditions:
(1) To have a source of water supply that is commensurate with the operation scale of
the slaughter and meets the standards for water quality set by the government;
(2) To have stand-by slaughter rooms, slaughter rooms, emergency slaughter rooms, hog
slaughter equipment and means of transportation which conform to the requirements
prescribed by the government;
(3) To have the technical staff for hog slaughter who have obtained health certificates;
(4) To have qualified veterinary sanitation inspectors;
(5) To have inspection equipment and sterilization facilities that conform to the
requirements prescribed by the government, and the facilities for pollution
prevention and control that conform to the environmental protection requirements;
(6) To have the facilities for innocuous treatment of diseased hogs and hog products or
entrustment agreement for innocuous treatment; and
(7) To obtain a certificate for animal epidemic prevention conditions (ૢ΁Υ
ᗇ) in accordance with the law.
A designated hog slaughtering plant (house) is required to establish a stringent
management system on the inspection of meat product quality. Inspection of meat product
quality shall be conducted in accordance with the meat quality inspection procedures for hog
slaughtering, and must be carried out simultaneously with hog slaughtering, and the inspection
results must be recorded truthfully. The records of inspection results must be retained for at
least two years. Hog products of a designated hog slaughtering plant (house) shall not leave the
plant (house) before they have undergone the inspection process or if they fail such inspection.
LA WS AND REGULATIONS ON ANIMAL EPIDEMIC PREVENTION
General Provisions on Animal Epidemic Prevention
Pursuant to the provisions of the Animal Epidemic Prevention Law of the PRC ( ʕശ
), which was last amended by the NPCSC on January 22, 2021 and
became effective on May 1, 2021, to operate an animal farm, animal isolation site, animal
slaughtering and processing place, as well as a innocuous treatment facility of animals and
animal products shall apply to the competent agricultural and rural authorities of the local
government at or above the county level for a certificate for animal epidemic prevention
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conditions (ᗇ). Animal farms, animal isolation sites, animal slaughtering
and processing places and innocuous treatment facilities of animals and animal products shall
comply with the following provisions:
(1) The facilities are located at a distance from public places, such as residential areas,
sources of drinking water, schools and hospitals as prescribed by the competent
department of agriculture and rural affairs of the State Council;
(2) The enclosure and isolation of the production and operation area and the engineering
design and relevant processes shall meet the requirements for animal epidemic
prevention;
(3) There shall be sewage and waste treatment facilities commensurate with their scale,
the facilities and equipment for the innocuous treatment or refrigeration of animals
dead of diseases and diseased animal products, and the facilities and equipment for
cleaning and disinfection;
(4) There shall be licensed veterinarians or technicians for animal epidemic prevention
commensurate with the scale;
(5) There should be comprehensive animal prevention systems including those relating
to isolation and disinfection, purchase and sales records and routine inspection;
(6) Other conditions for animal epidemic prevention as prescribed by the competent
department of agriculture and rural affairs of the State Council shall be met.
In addition to meeting the conditions prescribed in the preceding provisions, a innocuous
treatment facility of animals and animal products shall be equipped with pathogen detection
equipment, detection capability, and special transportation vehicles in compliance with the
requirements for animal epidemic prevention.
Before slaughtering, selling or transporting animals, or selling or transporting animal
products, the owner shall apply for quarantine to the local animal health supervision agency in
accordance with the regulations of the competent department of agriculture and rural affairs of
the State Council. After receiving the quarantine application, the animal health supervision
agency shall promptly appoint an official veterinarian to carry out quarantine on animals and
animal products; if the quarantine is qualified, a quarantine certificate shall be issued and a
quarantine mark shall be affixed. The official veterinarian who implements quarantine shall
sign or stamp the quarantine certificate and quarantine mark and shall be responsible for the
quarantine conclusion. Licensed veterinarians or animal epidemic prevention technicians in
animal farms and slaughterhouses shall assist official veterinarians in implementing
quarantine.
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Pursuant to the Measures for the Examination of Animal Epidemic Prevention Conditions
(2022) (ج2022) ) promulgated by the MARA on September 7, 2022
and implemented on December 1, 2022, where an animal farm, animal isolation site, animal
slaughtering and processing place, as well as a place where animals and animal products are
given innocuous treatment is to be established, a site selection request shall be submitted to the
competent department of agriculture and rural affairs of the local people’s government at the
county level. After obtaining the certificate for animal epidemic prevention conditions, if the
premises address or business scope is changed, the entity shall apply anew for the certificate
and surrender the original certificate, which shall be revoked by the original issuing authority.
Any alteration of the layout, facilities, equipment or systems that may cause changes in the
conditions for animal epidemic prevention shall be reported to the original certificate-issuing
authority 30 days in advance. In case of any changes in the name of the entity or its legal
representative (responsible person), such certificate for animal epidemic prevention conditions
shall be applied for modifying within 15 days after the change. The certificate holder shall, by
the end of March each year, report the status of animal epidemic prevention and the
implementation of the epidemic prevention systems of the previous year to the competent
department of agriculture and rural affairs of the local people’s government at the county level.
Pursuant to the Measures for Administration of Animal Quarantine (၍ଣ፬
) promulgated by the MARA on September 7, 2022 and implemented on December 1,
2022, if animals or animal products are sold or transported, the owner must apply for
quarantine to the local animal health supervision agency three days in advance; if the animals
are slaughtered, the quarantine must be reported to the local animal health supervision agency
six hours in advance; if the animals are slaughtered urgently, the report can be made at any
time. Animals entering slaughtering and processing places must be accompanied by animal
quarantine certificates and have livestock and poultry identification labels that comply with
regulations. Slaughtering and processing sites should strictly implement systems such as
animal entry inspection and registration, and inspections of animals waiting to be slaughtered,
and check the animal quarantine certificates and livestock and poultry identification of animals
entering the site for slaughter. If any animals are found to be infected or suspected of being
infected, the owners should immediately report to the local agricultural and rural authorities or
animal disease prevention and control agencies.
Prevention and Control of African Swine Fever
The prevention and control of African Swine Fever are mainly governed by the Animal
Epidemic Prevention Law of the PRC, the Regulations on the Administration of Slaughtering
of Hogs, the Measures for Administration of Animal Quarantine, the Regulations on Handling
Major Animal Epidemic Emergencies (ૢԷ), which was last amended
by the State Council on October 7, 2017 and implemented on the same date, and the National
Plan for Handling Major Animal Epidemic Emergencies (ཫ
), which was issued by the State Council on February 27, 2006 and implemented on the
same date.
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According to the Regulations on Handling Major Animal Epidemic Emergencies, if
relevant entities and individuals engaged in animal raising, slaughtering, processing,
transportation and operation activities discover that animals have become ill or died in groups,
they should immediately report to the local county (city) animal epidemic prevention and
control supervision agency and cooperate with follow-up investigation and treatment.
Pursuant to the requirements of the Opinions of the General Office of the State Council
on Strengthening Prevention and Control of African Swine Fever (Guo Ban Fa [2019] No. 31
(จԈ(਷፬೯[2019]31 ໮)) issued by the
General Office of the State Council on June 22, 2019 and implemented on the same date, local
governments are responsible for implementing measures to strengthen the prevention and
control of African Swine Fever. This document encourages the promotion of standardized
large-scale farming of hogs and gradual reduction of the proportion of free-range farming, and
urges the implementation of farming management systems such as closed farming and
all-in-all-out farming, so as to improve the level of biosecurity protection in hog farming sites
(households); provides guidance for hog farming sites (households) to effectively implement
measures such as cleaning and disinfection, innocuous treatment, etc., and strictly control the
access of vehicles and personnel to the premises; urges hog farming sites (households) to report
on epidemics in a strict and standardized manner, handle epidemics properly and prevent the
spread of epidemics; requires the implementation of the slaughterhouse (farm) self-inspection
system, supervises and guides hog slaughtering plants (houses) to implement various
prevention and control measures, supervises and guides hog slaughtering plants (houses) to
strictly fulfill their main responsibilities for animal epidemic prevention and hog product
quality and safety, resolutely prevents dead hogs and uninspected or unqualified hogs from
entering the slaughterhouse (farm), and implements innocuous treatment of dead hogs. It
encourages the establishment of standardized production systems and continued efforts to
create high-quality and standardized demonstration farms. It calls for the refining of policies
for facility agricultural land and ensures land supply for the construction of relevant supporting
facilities for large-scale hog farming sites (households), and supports hog farming enterprises’
development throughout the whole industry chain in provincial or regional jurisdictions.
The Notice of the MARA on the Circulation of the Plan on Prevention and Control of
African Swine Fever and other Major Animal Diseases by Region (Trial Implementation)
(Nong Mu Fa [2021] No. 12) (Ι೯<षʱਜԣછʈЪ
ࣩ(༊Б)>)(೯[2021]12 ໮)) (issued by the MARA on April 16, 2021 and
implemented on the same date) divided China into five regions to carry out prevention and
control by region. The notice calls for the regulation of hog transport, pursuant to which, in
principle, hogs other than breeding hogs, piglets and hogs in areas and subareas free from
African Swine Fever and other major animal diseases shall not be transported outside the
region, so as to promote the shift from “hog transport” to “pork transport”. It also calls for the
phased improvement and implementation of the “point-to-point” cross-district and cross-
province transport policy, which allows “point-to-point” transport of qualified hogs between
regions, where necessary.
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LA WS AND REGULATIONS ON THE FOOD INDUSTRY
Food Safety
Pursuant to the Food Safety Law of the PRC (2025 Amendment) (ۜ࠮
ج2025͍)) (the “ Food Safety Law ”) which was promulgated by the NPCSC on
February 28, 2009, last amended on September 12, 2025 and became effective on December
1, 2025, and the Implementing Regulations for the Food Safety Law of the PRC (2019
Amendment) (ૢԷ(2019ࠈࡌ)) which was promulgated
by the State Council on July 20, 2009, last amended on October 11, 2019 and implemented on
December 1, 2019: (1) any entity engaging in food production, food sales and catering services
shall obtain the relevant license. However, no permit is required for the sale of edible
agricultural products or only pre-packed food; (2) food production and operation shall comply
with food-safety standards and certain other requirements. Food producers shall not purchase
or use raw food materials, food additives or food related products which do not meet
food-safety standards; (3) each food producer or operator shall establish and implement a
personnel health management system. Each worker who engages in food production or
operation is required to take a physical examination each year and obtain health certificate
prior to working; (4) food producers shall check the licenses and the product qualification
certificate of their suppliers before purchasing raw food materials, food additives and
food-related products from them. Each food production enterprise shall establish a
procurement check record system and a food ex-factory check record system and ensure the
records are authentic, and the records and vouchers shall be kept for at least six months after
the expiration of the shelf life of the products; if there is no explicit shelf life, they shall be
kept for no less than two years; and (5) the packages of pre-packed food shall bear labels. The
labels shall state matters including the name, specifications, net content, date of production, list
of ingredients or components, producer’s name, address and contact information, shelf life,
product standard code, storage conditions, the general name of the food additives used in the
national standards, the food production license number, and other items as required by laws,
regulations or food safety standards.
The PRC has established a food recall system. When a food producer finds that the food
produced by it does not comply with food safety standards or there is any evidence that it may
be harmful to human health, it shall immediately stop production, recall the food on the market,
notify the relevant producers, traders and consumers, and record the recall and notification.
When a food trader finds that the food traded by it has the situations specified above, it shall
immediately stop trading such food, notify the relevant producers, traders and consumers, and
record the cessation of trading and the notification. Food producers and traders shall take
measures (including but not limited to harmless disposal and destruction) for the recalled food,
and report the food recall and handling to the local food safety supervision and administration
department of the people’s government at the county level. Where the food producers or traders
fail to recall or stop producing or trading the food under Article 63 of the Food Safety Law,
the food safety supervision and administration department of the people’s government at or
above the county level shall order them to recall or stop trading.
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In the event of any breach of the Food Safety Law, relevant authorities may confiscate any
illegal gains and food illegally produced or traded, issue warnings and impose rectification
orders and monetary penalties up to 30 times the value of the illegal products, as well as revoke
the relevant license and impose criminal liability in severe cases.
Food Production and Food Operation Licensing
According to the Administrative Measures for Food Operation Licensing and Filing (࠮
) promulgated by the SAMR on June 15, 2023 and implemented
on December 1, 2023 and the Measures for the Administration of Food Production Licensing
() last amended on January 2, 2020 and implemented on March 1,
2020, those engaged in food production activities within the territory of the PRC shall obtain
a food production license, and those engaged in food sales and catering service activities within
the territory of the PRC shall obtain a food operation license according to law. The food
production license and food operation license are valid for five years.
For those who engage in food operation activities without obtaining a food operation
license or engage in food production activities without obtaining a food production license, the
local market supervision and administration department at or above the county level shall
impose penalties in accordance with the relevant provisions of the Food Safety Law. That is,
the food safety supervision and administration department of the people’s government at or
above the county level shall confiscate the illegal gains or the food illegally produced and
operated, and also impose a fine.
LA WS AND REGULATIONS ON PRODUCT QUALITY
General Provisions on Product Quality
The Product Quality Law of the PRC () (the “ Product
Quality Law ”) promulgated by the NPCSC on February 22, 1993, last amended on December
29, 2018 and implemented on the same date is the principal law governing the supervision and
administration of product quality and applies to all product production and selling activities
within the territory of the PRC.
According to the Product Quality Law, producers are liable for the quality of products
they produce, and sellers must take reasonable actions to ensure the quality of the products they
sell.
The producers shall be liable to compensate for any bodily harm or damage to property
(other than the defective product itself) (the “ property of others ”) caused by the defective
products of the producer unless the producer is able to prove that: (1) it has not circulated the
product; (2) the defect did not exist at the time when the product was circulated; or (3) the state
of scientific or technological knowledge at the time when the product was circulated was not
sufficient for the detection of the existence of the defect.
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The seller will be liable to compensate for any bodily harm or damage to the property of
others caused by the defective products it sold if such defect is attributable to the seller. A
person who is harmed or whose property is damaged by the defective product may claim such
loss against the producer or the seller.
Any producer or seller that produces or sells products not up to the relevant national or
industry standards for ensuring personal health and safety and property security shall be
ordered to suspend production and sale with illegally produced or sold products confiscated,
and be imposed a fine with any illegal gains confiscated. Where the case is serious, the
business license shall be revoked. Where a criminal offense is constituted, the offenders will
be pursued for criminal liabilities.
The Civil Code of the PRC (Պ), promulgated by the National
People’s Congress (the “NPC”) on May 28, 2020 and implemented on January 1, 2021,
stipulates that producers shall bear tort liability for damage caused to others by their defective
products. If the defective products are identified after they have been put into circulation, the
producers or the sellers shall take remedial measures including the cessation of sales, issuance
of a warning, recall of products in a timely manner. The producers or the sellers shall also bear
tort liability if they fail to take remedial measures in a timely manner or have not made
effective efforts to take remedial measures, thus causing more damages. In the event of a recall,
the producer or seller shall bear the necessary expenses so incurred by the tort victim. The Food
Safety Law further stipulates that in the event that a producer produces food that does not meet
the food safety standards or a trader knowingly markets food that does not meet the food safety
standards, in addition to demanding compensation for losses, the consumer may also demand
compensation from the producer or trader of 10 times the price or three times the losses; If the
amount of additional compensation is less than RMB1,000, it shall be RMB1,000.
Law on Quality and Safety of Agricultural Products
The Law on Quality and Safety of Agricultural Products of the PRC (2022 Revision)
(ج2022ࠈࡌ)) (the “ Agricultural Products Safety
Law”), which was last amended by the NPCSC on September 2, 2022 and came into effect on
January 1, 2023, governs the supervision and administration of the quality and safety of
agricultural products, namely plants, animals, microorganisms and other products obtained in
the course of agricultural activities. The Agricultural Products Safety Law regulates
agricultural products in the following aspects to ensure that they meet the requirements
necessary to protect people’s health and safety, including: (1) the quality and safety standards
of agricultural products; (2) the production premises of agricultural products; (3) the
production of agricultural products; and (4) the sales of agricultural products.
According to the Agricultural Products Safety Law, agricultural product producers shall
use agricultural inputs such as pesticides, veterinary drugs, fertilizers, and agricultural films in
a scientific and reasonable manner to avoid contaminating production premises of agricultural
products. The agricultural product producers and operators shall also ensure that the
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preservatives, additives and other chemicals used in the process of packaging, preservation,
storage and transportation of agricultural products shall be in conformity with the relevant
mandatory national standards and other provisions on the quality and safety of agricultural
products.
Product Liabilities
Producers and sellers of defective products in the PRC may incur liability for losses and
injuries caused by such products. According to the Law on the Protection of Consumer Rights
and Interests of the PRC (), which was promulgated on
October 31, 1993 by the NPCSC and last amended on October 25, 2013 and came into effect
on March 15, 2014, consumers or other victims of losses and damages caused by defective
products can claim compensation from the seller or from the producer.
According to the above-mentioned laws and regulations, producers and sellers are
required to ensure that products which they produce and sell meet the requirements for
safeguarding human health and ensuring human and property safety. Failing to do so will lead
to a range of penalties, including the suspension of production and sale, confiscation of the
products and illegal gains, imposition of fines, revocation of business licenses, and/or even
criminal liabilities. In addition, if the products cause personal injuries or other form of torts,
the producers and sellers of the products may be subject to tort liability.
LA WS AND REGULATIONS ON FEED PRODUCTION AND PROCESSING
Grain Procurement
According to the Administrative Regulation of Grain Circulation (ஷ၍ଣૢ
Է) which was issued by the State Council on May 26, 2004 and last amended on February
15, 2021 and came into effect on April 15, 2021, enterprises engaged in grain procurement shall
file its name, address, responsible person, storage facilities and other information with the
grain and reserve administrative department of the people’s government at the county level in
the place of procurement for record, and shall promptly update the filing if the filing
information changes. All operators engaged in grain procurement, sales, storage and
processing, as well as feed and industrial grain enterprises, shall establish grain operation
ledgers and report basic data and relevant information on grain procurement, sales, and storage
to the local grain and reserve administrative department of the people’s government at the
county level. The retention period of the grain operation ledgers shall be not less than three
years.
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Feed Production
According to the Regulations on Administration of Feed and Feed Additives (ձཱ
૴̋ኒ၍ଣૢԷ), which were promulgated by the State Council on May 29, 1999, last
amended on March 1, 2017 and implemented on the same date, and the Administrative
Measures for Production Licensing of Feed and Feed Additives (૴̋ኒ͛ପ஢̙
), which were issued by the MARA on May 2, 2012, last amended on January 7,
2022 and implemented on the same date, feed production enterprises must comply with feed
industry development plans and industrial policies and meet the following conditions:
(1) Having plant buildings, equipment and warehousing facilities accommodating the
feed and feed additive production;
(2) Having full-time technical staff to accommodate the feed and feed additive
production;
(3) Having necessary product quality testing bodies, staff and facilities and quality
control systems;
(4) Having a production environment that meets the national safety and health
requirements;
(5) Having in place pollution prevention and control measures that meet the national
environmental protection requirements; and
(6) Other conditions specified in the administration standards for feed and feed
additives quality safety formulated by the competent administrative department of
agriculture under the State Council.
Enterprises are required to obtain a production license before operating a feed production
business. In addition, enterprises are required to maintain the requisite conditions to produce
feeds and follow relevant rules relating to feed production. Violation of these rules or failing
to obtain production license could lead to a range of penalties, including confiscation of the
products, instruments and illegal gains, imposition of fines or even revocation of the
production licenses.
LA WS AND REGULATIONS ON THE PRODUCTION AND OPERATION OF
VETERINARY DRUGS
The Regulations on the Administration of V eterinary Drugs (2020 Revision) ( ᖕᖹ၍ଣ
ૢԷ(2020ࠈࡌ)), which were last amended and implemented by the State Council on March
27, 2020, mainly stipulates relevant administrative licensing, supervision and management
regarding veterinary drug production enterprises, veterinary drug business enterprises,
veterinary medical entities, approval of new veterinary drugs, and the management of import
and export of veterinary drugs.
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LA WS AND REGULATIONS ON IMPORT AND EXPORT
Recordation of Customs Declaration Entities
According to the Foreign Trade Law of the PRC (),
which was promulgated by the NPCSC on May 12, 1994 and last amended and came into effect
on December 30, 2022, from December 30, 2022, foreign trade operators engaged in the import
and export of goods or technologies are no longer required to go through the recordation
procedures with the foreign trade department of the State Council or the institutions authorized
by it.
According to the Customs Law of the PRC (), which was last
amended and implemented by the NPCSC on April 29, 2021, the General Administration of
Customs of the PRC (the “ GACC ”) is the entry and exit customs supervision and
administration authority of the PRC. It supervises the transportation vehicles, goods, luggage,
postal articles and other articles entering and leaving the country, collects customs duties and
other taxes and fees, prevents and counters smuggling. Consignees or consignors of imported
and exported goods and customs declaration enterprises shall go through customs declaration
recordation procedures with the competent customs in accordance with the law.
According to the Provisions on the Administration of Recordation of Customs Declaration
Entities of the PRC () promulgated by the
GACC on November 19, 2021 and came into effect on January 1, 2022, consignees or
consignors of imported and exported goods and customs declaration enterprises applying for
recordation shall obtain market entity qualification.
Compulsory Inspection
According to the Law on Import and Export Commodity Inspection of the PRC ( ʕശ
) last amended and implemented by the NPCSC on April 29,
2021, and the Implementation Regulations for the Law on Import and Export Commodity
Inspection of the PRC (ૢԷ) last amended by the
State Council on March 29, 2022 and came into effect on May 1, 2022, the GACC is
responsible for formulating and adjusting the catalogue of import and export commodities that
must undergo compulsory inspection. According to this catalogue, the import and export of
hogs and pork must undergo compulsory inspection.
Inspection and Quarantine of Imported and Exported Grain
According to the Measures for Supervision and Administration of Inspection and
Quarantine of Imported and Exported Grain () last
amended and implemented by the GACC on November 23, 2018, consignees or consignors of
imported and exported grain, as well as the production, processing, storage, and transportation
enterprises, shall engage in production and business activities in accordance with the law,
establish and implement a grain quality and safety control system and an epidemic prevention
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and control system, and be responsible for the quality and safety of imported and exported
grain. The imported grain shall be processed and used in the designated facilities with proper
quarantine and treatment capabilities. Without effective pest control treatment or processing,
the imported grain shall not directly enter the market circulation field.
Export License
According to the Regulations on the Administration over Import and Export of Goods of
the PRC (ආ̈ɹ၍ଣૢԷ), which were promulgated by the State
Council on March 10, 2024 and became effective on May 1, 2024, the PRC implements a
unified management system for the import and export of goods. and enforces export license
administration on goods that are subject to export restrictions. According to the Catalogue of
Goods Subject to Export License Administration (2025) (ͦ፽(2025
ϋ)) issued by the Ministry of Commerce of the PRC (the “MOFCOM”) and the GACC, hogs
and pork are subject to such licensing requirements.
Food Export Record-Filing
According to Administrative Measures for the Safety of Import and Export Food of the
PRC (), which were promulgated by the GACC
on April 12, 2021 and became effective on January 1, 2022, manufacturers of food for export
are subject to record-filing requirements. The GACC is responsible for the nationwide
administration of record-filing by manufacturers of food for export. Manufacturers of food for
export shall file with the customs at the place of their domicile, and the filing procedures and
requirements shall be formulated by the GACC. Export food manufacturers and operators who
fail to comply with the relevant regulations may be imposed on a range of penalties, including
warnings, fines or even criminal charges.
Qualification of Live Hog Feeding Farms for Hong Kong and Macau
Pursuant to the Administrative Measures for the Inspection and Quarantine of Edible
Terrestrial Animals for Hong Kong and Macau (),
which was promulgated by the GACC on January 22, 2024 and became effective on March 1,
2024, the customs authorities implement a registration-based management system for breeding
farms supplying edible terrestrial animals to Hong Kong and Macao. Registration is conducted
on a per-breeding-farm basis, with one certificate issued per farm, and registration numbers
shall be exclusively used for their designated farms. Breeding farms that fail to register are
prohibited from supplying edible terrestrial animals to the Hong Kong and Macao Special
Administrative Regions of China. Violations of these regulations will result in warnings or
fines.
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Registration of Farms Supplying Raw Materials for Export Food
According to the Food Safety Management Measures for Import and Export of the PRC
(), planting and breeding farms producing raw
materials for export food shall register with the local customs authorities. The GACC publishes
a unified list of registered raw material planting and breeding farms, with registration
procedures and requirements established by the GACC. Furthermore, under the Announcement
on the Catalogue of Export Food Raw Material V arieties Subject to Registration Management
(ʮѓ), pork is listed as a raw material
requiring registration for export purposes.
LA WS AND REGULATIONS ON ENVIRONMENTAL PROTECTION
General Provisions for Environmental Protection
The main laws and regulations related to environmental protection that are applicable to
the Company include the Environmental Protection Law of the PRC (2014 Amendment) ( ʕ
ج2014ࠈࡌ)) (last amended by the NPCSC on April 24, 2014 and
effective on January 1, 2015), the Atmospheric Pollution Prevention and Control Law of the
PRC (2018 Amendment) (جط2018͍)) (last amended by
the NPCSC and came into effect on October 26, 2018), the Water Pollution Prevention and
Control Law of the PRC (2017 Revision) ((2017͍)) (last
amended by the NPCSC on June 27, 2017 and effective on January 1, 2018), the Law of the
PRC on Noise Pollution Prevention and Control ()
(promulgated by the NPCSC on December 24, 2021 and implemented on June 5, 2022), the
Law of the PRC on the Prevention and Control of Environment Pollution Caused by Solid
Wastes (2020 Revision) ((2020ࠈࡌlast
revised by the NPCSC on April 29, 2020 and effective on September 1, 2020), etc. These laws
and regulations stipulate the prevention, control and supervision of air pollution, water
pollution, noise pollution and solid waste pollution, so as to protect and improve the
environment, safeguard public health and promote sustainable economic and social
development.
Environmental Protection of Construction Projects
In accordance with the Law on Environmental Impact Assessment of the PRC ( ʕശɛ
), which was promulgated by the NPCSC on October 28, 2002 and
implemented on September 1, 2003, and last amended and implemented on December 29, 2018,
the Chinese government implements an environmental impact assessment system for
construction projects. Based on the appraisals of the environmental impacts of construction
projects according to the seriousness of the impacts, the construction entities shall work out the
report of environmental impacts, the report form of environmental impacts or the registration
form of environmental impacts to explain relevant environmental impacts. Where the
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environmental impact assessment document of a construction project fails to undergo the
examination of the approval department in accordance with the law or is disapproved after
examination, the construction entity shall not commence construction.
The Regulations on the Prevention and Control of Pollution from Large-scale Farming of
Livestock and Poultry (ૢԷ), which was issued by the State
Council on November 11, 2013 and implemented on January 1, 2014, provides that the
construction, reconstruction and expansion of livestock and poultry farming sites and clusters
shall comply with the development plans for the animal husbandry industry and plans for
pollution prevention and control in livestock and poultry farming, meet the requirements of
animal epidemic prevention, and undertake environmental impact assessment. Large-scale
livestock and poultry farming sites and clusters that may cause significant impact on the
environment shall prepare an environmental impact report; other livestock and poultry farming
sites and clusters shall fill out an environmental impact registration form. At the same time,
livestock and poultry farming sites and clusters shall, according to the breeding scale and the
needs of pollution prevention and control, build corresponding comprehensive utilization and
innocuous treatment facilities.
Pursuant to the Classified Management Catalogue of Environmental Impact Assessments
for Construction Projects (ணධͦᐑྤᅂᚤ൙ᄆʱᗳ၍ଣΤ፽), the livestock and
poultry farming sites and clusters shall prepare environmental impact reports or fill out
environmental impact registration forms, under which, (1) for large-scale livestock and poultry
farming with an annual output of 5,000 hogs (or the equivalent scale for other livestock and
poultry species) and above / large-scale livestock and poultry farming with 2,500 hogs in stock
(or the equivalent scale for other livestock and poultry species) and above with no output,
large-scale livestock and poultry farming involving environmentally sensitive areas (referring
to national parks, nature reserves, scenic spots, world cultural and natural heritage sites, special
protection marine areas, drinking water source protection areas; areas whose main functions
are residential, medical and health care, culture and education, scientific research,
administrative offices, etc., as well as heritage conservation entities), environmental impact
reports should be prepared; (2) livestock and poultry farms and breeding areas of other scales
(except those below large-scale) shall fill out environmental impact registration forms.
Pursuant to the Regulations on the Administration of Environmental Protection of
Construction Projects (2017 revision) (ᚐ၍ଣૢԷ(2017ࠈࡌwhich
was promulgated by the State Council on November 29, 1998, last amended on July 16, 2017
and effective on October 1, 2017 , the supporting environmental protection facilities for a
construction project must be designed, constructed and put into operation simultaneously with
the major construction works of the construction project. Upon the completion of the project,
the construction entity shall conduct an acceptance of supporting environmental protection
facilities and prepare an acceptance inspection report. The construction project can only be put
into production or use after passing the acceptance.
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Pollutant Discharge Permit and Waste Disposal
The Regulations on the Prevention and Control of Pollution from Large-scale Farming of
Livestock and Poultry provides that the state encourages and supports the comprehensive
utilization of waste from the farming of livestock and poultry by way of returning manure to
the field, producing biogas and organic fertilisers, etc. For diseased livestock and poultry
farming wastes including disease-infected livestock and poultry and their excrement, products
made from disease-infected livestock and poultry, and carcasses of livestock and poultry dead
of diseases or unknown causes, shall be treated in accordance with the relevant laws,
regulations and the requirements of the competent departments of agriculture and animal
husbandry of the State Council, through innocuous treatments such as deep burial, chemical
treatment, and incineration, and no arbitrary treatment shall be allowed.
The Environmental Protection Law of the PRC, the Water Pollution Prevention and
Control Law of the PRC (2017 revision), and the Atmospheric Pollution Prevention and
Control Law of the PRC (2018 Amendment) have all stipulated that livestock and poultry
farming sites and clusters shall carry out scientific disposal, comprehensive utilization or
innocuous treatment of the excrement, wastewater and carcasses of livestock and poultry.
Pursuant to the Administrative Measures for Pollutant Discharge Licensing ( રϮ஢̙
), which was promulgated by the PRC Ministry of Ecology and Environment (the
“MEE”) on April 1, 2024 and taking effect on July 1, 2024, enterprises, public institutions and
other producers and operators that are subject to pollutant discharge permit administration shall
apply for a pollutant discharge permit and discharge pollutants in accordance with the
requirements of the pollutant discharge permit. Any enterprise that fails to obtain a pollutant
discharge permit shall not discharge pollutants.
According to the Catalogue for Classified Administration List of Pollutant Discharge
Permits for Stationary Pollution Sources (2019 V ersion) (๕રϮ஢̙ʱᗳ၍ଣΤ፽
(2019و)), which was promulgated by the PRC Ministry of Ecology and Environment on
December 20, 2019 and took effect on the same date, based on factors such as the amount of
pollutants generated and discharged, and the degree of impact on the environment, focused
management, streamlined management, and registration management of pollution discharge
permits are implemented. Pollutant-discharging entities subject to discharge registration are
not required to apply for a pollutant discharge permit, but should fill in a pollutant discharge
registration form on the National Pollutant Discharge Permit Administration Information
Platform. Large-scale livestock and poultry farming sites and clusters without sewage outfalls,
and livestock and poultry farming sites and clusters below large-scale with sewage outfalls
shall be subject to discharge registration, which means that they are only required to fill in the
pollutant discharge registration form on the National Pollutant Discharge Permit
Administration Information Platform.
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The Regulations on Pollutant Discharge Permit Administration ( રϮ஢̙၍ଣૢԷ)
issued by the State Council on January 24,2021 and implemented on March 1, 2021, further
enhance the pollutant discharge administration. Pollutant-discharging entities shall practice
focused and streamlined management pursuant to the amount of pollutants generated and
discharged and the degree of impact on the environment. The review, decision and information
disclosure of pollutant discharge permit shall be handled through the National Pollutant
Discharge Permit Administration Information Platform. The pollutant discharge permit is valid
for 5 years and the discharging entities should apply for renewal of the pollutant discharge
permit 60 days before its expiry.
LA WS AND REGULATIONS ON PRODUCTION SAFETY
Production Safety
Pursuant to the Production Safety Law of the PRC (),
which was promulgated by the NPCSC on June 29, 2002, last amended on June 10, 2021, and
took effect on September 1, 2021, any entity whose production safety conditions do not meet
the requirements shall not engage in production and business operation activities. Production
and business operation entities shall educate and train employees on production safety to
ensure that employees have the necessary production safety knowledge, are familiar with the
relevant laws and regulations and rules on production safety and safety operation procedures,
master the safety operation skills of their own posts, understand emergency measures, and
know the rights and obligations regarding production safety. Employees who fail to pass the
education and training on production safety shall not be allowed to work. The safety facilities
of a new construction, reconstruction or expansion project shall be designed, constructed and
put into use simultaneously with the main body of the project. Investment in safety facilities
shall be included in the budget of the construction project.
Fire Prevention
According to the Fire Prevention Law of the PRC () (the
“Fire Prevention Law ”), which was promulgated by the NPCSC on April 29, 1998 and last
amended with effect from April 29, 2021, design and construction of the fire control facilities
for a construction work shall comply with the national fire control technical standards. The
developer, designer, constructors and project supervisor of a construction project shall be
responsible for the quality of the design and construction of the fire control facilities for the
construction work according to the relevant laws.
According to the Fire Prevention Law and the Interim Provisions on Design Inspection
and Acceptance of Fire Protection of Construction Works (᜕ϗ၍ଣ
) (the “ Interim Provisions on Fire Protection ”), which was promulgated by the
MOHURD on April 1, 2020, last amended on August 21, 2023 with effect from October 30,
2023, a special construction work as stipulated in the Interim Provisions on Fire Protection
shall be subject to fire protection design review before the construction of such work is
commenced and shall be subject to fire protection inspection before such work is put into use.
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Construction works other than a special construction work shall be subject to fire protection
inspection filing, and the competent administrative authority in charge of the examination and
acceptance of fire protection design shall conduct spot inspections. If a construction work fails
to pass the spot inspection, the use of such construction shall cease, and rectification actions
must be taken with a view to applying for a re-inspection.
LA WS AND REGULATIONS ON W ATER RESOURCES
Pursuant to the Water Law of the PRC () promulgated by the
NPCSC on January 21, 1988 and last amended on July 2, 2016, the Regulations on
Administration of the License for Water Drawing and the Levy of Water Resource Fees ( ՟
˥஢̙ձ˥༟๕൬ᅄϗ၍ଣૢԷ) promulgated by the State Council on February 21, 2006
and revised on March 1, 2017 and the Measures for the Administration of Water Drawing
Licensing () promulgated by the Ministry of Water Resources on April
9, 2008 and last amended on December 22, 2017, except under the special circumstances where
a Water-Drawing License is not required, any entity or individual using water drawing
engineering structures or facilities to directly draw water resources from rivers, lakes or
underground must apply to the water administrative department for a water drawing license and
pay water resources fees. The water drawing entity or individual shall draw water according to
the approved annual water drawing plan. For the water drawing exceeding the plan or quota,
water resource fees shall be charged progressively on the excessive part. The valid term of
water drawing license shall generally be 5 years, and shall not exceed 10 years. If, at expiry
of the valid term, the license certificate needs to be renewed, the water drawing entity or
individual shall file an application to the original approval authority 45 days prior to the expiry
of the valid term.
Non-compliance with the above regulations on water use may result in administrative
penalties including fines, rectification and revocation of water drawing license.
LA WS AND REGULATIONS ON LAND USE
According to the Land Administration Law of the PRC ( ʕശɛ͏΍ձ਷ɺή၍ଣ
), which was issued by the NPCSC on June 25, 1986 and implemented on January 1, 1987,
and last amended on August 26, 2019 and implemented on January 1, 2020, land in China is
classified into agricultural land, construction land and unused land. Land in urban areas is
owned by the state; land in rural areas and suburban areas is owned collectively by the
peasants, except for those which belong to the state under the law. Homestead and reserved
land and hilly land reserved for private use are collectively owned by peasants. Land
collectively owned by peasants which belongs to village peasants collectively in accordance
with the law shall be operated and managed by the village collective economic organization or
village committee.
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USE OF STATE-OWNED LAND
Pursuant to the Land Administration Law of the PRC and the Implementing Regulations
for the Land Administration Law of the PRC (ૢԷ),
which were last amended by the State Council on July 2, 2021 and implemented on September
1, 2021, and the Provisional Regulations of the PRC Concerning the Grant and Transfer of the
Right to Use State Land in Urban Areas (ᕄ਷ϞɺήԴ͜ᛆ̈ᜫձᔷᜫᅲ
БૢԷ), which was issued by the State Council on May 19, 1990 and implemented on the
same date, and was last amended on November 29, 2020 and implemented on the same date,
except for the allocation of state-owned land use rights within the scope prescribed by law, the
State implements a paid-use system for state-owned land in accordance with the law. The
methods of compensated use of state-owned land mainly include transfer of state-owned land
use rights, leasing of state-owned land, and using state-owned land use rights as a way of
capital contribution or investment in exchange for equity. Transfer of land use rights can be
conducted by means of agreement, tender, and auction. Transfer of land use rights requires the
signing of a land use right transfer contract and payment of land premium.
Contracting of Collectively Owned Land
Pursuant to the Rural Land Contracting Law of the PRC (ו
), which was issued by the NPCSC on August 29, 2002 and implemented on March 1,
2003, and last amended on December 29, 2018 and implemented on January 1, 2019, and the
Organic Law of Villagers’ Committees of the PRC (),
which was approved by the NPCSC on 4 November 1998 and implemented on the same date,
and last amended on December 29, 2018 and implemented on the same date, the State
implements a rural land contracting management system. Project establishment and contracting
plans involving the village’s land contracting management plan and the village collective
economic project can be conducted only upon approval by the villagers’ meeting after
deliberation.
Rural land contracting takes the form of household contracting within the rural collective
economic organization. For rural lands such as barren mountains, barren ditches, barren hills,
and barren swamplands that are not suitable for household contracting, such lands can be
contracted through tenders, auctions, and public negotiations, and on a pari passu basis,
members of the collective economic organization shall have right of first refusal to contracting
rural lands through the above-mentioned channels. Pursuant to the Regulations on the
Prevention and Control of Pollution from Large-scale Farming of Livestock and Poultry, the
State encourages the use of abandoned land and unused land such as barren mountains, barren
ditches, barren hills and barren swamplands to carry out large-scale and standardized livestock
and poultry breeding. Land for livestock and poultry breeding shall be managed as agricultural
land, and the land for production facilities and necessary pollution prevention and control and
other auxiliary facilities shall be designated in accordance with relevant regulations of the
State.
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The awarding party may contract out the rural land to entities or individuals other than
the collective economic organization with prior consent of more than two-thirds of the
members of the collective economic organization or more than two-thirds of the villager
representatives and shall report the contracting to and obtain approval from the people’s
government at the township level.
A written contract shall be signed by the awarding party and the contractor. The
contracting period is 30 years for arable land, 30 to 50 years for grassland, and 30 to 70 years
for woodland.
Circulation of Land Operation Rights
Pursuant to the Rural Land Contracting Law of the PRC, the contractor can independently
decide to circulate the land operation rights to others through leasing (subcontracting),
exchange for shares or by other means in accordance with the law, provided that the transfer
shall be filed with the awarding party. The circulation of land operation rights shall follow the
following principles: (1) it shall be lawful, voluntary, and compensated, and no organization or
individual may force or hinder the circulation of the land operation rights; (2) the nature of land
ownership and the agricultural use of land shall not be changed, and the comprehensive
agricultural production capacity and agricultural ecosystem concerned shall not be impaired;
(3) the circulation period shall not exceed the remaining period of the contract period; (4) the
transferee must have the ability or qualifications for agricultural operations; (5) on a pari passu
basis, members of the collective economic organization shall have right of first refusal.
Pursuant to the Measures for the Administration of Circulation of Rural Land Operation
Right (), which was issued by the MARA on January 26,
2021 and implemented on March 1, 2021, when effecting circulation of land operation rights,
the contractor shall negotiate with the transferee, sign a written circulation contract on agreed
terms, and shall file with the awarding party. After the expiration of the circulation period, the
transferee has the right to first renew the contract on a pari passu basis. The transferee is
prohibited from changing the agricultural use of the land.
Where the contractor voluntarily entrusts the awarding party, intermediary organization
or others to circulate its land operation rights, the contractor shall issue a letter of trust for the
circulation which shall specify the entrusted matter, authority and term and be signed or affixed
with official chop by the trustor and the trustee. The transferee of the circulation of land
operation rights shall be organisations and individuals with agricultural operation capabilities
or qualifications. Under the following circumstances, the contractor can unilaterally terminate
the land operation right circulation contract, and if the contractor fails to terminate the contract
within a reasonable period, the awarding party has the right to terminate the land operation
right circulation contract: (1) unauthorised change of the agricultural use of the land; (2)
farmland being deserted and left desolate for more than two consecutive years; (3) serious
damage being caused to the land or being inflicted on the ecosystem of the land; and (4) other
serious breaches of contract.
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Administration of Agricultural Facility Land
Pursuant to the Notice of the General Office of the Ministry of Natural Resources
on Issues Concerning the Guarantee of Land for Hog Farming (Zi Ran Zi Dian Fa [2019] No.
39) ((І್༟ཥ೯[2019]39 ໮)),
which was issued by the Ministry of Natural Resources on September 4, 2019 and implemented
on the same date, land for hog farming is regarded as agricultural facility land and shall be
managed as agricultural land, and is not subject to the approval procedures for construction
land. The scale of the land used for production facilities such as hog farming pens,
passageways in the sites and green isolation belts shall be determined according to the scale
of farming; the scale of supporting facilities have been increased and the 15-mu upper limit has
been cancelled to satisfy the demand for facility land including that for waste treatment in hog
farming.
Forest Rights and Forest Land Use
Pursuant to the Forest Law of the PRC, which was last amended by the NPCSC on
December 28, 2019 and came into effect on July 1, 2020, and the Implementing Regulations
for the Forest Law of the PRC (ૢԷ), which was last amended
and implemented by the State Council on March 19, 2018, the ownership and the right of use
of forest land and forest and forest trees thereon shall be registered and recorded by the
immovable property registration agency in a unified manner, and the certificates shall also be
issued. Anyone who violates the provisions of this regulation and infringes upon the lawful
rights and interests of owners or users of forests, trees or forest land shall bear the
responsibility for infringement of rights and interests in accordance with the law.
Pursuant to the Notice of the Office of the State Forestry and Grassland
Administration on Issues Related to the Use of Forest Land in Hog Farming (Ban Zi Zi [2019]
No. 163) ((፬༟ο[2019]163
໮)), where land appropriate to the forestation in the plan for the protection and utilization of
forest land to be used for hog farming, the farming enterprise (household) may sign a lease
contract with the rural collective economic organization, forest land contractor or business
unit, and file them with the competent forestry and grassland department at the county level,
and such land appropriate to the forestation shall be used according to the principle of not
changing the usage of the forest land and not occupying the forest land quota. After the hog
farming activities finish, farming enterprises (households) should restore forestry production
conditions in a timely manner.
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LA WS AND REGULATIONS ON INTELLECTUAL PROPERTY RIGHTS
Trademark
Trademarks are protected by the Trademark Law of the PRC ( ʕശɛ͏΍ձ਷ਠᅺ
), which was promulgated by the NPCSC on August 23, 1982, last amended on April 23,
2019 and came into effect on November 1, 2019, and the Implementing Regulations for
Trademark Law of the PRC (ૢԷ), which was promulgated by
the State Council on August 3, 2002, last amended on 29 April 2014 and came into effect on
May 1, 2014. The Trademark Office of the China National Intellectual Property Administration
is in charge of trademark registration and grants registered trademarks a validity term of 10
years which may be renewed for consecutive 10-year periods upon application by the owner
of the registered trademark.
Patent
Patent is protected by the Patent Law of the PRC (), which
was promulgated by the NPCSC on March 12, 1984, last amended on October 17, 2020 and
came into effect on June 1, 2021, and the Detailed Regulations on Implementing the Patent
Law of the PRC (), which was promulgated by the State
Council on June 15, 2001, last amended on 11 December 2023 and came into effect on January
20, 2024, the Patent Office of China National Intellectual Property Administration is
responsible for the patent work nationwide, and its counterparts at provincial level are
responsible for the administration of patents within their respective administrative regions. An
invention or utility model for which a patent is granted shall be novel, inventive and practically
applicable. The protection period is 20 years for an invention patent, 10 years for a utility
model patent, and 15 years for a design patent, commencing from their respective application
dates. Any entity or individual that intends to use a patent of another party shall enter into a
licensing agreement with the patent owner and pay patent royalties to the patent owner. Any
use of a patent without the permission of the patent owner constitutes an infringement of the
patent right.
Copyright Law
Pursuant to the Copyright Law of the PRC (), which was
promulgated by the NPCSC on September 7, 1990, last amended on November 11, 2020, and
came into effect on June 1, 2021 and the Regulations for the Implementation of the Copyright
Law of the PRC (ૢԷ) which was promulgated by the State
Council on August 2, 2002, last amended on January 30, 2013 and came into effect on March
1, 2013, works of Chinese citizens, legal entities or unincorporated organizations, whether
published or not, shall enjoy copyright.
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Pursuant to the Computer Software Protection Regulations (ᚐૢԷ),
which was last amended by the State Council on January 30, 2013 and came into effect on
March 1, 2013, works of Chinese citizens, legal entities or other organizations, whether
published or not, shall enjoy the copyright of the software developed by them in accordance
with the Computer Software Protection Regulations. Software copyright arises from the date
of completion of software development. The software copyright of a legal person or other
organization shall be protected for a period of 50 years, ending on December 31, of the 50th
year after the first publication of the software.
Domain Names
In accordance with the Measures for the Administration of Internet Domain Names ( ʝ
), which was promulgated by the Ministry of Industry and Information
Technology on August 24, 2017 and came into effect on November 1, 2017, the Ministry of
Industry and Information Technology is responsible for supervision and administration of
domain name services in the PRC. Communication administrative bureaus at provincial levels
shall conduct supervision and administration of the domain name services within their
respective administrative jurisdictions. Domain name registration services shall, in principle,
be subject to the principle of “first apply, first register”. A domain name registrar shall, in the
process of providing domain name registration services, ask the applicant for which the
registration is made to provide authentic, accurate and complete identity information on the
holder of the domain name and other domain name registration related information.
REGULATIONS ON LABOR PROTECTION AND SOCIAL INSURANCE
General Labor Contract Rules
Pursuant to the Labor Law of the PRC (), which was
promulgated by the NPCSC on July 5, 1994, last amended on December 29, 2018 and came into
effect on the same date, the Labor Contract Law of the PRC (),
which was promulgated by the NPCSC on June 29, 2007, last amended on December 28, 2012
and came into effect on July 1, 2013, and the Regulations on Implementing the Labor Contract
Law of the PRC (ૢԷ), which were promulgated by the
State Council on September 18, 2008 and came into effect on the same date, a written labor
contract shall be entered into to establish a labor relationship between an employer and his or
her employee. Wages may not be lower than the local standards of minimum wages. Employer
shall establish their respective system of occupational safety and sanitation, implement the
rules and standards issued or imposed by the State from time to time, provide education
regarding occupational safety and sanitation to their employees, provide their employees with
labor safety and sanitation conditions and necessary articles of labor protection supplies
conforming to the provisions of the State, and provide regular health examination for
employees engaged in work involving occupational hazards.
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Social Security and Housing Provident Fund
Pursuant to the Social Insurance Law of the PRC (),
which was promulgated on October 28, 2010, latest amended on December 29, 2018 and came
into effect on the same date, the employers shall register for social insurance at a local social
insurance agency and pay social insurance premiums for workers, including basic endowment
insurance premiums, basic medical insurance premiums, work-related injury insurance
premiums, unemployment insurance premiums and maternity insurance premiums. The
employers who fail to promptly contribute social security premiums in full amount shall be
ordered by the social security premium collection agency to make or supplement contributions
within a stipulated period, and shall be subject to a late payment fine computed from the due
date at the rate of 0.05% per day; where payment is not made within the stipulated period, the
relevant administrative authorities shall impose a fine ranging from one to three times the
amount of the amount in arrears.
On July 31, 2025, the PRC Supreme People’s Court promulgated the Interpretation II of
the Supreme People’s Court of Issues Concerning the Application of Law in the Trial of Labor
Dispute Cases (༆ᙑ(ɚ)), which
took effect on September 1, 2025. Article 19(1) thereof stipulates that if an employer and an
employee agree or the employee undertakes that there is no need to pay social insurance
contributions, the People’s Court shall determine that such agreement or undertaking is invalid.
Furthermore, where an employer fails to pay social insurance contributions in accordance with
the law, and the employee seeks to terminate the labor contract and claims economic
compensation from the employer pursuant to Article 38(3) of the PRC Labor Contract Law, the
People’s Court shall support such claims in accordance with the law.
Pursuant to the Regulations on Management of Housing Provident Fund (ږ
၍ଣૢԷ) (2019 Revision), which was issued by the State Council on April 3, 1999 and last
amended on March 24, 2019, the employers shall go through the housing provident fund
contribution registration with the housing provident fund management center, and apply for the
establishment of housing provident fund account for employees. The proportion of employee
and employer’s housing provident fund shall not be less than 5% of the employee’s monthly
average salary in the previous year. If an employer fails to pay or underpays the housing
provident fund by the due date, the housing provident fund management center shall order it
to pay within the time limit; if still failed within the time limit, it may apply to the people’s
court for enforcement.
On July 20, 2018, the General Office of the Communist Party of China and the General
Office of the PRC State Council jointly issued the Reform Plan of the State Tax and Local Tax
Collection Administration System (), under which, starting
from January 1, 2019, tax authorities are responsible for the collection of social insurance
contributions in China. Pursuant to the Notice on Conducting the Relevant Work Concerning
the Administration of Collection of Social Insurance Premiums in a Steady, Orderly and
Effective Manner (), which was issued
by the SA T in September 2018 and the Urgent Notice on Implementing the Spirit of the
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Executive Meeting of the PRC State Council in Stabilizing the Collection of Social Security
Contributions (ஷ
), which was issued by the General Office of the Ministry of Human Resources and Social
Security in September 2018, the local authorities are strictly prohibited to organize a
centralized collection of historical fees and charges owed by enterprises on its own. The Notice
on Implementing Measures to Further Support and Serve the Development of Private Economy
(), which was issued by the SA T
in November 2018, reiterates that the local authorities are strictly prohibited to organize a
centralized collection of arrears of payers including private enterprises in the previous years on
its own. The Notice on Issuing the Comprehensive Plan for the Reduction of Social Insurance
Premium Rate (), which was promulgated by
the General Office of the PRC State Council in April 2019, generally reduces the social
insurance contribution burden of enterprises, underlines that the duties for collection of social
insurances premium paid by the enterprises in any province shall not be transferred to tax
authorities until the condition of the province is mature, and re-emphasizes that local
authorities shall not conduct a centralized collection of historical fees and charges owed by
enterprises on its own.
REGULATIONS ON COMPANY ESTABLISHMENT AND FOREIGN INVESTMENT
The establishment, operation and management of corporate entities in China are governed
by the Company Law of the PRC () (the “ Company Law ”), which
was promulgated by the NPCSC in December 1993 and further amended in December 1999,
August 2004, October 2005, December 2013, October 2018 and December 2023, respectively.
The Company Law is also applicable to foreign-invested joint stock limited companies.
Investment activities in the PRC by foreign investors are governed by the Provisions on
Guiding Foreign Investment Direction (), which was promulgated
by the State Council in February 2002 and came into effect in April 2002, the Special
Administrative Measures for the Access of Foreign Investment (Negative List) (2024 V ersion)
(݄(૶ఊ)(2024و)) (the “ Negative List ”), which was
promulgated by the MOFCOM and the National Development and Reform Commission of the
PRC (the “ NDRC ”) in September 2024 and came into effect on November 1, 2024, and the
Catalogue of Industries for Encouraged Foreign Investment (2022 V ersion) ( ོᎸ̮ਠҳ༟ପ
ุͦ፽(2022و)) (the “ Encouraged Catalogue ”), which was promulgated by MOFCOM
and the NDRC in October 2022 and came into effect in January 2023. The Provisions on
Guiding Foreign Investment Direction divides foreign investment projects into four categories,
namely “encouraged,” “permitted,” “restricted” and “prohibited” categories. The Encouraged
Catalogue lists the foreign investment projects of the encouraged category, while the Negative
List sets out the foreign investment projects of the restricted and prohibited categories, and
foreign investment projects which fall outside the encouraged, restricted and prohibited
categories belong to the permitted category. The Negative List sets out the restrictive measures
in a unified manner, such as the requirements on shareholding percentages and corporate
governance, for the access of foreign investments, and the industries that are prohibited from
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receiving foreign investment. The Negative List covers 11 industries, and any field not falling
under the Negative List shall be administered under the principle of equal treatment to
domestic and foreign investment.
The Foreign Investment Law of the PRC () (the “ FIL”),
was promulgated by the NPC in March 2019 and came into effect on January 1, 2020. The Law
on Wholly Foreign-owned Enterprises of the PRC (), the Law
on Sino-foreign Equity Joint V entures of the PRC ()
and the Law on Sino-foreign Cooperative Joint V entures of the PRC ( ʕശɛ͏΍ձ਷ʕ̮
) were repealed upon the FIL coming into effect. The investment activities
of foreign natural persons, enterprises or other organizations (collectively, the “ foreign
investors ”) directly or indirectly within the territory of China shall comply with and be
governed by the FIL. Such activities include establishments by foreign investors of foreign
invested enterprises in China alone or jointly with other investors; acquisitions by foreign
investors of shares, equity, property shares, or other similar interests of Chinese domestic
enterprises; investments by foreign investors in new construction projects in China alone or
jointly with other investors; and other forms of investment prescribed by laws, administrative
regulations or the State Council.
While strengthening investment promotion and protection, the FIL further regulates
foreign investment management and proposes the establishment of a foreign investment
information reporting system that replaces the original foreign investment enterprise approval
and filing system of the MOFCOM. The foreign investment information reporting is applicable
to the Measures on Reporting of Foreign Investment Information ()
jointly developed by the MOFCOM and the SAMR, which came into effect on January 1, 2020.
Since January 1, 2020, for foreign investors carrying out investment activities directly or
indirectly in China, the foreign investors or foreign-invested enterprises shall submit
investment information to the relevant commerce administrative authorities in accordance with
the Measures on Reporting of Foreign Investment Information.
On December 19, 2020, the NDRC and MOFCOM promulgated the Measures on the
Security Review of Foreign Investment (), which came into effect
in January 18, 2021, setting forth provisions concerning the security review mechanism on
foreign investment, including the types of investments subject to review, the scopes of review
and procedures to review, among others.
REGULATIONS ON FOREIGN EXCHANGE AND DIVIDEND DISTRIBUTION
Foreign Exchange Control
The Regulations for the Foreign Exchange Administration of the PRC ( ʕശɛ͏΍ձ
਷̮ි၍ଣૢԷ), which were promulgated by the PRC State Council in January 1996 and
amended in January 1997 and August 2008, established the regulatory framework of the
administration on foreign currency exchange in China. Under the Regulations for the Foreign
Exchange Administration of the PRC, payments of current account items, such as trade,
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services, benefits or current transfer-related transactions in foreign currencies, in foreign
currency may be proceeded without prior approval from the State Administration of Foreign
Exchange of the PRC (the “ SAFE ”) as long as certain procedural requirements are complied
with. By contrast, approval from, or registration with, appropriate administrative authorities is
required where RMB is to be converted into foreign currency and remitted out of China for
items under the capital account such as repayment of foreign currency denominated loans or
foreign currency is to be remitted into China under the capital account, such as a capital
increase or foreign currency loans extended by an offshore entity to an entity in China.
The Provisions on the Administration of Foreign Exchange in Domestic Direct
Investments by Foreign Investors (), which were
promulgated by SAFE in May 2013 and amended in October 2018 and December 2019,
regulate and clarify the foreign exchange administration in foreign investors’ direct
investments, and provide that the administration by SAFE or its local branches over direct
investment by foreign investors in China shall be conducted by way of registration and banks
shall process foreign exchange business relating to the direct investment in China based on the
information recorded with the SAFE and its branches.
According to the Circular of the State Administration of Foreign Exchange on Further
Improving and Adjusting the Foreign Exchange Policies on Direct Investment (̮ි၍
) and its appendix promulgated in
November 2012 and amended in May 2015, October 2018 and December 2019 by the SAFE,
the foreign exchange procedures are further simplified: (1) the opening of and payment into
foreign exchange accounts under direct investment are no longer subject to approval by the
SAFE; (2) reinvestment with legal income of foreign investors in China is no longer subject
to approval by SAFE; (3) the procedures for capital verification and confirmation that
foreign-invested enterprises need to go through are simplified; (4) purchase and external
payment of foreign exchange under direct investment are no longer subject to approval by
SAFE; (5) domestic transfer of foreign exchange under direct investment is no longer subject
to approval by SAFE; and (6) the administration over the settlement of foreign exchange
capital of foreign-invested enterprises is improved. The SAFE issued the Circular on Further
Simplifying and Improving Foreign Exchange Administration Policies in Respect of Direct
Investment () in February 2015
which was further amended in December 2019, prescribed that the eligible banks instead of the
SAFE can directly handle foreign exchange registrations under foreign direct investment and
outbound investment while the SAFE and its branches indirectly supervise the foreign
exchange registration under foreign direct investment through the bank. On April 3, 2024, the
SAFE promulgated the Guidelines for the Foreign Exchange Business under the Capital
Accounts (2024 V ersion) (ˏ(2024و)), which became effective on
May 6, 2024, setting out the guidelines for the foreign exchange business under the capital
accounts.
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According to the Circular on the Reform of the Management Method for the Settlement
of Foreign Exchange Capital of Foreign-invested Enterprises (̮ਠҳ༟Άุ̮ි༟
) issued by the SAFE in March 2015 and amended in December
2019 and March 2023, and the Circular of the State Administration of Foreign Exchange on the
Reform and Standardization of the Management Policy of the Settlement of Capital Projects
() issued and implemented
by the SAFE on June 9, 2016 and revised in December 2023, discretionary settlement of
foreign exchange receipts under capital accounts refers to the case in which the foreign
exchange receipts under capital accounts (including foreign exchange capital, foreign debts,
and repatriated funds raised through overseas listing) subject to discretionary settlement as
expressly prescribed in the relevant policies may be settled with banks according to the actual
need of domestic institutions for business operations. The tentative percentage of discretionary
settlement of foreign exchange receipts under the capital account of domestic institutions is
100%, subject to the adjustment of the SAFE in due time based on international revenue
and expenditure situations. The Notice of the State Administration of Foreign Exchange on
Further Deepening Reforms to Promote the Convenience of Cross-border Trade and Investment
() promulgated and
implemented by the SAFE on December 4, 2023 further facilitates the payment and use of
funds raised by foreign-invested enterprises in their overseas listings. The asset realization
account of capital accounts to the settlement account of capital accounts was restructured. The
foreign exchange funds raised by domestic enterprises through overseas listing may be directly
remitted to the settlement account of capital accounts. Funds in the settlement account of
capital accounts may be settled and used at discretion.
According to the Circular on Optimizing Administration of Foreign Exchange to Support
the Development of Foreign-related Business (ஷ
) issued by the SAFE in April 2020, eligible enterprises are allowed to make domestic
payments by using their funds received by way of capital contribution, foreign debts and
overseas listing, with no need to provide the evidentiary materials concerning authenticity of
such payment item by item to banks in advance, provided that their capital use shall be
authentic and compliant, and conform with the prevailing administrative regulations on the use
of income under capital accounts. The bank concerned shall conduct ex post spot check and the
local branches of the SAFE shall strengthen monitoring analysis and interim and ex post
regulation in accordance with the relevant requirements.
On April 28, 2013, the SAFE issued the Administrative Measures for Registration of
Foreign Debts (), which came into effect on May 13, 2013, and revised
some of its contents in accordance with the Circular of the State Administration of Foreign
Exchange on the Repeal and Amendment of Relevant Normative Documents Regarding
the Reform of the Registered Capital Registration System (ҷ
). The Administrative Measures for
Registration of Foreign Debts stipulates that the debtor shall register or report the information
on the signing of contract, withdrawal, repayment and settlement and sale of foreign exchange
for foreign debts with and to the competent authority pursuant to the required method.
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According to the Notice of the State Administration of Foreign Exchange on Relevant
Issue Concerning the Administration of Foreign Exchange for Overseas Listing (̮ි၍
) issued by the SAFE on December 26, 2014, the
domestic companies shall register the overseas listing with the foreign exchange control bureau
located at its registered address in 15 working days after the completion of the overseas listing
and issuance. The funds raised by the domestic companies through overseas listing may be
repatriated to China or deposited overseas, provided that the intended use of the fund shall be
consistent with the contents of the offering documents and other public disclosure documents.
Dividend Distribution
According to the Company Law, the company shall allocate ten percent of profits to the
statutory reserve fund of the company when distributing its after-tax profits. Allocation to the
company’s statutory reserve fund may be waived once the cumulative amount of statutory
reserve fund is 50% or more of the company’s registered capital. Where the statutory reserve
fund of the company is not sufficient to cover the company’s loss for the previous year, the
profits for the current year shall be used to cover such loss before allocation is made to the
statutory reserve fund pursuant to the previous paragraph. After allocation to the statutory
reserve fund has been made from the after-tax profits of the company, allocation may be made
to discretionary reserve fund if a resolution is adopted at the general meeting. The remaining
after-tax profits of the company after making up losses and providing for reserve fund shall be
distributed by a joint stock company in accordance with the proportion of shares held by the
shareholders, unless otherwise provided in the company’s articles of association.
The SAFE issued the Notice on Improving the Check of Authenticity and Compliance to
Further Promote Foreign Exchange Administration Reform (ࠧ
) in January 2017, which stipulates several capital control
measures with respect to outbound remittance of profits from domestic entities to offshore
entities, including the following: (1) under the principle of genuine transaction, banks shall
check board resolutions regarding profit distribution, the original version of tax filing records
and audited financial statements for any remittance of profits of more than (excluding)
USD50,000; and (2) domestic entities shall hold income to account for previous years’ losses
before remitting the profits. Moreover, domestic entities shall make detailed explanations of
sources of capital and utilization arrangements, and provide board resolutions, contracts and
other authenticity proof when completing the registration and outward remittance procedures
in connection with an outbound investment.
REGULATIONS ON INFORMATION SECURITY AND DATA PROTECTION
Personal Information Protection
According to the Civil Code, the information of an individual shall be protected by the
law. Any organization or individual that needs to obtain personal information of others shall
obtain such information legally and ensure the safety of such information, and shall not
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illegally collect, use, process or transmit personal information of others, or illegally purchase
or sell, provide or publish personal information of others. In addition, the processing of
personal information shall follow the principles of lawfulness, appropriateness and necessity.
The Personal Information Protection Law of the PRC (ᚐ
) (the “ Personal Information Protection Law ”) promulgated by the NPCSC on August
20, 2021 and implemented on November 1, 2021, requires that the processing of personal
information should have a clear and reasonable purpose and should be limited to the minimum
scope necessary to achieve the processing purpose, adopt a method that has the least impact on
personal rights and interests, and shall not process personal information that is not related to
the processing purpose.
The Interpretations of the Supreme People’s Court and the Supreme
People’s Procuratorate on Several Issues Concerning the Application of Law in the Handling
of Criminal Cases Involving Infringement of Citizens’ Personal Information (ج
༆ᙑ) were
promulgated on May 8, 2017 and became effective on June 1, 2017. The interpretations clarify
several concepts regarding the crime of “infringement of citizens’ personal information”
stipulated by Article 253A of the Criminal Law of the PRC (),
including “citizens’ personal information”, “violation of relevant national provisions”,
“provision of citizens’ personal information” and “illegally obtaining any citizen’s personal
information by other methods”. In addition, the interpretations specify the standards for
determining “serious circumstances” and “extraordinary serious circumstances” of this crime.
Information Security and Censorship
On June 10, 2021, the NPCSC promulgated the Data Security Law of the PRC ( ʕശɛ
جthe “ Data Security Law ”), which came into effects on September 1,
2021. The Data Security Law sets forth the regulatory framework and the responsibilities of the
relevant administrative authorities in regulating data security. It provides that the central
national security leadership organ shall establish a national data security work liaison system,
which shall coordinate the relevant authorities to formulate the catalogues of key data, and the
special measures that shall be taken to protect the security of the key data.
On November 7, 2016, the NPCSC promulgated the Cybersecurity Law of the PRC ( ʕ
) (the “ Cybersecurity Law ”), which became effect on June 1,
2017, pursuant to which any network operator shall fulfill their obligations to ensure the
security of the network when conducting business and providing services. Those who provide
services through networks shall take technical measures and other necessary measures in
accordance with laws, administrative regulations and compulsory national requirements to
safeguard the safe and stable operation of the networks, respond to network security incidents
effectively, prevent illegal and criminal activities committed on the network, and maintain the
integrity, confidentiality, and availability of network data. The network operators shall neither
collect the personal information irrelevant to the services provided by them nor collect or use
the personal information in violation of the provisions of any law or the agreement between
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both parties. Personal information and important data collected and generated by operators of
critical information infrastructures within the PRC should be stored within the PRC. The
purchase of network products and services that may affect national security shall be subject to
national cyber security review.
On July 30, 2021, the PRC State Council promulgated the Regulations on the Protection
of the Security of Critical Information Infrastructure (ᚐૢԷ),
which became effective on September 1, 2021. According to the Regulations on the Protection
of the Security of Critical Information Infrastructure, a “critical information infrastructure”
refers to an important network facility and information system in important industries such as,
among others, public communications and information services, as well as other important
network facilities and information systems that may seriously endanger national security, the
national economy, the people’s livelihood, or the public interests in the event of damage, loss
of function, or data leakage.
On December 28, 2021, the Cyberspace Administration of China (the “ CAC”) and other
twelve administration authorities jointly promulgated the Measures for Cybersecurity Review
(), which came into effect on February 15, 2022. According to the
Measures for Cybersecurity Review, when the purchase of network products and services by
a critical information infrastructures operator or the data processing activities conducted by a
network platform operator affect or may affect national security, a cybersecurity review shall
be conducted pursuant to the Measures for Cybersecurity Review. In addition, an application
for cybersecurity review shall be made by an issuer who is a network platform operator holding
personal information of more than one million users before such issuer applies to list its
securities abroad. The relevant competent authorities may initiate cybersecurity review if such
competent authorities determine that the issuer’s network products or services, or data
processing activities affect or may affect national security.
On July 7, 2022, the CAC promulgated the Cross-border Data Transfer Security
Assessment Measures (), which became effective on September 1,
2022. The Cross-border Data Transfer Security Assessment Measures provide that, a data
processor shall apply to competent authorities for security assessment prior to transferring any
data abroad if the transfer involves (1) the data processors transferring important data abroad;
(2) a critical information infrastructure operator or a personal information processor that has
processed personal information of more than one million people, transferring personal
information abroad; (3) a data processor who has provided personal information of 100,000
individuals or sensitive personal information of 10,000 individuals abroad, in each case as
calculated cumulatively, since January 1 of the last year, transferring personal information
abroad; and (4) other circumstances where the security assessment of data cross-border transfer
is required as prescribed by the CAC. In addition, on February 22, 2023, the Provisions on the
Prescribed Agreement on Cross-border Data Transfer of Personal Information (̈
) (the “ Provisions on Prescribed Agreement ”) was promulgated by the
CAC, which took effect on June 1, 2023. The Provisions on Prescribed Agreement attach the
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prescribed template for cross-border data transfer agreement that could be used as an available
option to satisfy the condition for cross-border transfer of personal information under Article
38 of the Personal Information Protection Law.
According to the Regulations on Promoting and Regulating Cross-Border Data Flows
() which was issued by CAC and effective on March 22,
2024, a data handler that is not a critical information infrastructure operator, will be exempted
from declaring for security assessment for outbound data transfer, signing a standard contract
with overseas recipient or passing the personal protection certification, if such data handler
accumulatively transfers overseas ordinary personal information of less than 100,000
individuals since the January 1 of the current year.
In September 2024, the State Council released the Network Data Security Management
Regulation ( ၣഖᅰኽτΌ၍ଣૢԷ), which shall come into force on January 1, 2025. The
Network Data Security Management Regulation is not only the first at the administrative
regulation level specifically for network data security, but it also serves as a comprehensive
implementing regulation for the compliance requirements set out by the Cybersecurity Law,
Data Security Law, and Personal Information Protection Law. The Network Data Security
Management Regulation introduces several key obligations, including requiring network data
handlers to specify the purpose and method of personal information processing, as well as the
types of personal information involved, before any personal information is handled. It also
clarifies definitions for important data, outlines the obligations of those handling important
data, establishes broader contractual requirements for data sharing between data handlers, and
introduces a new exemption for regulatory obligations regarding cross-border data transfers.
MAJOR TAXATION OF OUR COMPANY IN THE PRC
Enterprise Income Tax
According to the Enterprise Income Tax Law of the PRC (੻೼
) promulgated by the NPC on March 16, 2007, and lastly amended by NPCSC and
effective on December 29, 2018 and the Implementing Regulations for the Enterprise Income
Tax Law of the PRC (ૢԷ) promulgated by the State
Council on December 6, 2007 and lastly amended on December 6, 2024 and effective on
January 20, 2025, enterprises are divided into resident enterprises and non-resident enterprises.
Chinese resident enterprises are required to pay enterprise income tax at a rate of 25%.
Enterprises engaged in the breeding of livestock and poultry and the primary processing of
agricultural products are exempt from enterprise income tax. Enterprises that qualify as
“high-tech enterprises” enjoy a reduced enterprise income tax rate of 15%.
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Value-added tax
According to the Interim Regulations on V alue-added Tax of the PRC ( ʕശɛ͏΍ձ
೼ᅲБૢԷ) which was promulgated by the State Council on December 13, 1993,
lastly amended and implemented on November 19, 2017, the Notice on Adjusting V alue-added
Tax Rates () which was promulgated
by the MOF and the SA T on April 4, 2018, and became effective as of May 1, 2018, and
Announcement on Relevant Policies for Deepening V alue-added Tax (the “ VAT”) Reform
(ʮѓ) which was promulgated by the MOF, the SA T and
the GACC on March 20, 2019 and became effective on April 1, 2019, as a general taxpayer,
the company is subject to V A T rates of 13%, 9%, 6% and 0% depending on its business. Among
them, the self-produced agricultural products sold by agricultural producers are exempt from
VAT.
According to the Notice relating to the Exemption of V alue-Added Tax on Feedstock
Products () which was issued
by the MOF and the SA T on July 12, 2001 and implemented on August 1, 2001, single bulk
feed, mixed feed, compound feed, compound premix and concentrated feed products are
exempt from value-added tax.
On December 25, 2024, the NPCSC promulgated the V alue-added Tax Law of the PRC
(), which will take effect on January 1, 2026, with the
simultaneous repeal of the Interim Regulations on V alue-added Tax of the PRC.
Real Estate Tax
Pursuant to the Interim Regulations on Real Estate Tax of the PRC (ג
ପ೼ᅲБૢԷ) promulgated by the State Council on September 15, 1986 and lastly amend
on January 8, 2011, real estate tax will be levied in cities, county towns, designated townships
and industrial and mining areas, which is payable by the title owner of the property. The real
estate tax will be calculated on the residual value of the property at a rate of 1.2%, or on the
rental income from the property at a rate of 12%.
Pursuant to the Decision of the NPCSC on Authorizing the State Council to Launch a
Pilot Reform of Real Estate Tax in Certain Regions (બᛆ
) (hereinafter referred to as the
“Decision on the Pilot Reform of Real Estate Tax ”) promulgated by the NPCSC on October
23, 2021 and became effective on the same date, the State Council is authorized to pilot real
estate tax reforms in certain regions. Real estate tax shall be levied on all types of residential
and non-residential property in pilot areas, excluding lawfully owned rural homesteads and
houses built on them. Taxpayers of the real estate tax are the holders of land-use rights and
house owners. Non-residential property shall be governed by Interim Regulations of the PRC
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on Real Estate Tax and Interim Regulations of the PRC on Urban and Town Land Use Tax
(ᕄɺήԴ͜೼ᅲБૢԷ). The period for the Decision on Pilot Reform
of Property Tax will be five years from the date on which the State Council promulgates pilot
measures.
Urban Maintenance and Construction Tax
According to the Urban Maintenance and Construction Tax Law of the PRC ( ʕശɛ͏
) which was promulgated by the NPCSC on August 11, 2020 and
came into effect on September 1, 2021, all units and individuals that pay V A T and consumption
tax are all taxpayers who pay taxes on urban maintenance and construction. They shall pay the
urban maintenance and construction tax according to the regulations. The computation of urban
maintenance and construction tax shall be based on the amount of V A T and consumption tax
actually paid by taxpayers. The urban maintenance and construction tax shall be calculated
based on the amount of V A T refunded after deducting the residual tax refund at the end of the
period as required. If the location of the taxpayer is in the urban area, the tax rate of urban
maintenance and construction shall be 7%; if the location of the taxpayer is in the county or
town, the tax rate of urban maintenance and construction shall be 5%; if the location of the
taxpayer is not in the urban area, the county or town, the tax rate of urban maintenance and
construction shall be 1%.
LA WS AND REGULATIONS ON ANTI-UNFAIR COMPETITION
According to the Anti-unfair Competition Law of the PRC ( ʕശɛ͏΍ձ਷ˀʔ͍຅
) (the “ Anti-unfair Competition Law ”), lastly amended by the NPCSC on June 27,
2025 and effective on October 15, 2025, operators shall comply with the principle of
voluntariness, equality, impartiality, integrity and abide by laws and business ethics in
production and business activities. Under the Anti-unfair Competition Law, unfair competition
refers to the circumstance that an operator disrupts the market competition order and damages
the legitimate rights and interests of other operators or consumers in violation of the provisions
of the Anti-unfair Competition Law in the production and operating activities. Operators who
violate the provisions of Anti-unfair Competition Law shall bear corresponding civil,
administrative or criminal responsibilities depending on the specific circumstances.
According to the Anti-Monopoly Law of the PRC () (the
“Anti-Monopoly Law ”), lastly amended by NPCSC on June 24, 2022, the Anti-Monopoly Law
applies to the monopolistic practices in domestic economic activities in the PRC as well as the
monopolistic practices outside the PRC which have exclusion or restriction effects on domestic
market competitions. The monopolistic practices under the Anti-Monopoly Law include any
monopoly agreement reached by any operators, abuse of market-dominating position by any
operators and any concentration of operators which has eliminated or limited or may eliminate
or limit the market competition. The anti-monopoly law enforcement agencies designated by
the State Council are responsible for enforcement of the Anti-Monopoly Law in accordance
with the provisions of the Anti-Monopoly Law. The anti-monopoly law enforcement agencies
of the State Council may, according to the needs of their work, authorize the corresponding
REGULATORY OVERVIEW
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agencies of the people’s governments of provinces, autonomous regions, and municipalities to
be responsible for enforcement of the Anti-Monopoly Law. Operators who violate the
provisions of the Anti-Monopoly Law may be subject to fines, confiscation of illegal gains, or
order to cease illegal activities by the anti-monopoly law enforcement agencies.
LA WS AND REGULATIONS RELATED TO OVERSEAS LISTING
Overseas Securities Offering and Listing by Domestic Enterprises
On February 17, 2023, the China Securities Regulatory Commission (the “ CSRC ”)
released the Trial Administrative Measures of Overseas Securities Offering and Listing by
Domestic Companies () and five supporting
guidelines (together, the “ Trial Measures ”), which came into effect on March 31, 2023. If a
domestic company seeks to offer and list overseas securities, the issuer shall file with the
CSRC in accordance with the Trial Measures.
The Trial Measures, comprehensively improve and reform the regulatory regime for
overseas offering and listing of PRC domestic companies’ securities, and regulate both direct
and indirect overseas offering and listing of PRC domestic companies’ securities by adopting
a filing-based regulatory regime. The Trial Measures provide that no overseas offering and
listing shall be made under any of the following circumstances: (1) such securities offering and
listing is explicitly prohibited by provisions in laws, administrative regulations and relevant
state rules; (2) the intended securities offering and listing may endanger national security as
reviewed and determined by competent authorities under the State Council in accordance with
law; (3) the PRC domestic company intending to make the securities offering and listing, or
its controlling shareholder and the actual controller, have committed corruption, bribery,
embezzlement, misappropriation of property or crimes undermining the order of the socialist
market economy during the latest three years; (4) the PRC domestic company intending to
make the securities offering and listing is currently under investigations for suspicion of
criminal offenses or major violations of laws and regulations, and no conclusion has yet been
made thereof; or (5) there are material ownership disputes over equity held by the PRC
domestic company’s controlling shareholder or by other shareholders that are controlled by the
controlling shareholder and/or actual controller.
According to the Trial Measures, PRC domestic companies that seek to offer and list
securities in overseas markets, either in direct or indirect means, are required to fulfil the filing
procedure with the CSRC within three working days after submitting the listing application
documents to the overseas supervisory authorities, and report relevant information. In addition,
subsequent securities offerings of an issuer in the same overseas market where it has previously
offered and listed securities or subsequent securities offerings and listings of an issuer in other
overseas markets than where it has offered and listed shall fulfil the filing procedure with the
CSRC under the Trial Measures. In the event of the occurrence of any of the following material
events, the issuer shall make a detailed report to the CSRC within three working days after the
occurrence and public announcement of the relevant event: (1) change in controlling rights; (2)
being subject to investigation, punishment or other measures by overseas securities regulatory
REGULATORY OVERVIEW
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authorities or the relevant authorities; (3) changing listing status or changing the listing board;
(4) voluntary or compulsory termination of listing. Besides, if any material change in the
principal business and operation of the issuer after its overseas offering and listing makes the
issuer no longer within the scope of record-filing, the issuer shall submit a special report and
a legal opinion issued by a PRC domestic law firm to the CSRC within three working days after
the occurrence of the relevant change to provide an explanation of the relevant situation.
CSRC Requirements on Confidentiality and Archives Administration for Overseas
Offering and Listing
On February 24, 2023, the CSRC, MOF, National Administration of State Secrets
Protection and National Archives Administration jointly promulgated the Provisions on
Strengthening Confidentiality and Archives Administration of Overseas Securities Offering
and Listing by Domestic Companies (੗ձᏦ
) (the “ Archives Administration Provisions ”), which took effect on
March 31, 2023. According to the Archives Administration Provisions, the domestic company
shall establish a solid confidentiality and archives administration system. If a domestic
company decides to disclose any documents or materials containing state secrets, work secrets
of state authorities or any information that may be detrimental to national security or public
interest once leaked, proper governmental approval procedures should be followed. After
obtaining the government clearance, the domestic company disclosing such information, as one
party, and the securities companies and securities services providers receiving such
information, as the other party, shall also enter into non-disclosure agreements, setting forth the
confidentiality obligations of the securities companies and securities services providers. When
providing the above information to the securities companies and securities services providers
retained by it, the domestic company are also required to issue a written statement outlining
its compliance with the relevant regulatory requirements and procedures.
If the domestic company provides accounting archives or copies thereof to any other
entities or persons (such as securities companies, securities services providers and overseas
regulators), it shall follow the relevant procedures in accordance with relevant national
regulations. Any violation of the above regulations may subject the domestic company to
regulatory penalties under the Safeguarding State Secrets Law of the PRC ( ʕശɛ͏΍ձ਷
) and the Archives Law of the PRC () and even
criminal liabilities to the extent applicable.
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OVERVIEW
The history of our Company can be traced back to 1995 when Mr. Qin Yinglin established
Neixiang County Mashan Hog Farm ( ʫඊጤ৵ʆቮሥఙ). On July 13, 2000, our Company,
then was Neixiang County Muyuan Breeding Co., Ltd. (ʮ̡,“ Muyuan
Breeding ”), was founded by Mr. Qin Yinglin and Mr. Qian Y unpeng. Since then, we have
developed and grown into a leading pork company with over 30 years of deep-rooted expertise
in the hog farming industry.
Since January 28, 2014, our Company has been listed on the Shenzhen Stock Exchange
under the stock code 002714. As of the Latest Practicable Date, we had a total of 5,462,771,266
A Shares in issue, of which approximately 54.91% was held by Mr. Qin Yinglin, Ms. Qian Ying
and Muyuan Group, our Controlling Shareholders Group.
KEY DEVELOPMENT MILESTONES
The following table sets out a summary of our Group’s key development milestones:
Y ear Milestone
1995 /H1118/H1118/H1118/H1118/H1118Neixiang County Mashan Hog Farm was established.
Our initial hog farm took shape, with over 200 sows and more than 2,000
piglets.
2000 /H1118/H1118/H1118/H1118/H1118Muyuan Breeding was established.
2002 /H1118/H1118/H1118/H1118/H1118The sales volume of our hogs reached 22 thousand heads and we pioneered
the two-breed rotational cross system.
2008 /H1118/H1118/H1118/H1118/H1118The sales volume of our hogs reached 220 thousand heads and we applied
the integrated “crop-livestock cycle” system in our operations.
2010 /H1118/H1118/H1118/H1118/H1118We became one of the “Export Food and Agricultural Product Quality and
Safety Demonstration Zones” in Henan Province.
2013 /H1118/H1118/H1118/H1118/H1118The sales volume of our hogs reached one million heads and we were
honored as “Outstanding Leading Enterprise in Agricultural Industry of
Henan Province.”
2014 /H1118/H1118/H1118/H1118/H1118Our A Shares were listed on the Shenzhen Stock Exchange (stock code:
002714).
HISTORY, DEVELOPMENT AND CORPORATE STRUCTURE
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Y ear Milestone
2018 /H1118/H1118/H1118/H1118/H1118The sales volume of our hogs reached 11 million heads and our stock was
included in Shenzhen 100 Index.
2019 /H1118/H1118/H1118/H1118/H1118We expanded our business to the hog slaughtering and processing industry.
2021 /H1118/H1118/H1118/H1118/H1118We established a platform dedicated to big data-related research and
development, accelerating our smart hog farming innovations.
The sales volume of our hogs reached 40 million heads, ranking first in the
hog farming industry.
2024 /H1118/H1118/H1118/H1118/H1118We commercialized ammonia reduction and deodorization solutions for
livestock farming, which were promoted by the PRC Ministry of Ecology
and Environment.
2025 /H1118/H1118/H1118/H1118/H1118We expanded our business into Vietnam by establishing Muyuan Vietnam
Company Limited.
OUR MAJOR SUBSIDIARIES
As of the Latest Practicable Date, we conducted our business operations through 320
subsidiaries. The following table sets forth the principal activities and the date and place of
incorporation/establishment in respect of each of our Major Subsidiaries as of the Latest
Practicable Date:
No. Name of major subsidiary
Date of
establishment
Place of
establishment
Principal
activities
1. /H1118/H1118/H1118Nanyang Wolong Muyuan
Breeding Co., Ltd. (ජ
ʮ̡)
December 30,
2010
PRC Livestock and
poultry
breeding
2. /H1118/H1118/H1118Dengzhou Muyuan Breeding
Co., Ltd. (ቮ
ʮ̡)
December 30,
2010
PRC Livestock and
poultry
breeding
3. /H1118/H1118/H1118Hubei Zhongxiang Muyuan
Breeding Co., Ltd. ( ಳ̏
ʮ̡)
September 24,
2012
PRC Livestock and
poultry
breeding
4. /H1118/H1118/H1118Tanghe Muyuan Livestock
Husbandry Co., Ltd.
(ʮ̡)
April 17, 2014 PRC Livestock and
poultry
breeding
5. /H1118/H1118/H1118Fugou Muyuan Livestock
Husbandry Co., Ltd.
(ʮ̡)
April 22, 2014 PRC Livestock and
poultry
breeding
HISTORY, DEVELOPMENT AND CORPORATE STRUCTURE
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No. Name of major subsidiary
Date of
establishment
Place of
establishment
Principal
activities
6. /H1118/H1118/H1118Huaxian Muyuan Livestock
Husbandry Co., Ltd.
(ʮ̡)
September 3,
2014
PRC Livestock and
poultry
breeding
7. /H1118/H1118/H1118Zhengyang Muyuan
Livestock Husbandry Co.,
Ltd. (ʮ
̡)
November 21,
2014
PRC Livestock and
poultry
breeding
8. /H1118/H1118/H1118Taikang Muyuan Livestock
Husbandry Co., Ltd.
(ʮ̡)
December 25,
2015
PRC Livestock and
poultry
breeding
9. /H1118/H1118/H1118Inner Mongolia Kailu
Muyuan Livestock
Husbandry Co., Ltd.
(ࠢ
ʮ̡)
July 26, 2016 PRC Livestock and
poultry
breeding
10. /H1118/H1118Laohekou Muyuan
Livestock Husbandry Co.,
Ltd. (ࠢ
ʮ̡)
September 6,
2016
PRC Livestock and
poultry
breeding
11. /H1118/H1118Anhui Yingshang Muyuan
Livestock Husbandry Co.,
Ltd. (Ϟ
ʮ̡)
September 9,
2016
PRC Livestock and
poultry
breeding
12. /H1118/H1118Henan Muyuan Grain Trade
Co., Ltd. (࠮
ʮ̡)
July 21, 2017 PRC Grain purchase
and trade
13. /H1118/H1118Muyuan Meat Co., Ltd. (ى
ʮ̡)
March 6, 2019 PRC Slaughter
processing
14. /H1118/H1118Fugou Muhua Animal
Husbandry Industry
Development Co., Ltd.
(Ϟ
ʮ̡)
December 31,
2019
PRC Livestock and
poultry
breeding
15. /H1118/H1118Nanjing Jiangning Muyuan
Livestock Husbandry Co.,
Ltd. (ى
ʮ̡)
May 7, 2020 PRC Livestock and
poultry
breeding
16. /H1118/H1118
Qixian Muyuan Livestock
Husbandry Co., Ltd. ( Ӄ
ʮ̡)
November 20,
2014
PRC Livestock and
poultry
breeding
HISTORY, DEVELOPMENT AND CORPORATE STRUCTURE
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No. Name of major subsidiary
Date of
establishment
Place of
establishment
Principal
activities
17. /H1118/H1118Sheqi Muyuan Livestock
Husbandry Co., Ltd. (ٟ
ʮ̡)
July 24, 2015 PRC Livestock and
poultry
breeding
18. /H1118/H1118Shangshui Muyuan
Livestock Husbandry Co.,
Ltd. (ʮ
̡)
December 25,
2015
PRC Livestock and
poultry
breeding
19. /H1118/H1118Liaoning Tieling Muyuan
Livestock Husbandry Co.,
Ltd. (Ϟ
ʮ̡)
September 5,
2016
PRC Livestock and
poultry
breeding
20. /H1118/H1118Ningling Muyuan Livestock
Husbandry Co., Ltd. ( ྐྵ
ʮ̡)
February 16,
2017
PRC Livestock and
poultry
breeding
21. /H1118/H1118Mengcheng Muyuan
Livestock Husbandry Co.,
Ltd. (ʮ
̡)
April 28, 2017 PRC Livestock and
poultry
breeding
22. /H1118/H1118Xiping Muyuan Livestock
Husbandry Co., Ltd. ( Г
ʮ̡)
May 15, 2017 PRC Livestock and
poultry
breeding
23. /H1118/H1118Anhui Fengtai Muyuan
Livestock Husbandry Co.,
Ltd. (Ϟ
ʮ̡)
June 1, 2017 PRC Livestock and
poultry
breeding
24. /H1118/H1118Shandong Dongming
Muyuan Livestock
Husbandry Co., Ltd. ( ʆ
ʮ̡)
June 5, 2017 PRC Livestock and
poultry
breeding
25. /H1118/H1118Shangcai Muyuan Livestock
Husbandry Co., Ltd. ( ɪ
ʮ̡)
June 6, 2017 PRC Livestock and
poultry
breeding
26. /H1118/H1118Anhui Suixi Muyuan
Livestock Husbandry Co.,
Ltd. (Ϟ
ʮ̡)
June 12, 2017 PRC Livestock and
poultry
breeding
27. /H1118/H1118Luyi Muyuan Livestock
Husbandry Co., Ltd. ( ௤
ʮ̡)
September 12,
2017
PRC Livestock and
poultry
breeding
28. /H1118/H1118Zhengyang Muyuan Meat
Co., Ltd. (࠮
ʮ̡)
May 21, 2019 PRC Slaughter
processing
HISTORY, DEVELOPMENT AND CORPORATE STRUCTURE
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No. Name of major subsidiary
Date of
establishment
Place of
establishment
Principal
activities
29. /H1118/H1118Shangshui Muyuan Meat
Co., Ltd. (Ђ
ʮ̡)
October 11,
2019
PRC Slaughter
processing
30. /H1118/H1118Nanyang Muhua Animal
Husbandry Industry
Development Co., Ltd.
(࢝
ʮ̡)
November 26,
2019
PRC Livestock and
poultry
breeding
31. /H1118/H1118Huaxian Muhua Animal
Husbandry Industry
Development Co., Ltd.
(Ϟ
ʮ̡)
December 10,
2019
PRC Livestock and
poultry
breeding
32. /H1118/H1118Huaibei Muhua Animal
Husbandry Industry
Development Co., Ltd.
(ุପุ೯
ʮ̡)
Note
December 10,
2019
PRC Livestock and
poultry
breeding
33. /H1118/H1118Ningling Muhua Animal
Husbandry Industry
Development Co., Ltd.
(Ϟ
ʮ̡)
December 31,
2019
PRC Livestock and
poultry
breeding
34. /H1118/H1118Neixiang Muyuan Modern
Agricultural Complex
Co., Ltd. (ତ
ʮ̡)
March 30,
2020
PRC Livestock and
poultry
breeding
35. /H1118/H1118Ningling Muyuan Meat Co.,
Ltd. (Ϟ
ʮ̡)
April 30, 2020 PRC Slaughter
processing
36. /H1118/H1118Neihuang Muyuan
Livestock Husbandry Co.,
Ltd. (ࠢ
ʮ̡)
May 15, 2020 PRC Livestock and
poultry
breeding
37. /H1118/H1118Yingshang Muyuan Meat
Co., Ltd. (࠮
ʮ̡)
June 18, 2020 PRC Slaughter
processing
38. /H1118/H1118Henan Muyuan Hog
Breeding Co., Ltd. (یئ
ʮ̡)
January 22,
2021
PRC Livestock and
poultry
breeding
HISTORY, DEVELOPMENT AND CORPORATE STRUCTURE
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No. Name of major subsidiary
Date of
establishment
Place of
establishment
Principal
activities
39. /H1118Shandong Huimin Muyuan
Livestock Husbandry Co.,
Ltd. (Ϟ
ʮ̡)
October 16,
2019
PRC Livestock and
poultry
breeding
40. /H1118/H1118Caoxian Muyuan Meat Co.,
Ltd. (ࠢ
ʮ̡)
April 29, 2020 PRC Slaughter
processing
41. /H1118/H1118Chaohu Muyuan Livestock
Husbandry Co., Ltd. ( ੫
ʮ̡)
July 24, 2020 PRC Livestock and
poultry
breeding
42. /H1118/H1118Henan Muyuan Science and
Technology Co., Ltd. (ئ
ʮ̡)
October 30,
2020
PRC Grain purchase
and trade
and Feed
Production
43. /H1118/H1118Tongyu Muyuan Meat Food
Co., Ltd. (࠮
ʮ̡)
March 16,
2020
PRC Slaughter
processing
44. /H1118/H1118Tieling Muyuan Meat Food
Co., Ltd. (࠮
ʮ̡)
March 16,
2020
PRC Slaughter
processing
45. /H1118/H1118Naimanqi Muyuan Meat
Food Production Co., Ltd
(͛ପϞ
ʮ̡)
March 31,
2020
PRC Slaughter
processing
46. /H1118/H1118Lindian County Muyuan
Meat Food Co., Ltd. (؍
ʮ̡)
May 6, 2020 PRC Slaughter
processing
Note: Due to intra-Group restructuring to reduce subsidiary levels within our Group and optimize our Group’s
resource allocation to improve overall operation efficiency, we are in the process of reorganizing and
deregistering Huaibei Muhua Animal Husbandry Industry Development Co., Ltd. (ุପ
ʮ̡).
The Company held entire or majority equity interests in the above Major Subsidiaries
throughout the Track Record Period.
See “Appendix VI. Statutory and General Information — 1. Further Information about
Our Company — C. Changes in Share Capital of our Major Subsidiaries” for more details on
share capital changes of the Major Subsidiaries.
HISTORY, DEVELOPMENT AND CORPORATE STRUCTURE
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MAJOR SHAREHOLDING CHANGES OF OUR COMPANY
Our Founder and Early Development
Muyuan Breeding was founded on July 13, 2000 in Neixiang County, Nanyang City,
Henan Province as a limited liability company jointly invested by Mr. Qin Yinglin and Mr.
Qian Y unpeng. Mr. Qian Y unpeng is the older brother of Ms. Qian Ying, and thus is a connected
person to the Company. The Company was renamed Henan Neixiang Muyuan Breeding Co.,
Ltd. (ʮ̡) on May 13, 2002.
The initial registered capital of RMB9.8 million was contributed by Mr. Qin Yinglin
(94.9%) through the assets of Neixiang County Mashan Hog Farm ( ʫඊጤ৵ʆቮሥఙ) and Mr.
Qian Y unpeng (5.1%) through in-kind contributions.
Our Company underwent several capital increases, including a capital increase to
RMB10.2 million after Mr. Qin Yinglin’s cash injection of RMB400,000 in March 2003, and
a capital increase to RMB25.8 million through undistributed profit conversion in December
2005.
In December 2005, Mr. Qian Y unpeng transferred 2.96% of the equity interest held by him
in our Company to Mr. Qin Yinglin, resulting in Mr. Qin Yinglin holding 98.06% and Mr. Qian
Y unpeng holding 1.94% equity interest in our Company as of December 19, 2005.
In September 2009, Muyuan Group and Mr. Qian Y unpeng injected RMB9,021,705.43
and RMB178,294.57, respectively, into the capital of our Company, to increase our registered
capital to RMB35 million. As of September 29, 2009, Mr. Qin Yinglin, Muyuan Group and Mr.
Qian Y unpeng held 72.29%, 25.77% and 1.94% equity interest in our Company, respectively.
Conversion into Joint Stock Limited Company
In October 2009, 25 individuals altogether injected RMB11.45 million into our Company,
increasing our total registered capital to RMB36,683,823.53, and subsequently on December
28, 2009, after approval by the then shareholders, we were restructured into a joint-stock
company, Henan Muyuan Foods Co., Ltd. (΅ʮ̡), which was subsequently
renamed to our current name, Muyuan Foods Co., Ltd. (ʮ̡) on February
4, 2010. Following this conversion, we became a joint-stock company with RMB200 million
HISTORY, DEVELOPMENT AND CORPORATE STRUCTURE
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--- page 185 ---
registered capital. As of December 28, 2009, the shareholding structure of our Company was
as below:
Name of Shareholder (1) Number of Shares
Percentage of
Shareholding
(%)
Qin Yinglin (؍ߵ)H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118137,935,458 68.97
Muyuan Group /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111849,186,287 24.59
Qian Ying ( ፺຃) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184,008,819 2.00
Qian Y unpeng ( ፺༶ᘄ) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,698,058 1.85
Y ang Ruihua ( เ๿ശ) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118481,059 0.24
Cao Zhinian (ϋ) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118481,059 0.24
Su Danglin (؍)H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118481,059 0.24
Li Fuqiang ( ҽ˹੶) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118481,059 0.24
Qin Yingfan (ɭ) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118320,706 0.16
Qin Yingze (ዣ) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118280,617 0.14
Xue Y uzhen (ࣈ)H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118160,353 0.08
Qian Xiaopeng ( ፺ʃᘄ) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118160,353 0.08
Xu Y umei (͗ૠ) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111880,176 0.04
Qin Yinghui (ึ) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111880,176 0.04
Qin Yinghe (ஃ) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111880,176 0.04
Other 13 individual Independent Third Parties /H1118/H1118/H1118/H11182,084,585 1.04
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118200,000,000 100.00
Note 1: Y ang Ruihua is an Executive Director and the spouse of Cao Zhinian; Cao Zhinian is an Executive
Director and a cousin of Qian Ying, a Non-executive Director; Su Danglin is a Non-executive
Director; Qin Yingfan was the brother of Qin Yinglin; Qin Yingze is the brother of Qin Yinglin; Xue
Y uzhen is the spouse of the sister of Qian Ying; Qian Xiaopeng is the brother of Qian Ying; Xu Y umei
is a cousin of Qin Yinglin; Qin Yinghui was the brother of Qin Yinglin; and Qin Yinghe is the sister
of Qin Yinglin. The shares held by Qin Yingfan were then divided and inherited by his spouse Xu
Qinrong, his son Qin Pei and his daughter Qin Shaonan on May 27, 2010, holding 0.11%, 0.03% and
0.03% respectively, and all of them are connected persons to the Company.
HISTORY, DEVELOPMENT AND CORPORATE STRUCTURE
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--- page 186 ---
The Company was converted into and changed its business registration to a foreign-
funded enterprise on December 13, 2010 due to the strategic investment by International
Finance Corporation (“ IFC”, an Independent Third Party), which acquired a 5.66% stake for
USD9.8 million, increasing the registered capital of the Company to RMB212 million. Upon
completion of the capital injection described above, our Company’s shareholding structure was
as follows:
Name of Shareholder Number of Shares
Percentage of
Shareholding
(%)
Qin Yinglin (؍ߵ)H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118137,935,458 65.06
Muyuan Group /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111849,186,287 23.20
IFC /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111812,000,000 5.66
Qian Ying ( ፺຃) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184,008,819 1.89
Qian Y unpeng ( ፺༶ᘄ) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,698,058 1.74
Y ang Ruihua ( เ๿ശ) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118481,059 0.23
Cao Zhinian (ϋ) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118481,059 0.23
Su Danglin (؍)H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118481,059 0.23
Li Fuqiang ( ҽ˹੶) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118481,059 0.23
Qin Yingze (ዣ) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118280,617 0.13
Xu Qinrong (ා࿲) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118213,804 0.10
Xue Y uzhen (ࣈ)H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118160,353 0.08
Qian Xiaopeng ( ፺ʃᘄ) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118160,353 0.08
Xu Y umei (͗ૠ) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111880,176 0.04
Qin Yinghui (ึ) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111880,176 0.04
Qin Yinghe (ஃ) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111880,176 0.04
Qin Pei ( ॢӒ) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111853,451 0.03
Qin Shaonan ( ॢˇ฻) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111853,451 0.03
Other 13 individual Independent Third Parties /H1118/H1118/H1118/H11182,084,585 0.98
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118212,000,000 100.00
Listing on the Shenzhen Stock Exchange
As approved by the CSRC, our A Shares were listed on the Shenzhen Stock Exchange
under the stock code 002714 on January 28, 2014 (the “ A-Shares Listing ”). In the A-Shares
Listing, we issued an aggregate of 30,000,000 A Shares and then existing shareholders sold
30,500,000 Shares, together accounting for 25.00% of our Company’s then issued shares of
242,000,000 immediately following the A-Shares Listing.
HISTORY, DEVELOPMENT AND CORPORATE STRUCTURE
– 175 –


--- page 187 ---
The shareholding structure of our Company immediately after the A-Shares Listing was
as follows:
Name of Shareholder Number of Shares
Percentage of
Shareholding
(%)
Qin Yinglin (؍ߵ)H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118118,090,970 48.80
Muyuan Group /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111842,109,958 17.40
IFC /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111810,273,585 4.25
Qian Ying ( ፺຃) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,432,079 1.42
Qian Y unpeng ( ፺༶ᘄ) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,166,026 1.31
Y ang Ruihua ( เ๿ശ) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118411,850 0.17
Cao Zhinian (ϋ) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118411,850 0.17
Su Danglin (؍)H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118411,850 0.17
Li Fuqiang ( ҽ˹੶) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118411,850 0.17
Qin Yingze (ዣ) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118240,246 0.10
Xu Qinrong (ා࿲) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118183,045 0.08
Xue Y uzhen (ࣈ)H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118137,283 0.06
Qian Xiaopeng ( ፺ʃᘄ) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118137,283 0.06
Xu Y umei (͗ૠ) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111868,641 0.03
Qin Yinghui (ึ) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111868,641 0.03
Qin Yinghe (ஃ) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111868,641 0.03
Qin Pei ( ॢӒ) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111845,761 0.02
Qin Shaonan ( ॢˇ฻) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111845,761 0.02
Other 13 individual Independent Third Parties /H1118/H1118/H1118/H11181,784,680 0.74
Public shares /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111860,500,000 25.00
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118242,000,000 100.00
Other Major Shareholding Changes
Non-public Offerings of A Shares
In 2015, following the approval of our shareholders and the relevant regulatory authority,
we were approved for a non-public offering of A Shares. In December 2015, we issued
32,873,109 A Shares to three qualified subscribers, namely Mr. Qin Yinglin, Ms. Qian Ying,
and the first employee stock ownership plan of our Company, subscribing for 9,861,933,
657,462 and 22,353,714 A Shares, respectively. After the completion of this non-public
offering, our total issued Shares increased to 516,873,109 A Shares. The lock-up period for the
A Shares held by this plan was from December 2015 to December 2018. As of the Latest
Practicable Date, all A Shares subscribed by the first employee stock ownership plan had been
sold on the A Share market and the plan has been terminated.
HISTORY, DEVELOPMENT AND CORPORATE STRUCTURE
– 176 –


--- page 188 ---
In 2017, following the approval of our shareholders and the relevant regulatory authority,
we were approved for a non-public offering of A Shares. In April 2017, we issued 124,717,239
A Shares to two qualified subscribers, namely Muyuan Group and the second employee stock
ownership plan of our Company, subscribing for 84,182,177 and 40,535,062 A Shares,
respectively. After the completion of this private placement, our total issued Shares increased
to 1,158,463,457 A Shares. For details of our second employee stock ownership plan, see
“Appendix VI. Statutory and General Information — 4. Our Incentive Plan.”
In 2019, following the approval of our shareholders and the relevant regulatory authority,
we were approved for a non-public offering of A Shares. In August 2019, we issued 76,663,600
A Shares to three qualified subscribers, namely Henan Hongbao Group Co., Ltd. (ᒿᘒණ
ʮ̡), Beixin Ruifeng Fund Management Co., Ltd. (ʮ̡) and
Sinosafe Asset Management Co., Ltd. (ப΂ʮ̡), all of whom are
Independent Third Parties, subscribing for 7,666,360, 61,330,880 and 7,666,360 A Shares,
respectively. After the completion of this non-public offering, our total issued Shares increased
to 2,161,897,822 A Shares.
We adopted two restricted share plans in 2019 and 2022 to establish and improve our
Group’s long-term incentive (the “ 2019 Restricted Shares Incentive Plan ” and “ 2022
Restricted Shares Incentive Plan ”, and together, the “ Restricted Shares Incentive Plans ”).
Under the 2019 Restricted Shares Incentive Plan, 42,710,500 and 11,840,900 restricted A
Shares were granted to 909 and 984 grantees including connected persons of the Company in
two tranches, in November 2019 and November 2020, respectively. Following the completion
of the registration of the restricted A Shares granted under the 2019 Restricted Shares Incentive
Plan, our total issued Shares increased to 3,759,330,297 A Shares. Under the 2022 Restricted
Shares Incentive Plan, 59,685,191 restricted A Shares were granted to 5,577 grantees including
connected persons of the Company in March 2022. Following the completion of the
registration of the restricted A Shares granted under the 2022 Restricted Shares Incentive Plan,
our total issued Shares increased to 5,322,072,890 A Shares.
As of the Latest Practicable Date, there was no outstanding restricted A Shares granted
under the Restricted Shares Incentive Plans and the restricted A Shares granted pursuant to the
Restricted Shares Incentive Plans have all been released from the restriction period and have
become A Shares without restrictive conditions of sale.
In 2022, following the approval of our shareholders and the relevant regulatory authority,
we were approved for a non-public offering of new A Shares. In November 2022, we issued
150,112,584 A Shares to Muyuan Group. After the completion of this private placement, our
total issued Shares increased to 5,472,282,839 A Shares.
HISTORY, DEVELOPMENT AND CORPORATE STRUCTURE
– 177 –


--- page 189 ---
Issuance of Convertible Bonds
On February 7, 2021, the Company obtained approval from the CSRC for the public
issuance of the Convertible Bonds, which were listed on the Shenzhen Stock Exchange under
the code “127045” on September 10, 2021. Existing holders of ordinary A Shares as at the close
of market on August 13, 2021 were given the preferential right to subscribe for the Convertible
Bonds, such that 84.36% of the principal amount of the Convertible Bonds was issued to
existing holders of ordinary A Shares. The remaining principal amount of the Convertible
Bonds was issued to public subscribers subscribing through the Shenzhen Stock Exchange’s
online system or underwritten by the underwriters.
The maturity date for the Convertible Bonds is August 15, 2027 (the “ Maturity Date ”),
and interest is to be paid annually. The coupon rate is 0.20% for the first year, 0.40% for the
second year, 0.80% for the third year, 1.20% for the fourth year, 1.50% for the fifth year and
2.00% for the sixth year since August 16, 2021, which is the date of issuance of the Convertible
Bonds. The period for conversion of the Convertible Bonds into A Shares is from February 21,
2022 to August 15, 2027 (the “ Conversion Period ”), during which bondholders are able to
exercise their right of conversion at any time. The conversion price was initially set at
RMB47.91 per A Share, and the conversion price has been continually adjusted with reference
to our Company’s distribution and dividend payments as well as changes in share capital. The
Convertible Bonds and A Shares converted pursuant to an exercise of the conversion right by
bondholders are not subject to any restrictions on transfer or lock-up arrangement. The holders
of the Convertible Bonds will not have any special rights which are not generally available to
other Shareholders upon Listing.
All outstanding Convertible Bonds as at the Maturity Date will be redeemed by our
Company within five trading days of the Maturity Date, at a price of 107% of their face value
(including the final installment of interest). Prior to the Maturity Date, all outstanding
Convertible Bonds may be wholly or partially redeemed by our Company at the price of their
face value plus the relevant annual installment of interest in the event that (i) during the
Conversion Period, the closing price of our Company’s A Shares on at least 15 trading days in
any 30 consecutive trading days is not less than 130% of the prevailing conversion price, or
(ii) the aggregate principal amount underlying the outstanding Convertible Bonds decreases to
less than RMB30,000,000.
For details of the conversion to A Shares since February 21, 2022, see “Statutory and
General Information — 1. Further Information About Our Company — B. Changes in Share
Capital of Our Company.”
As of the Latest Practicable Date, the aggregate principal amount underlying the
outstanding Convertible Bonds was RMB9,543,025,200. Assuming a Conversion Price of
RMB44.26 per A Share, which was the prevailing Conversion Price as of the Latest Practicable
Date, the aggregate number of the A Shares may be issued upon conversion of the outstanding
Convertible Bonds would be approximately 215,612,860 A Shares, representing 3.95% of the
issued share capital of our Company.
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Upon full conversion of the outstanding Convertible Bonds assuming an aggregate
principal amount of RMB9,543,025,200 immediately following the Global Offering at a
Conversion Price of RMB44.26 per A Share (assuming the Over-allotment Option is not
exercised), the aggregate number of the A Shares may be issued upon conversion of the
outstanding Convertible Bonds would be approximately 215,612,860 A Shares, representing
3.76% of the issued share capital of our Company.
To the best knowledge and belief of the Company, as of the Latest Practicable Date,
holders of Convertible Bonds who are also core connected persons of the Company as defined
under the Listing Rules includes Mr. Qin Yinglin, Muyuan Group, Ms. Qian Ying, Mr. Cao
Zhinian and Ms. Y ang Ruihua, holding principal amount underlying the outstanding
Convertible Bonds of RMB669,127,000, RMB985,592,900, RMB116,935,900,
RMB22,464,900, and RMB24,852,400, respectively. Assuming a Conversion Price of
RMB44.26 per A Share, which is the prevailing Conversion Price as of the Latest Practicable
Date, the number of the A Shares may be issued upon conversion of the outstanding
Convertible Bonds held by Mr. Qin Yinglin, Muyuan Group, Ms. Qian Ying, Mr. Cao Zhinian
and Ms. Y ang Ruihua would be approximately 15,118,098 A Shares, 22,268,254 A Shares,
2,642,022 A Shares, 507,567 A Shares, and 561,509 A Shares, respectively, representing
0.26%, 0.39%, 0.05%, 0.01%, and 0.01% of the issued share capital of our Company
immediately following the Global Offering (assuming the Over-allotment Option is not
exercised).
Issuance of Preference A Shares in 2017
On May 25, 2017, the shareholders’ general meeting considered and approved the
resolution on the non-public offering of Preference A Shares of our Company. CSRC reviewed
and approved the non-public offering of Preference A Shares of our Company on October 30,
2017. On February 6, 2018, our Company issued 24,759,300 preference A Shares at the
subscription price of RMB100 per preference share (the “ Preference A Shares ”), with an
aggregated subscription price of RMB2,475,930,000, and the Preference A Shares were listed
on the Shenzhen Stock Exchange with the abbreviation and stock code of “MYGF Pref Shares
01” and “140006” (Ꮄ01).
Under the resolutions dated December 12, 2022, the Board of Directors of our Company
approved the redemption of 24,759,300 Preference A Shares issued with a par value of
RMB100 per Preference A Share. All Preference A Shares were redeemed and delisted on
December 29, 2022.
Employee Stock-ownership Plans and Restricted Share Schemes
Since our A Share listing in 2014, there have been several instances of share capital
changes of our Company as a result of the repurchase and/or issuance of A Shares and
cancellation of restricted A Shares by our Company for employee incentive purposes. See the
Restricted Shares Incentive Plans and our first and second employee stock ownership plans
under “— Non-public Offerings of A Shares”.
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In August 2017, following the approval of our shareholders, we purchased on A Share
market a total of 26,692,421 A Shares for our third employee stock ownership plan. Due to the
equity distribution in July 2018, we issued eight A Shares for every ten Shares held via capital
reserve conversion. As a result, the total A Shares held by our third employee stock ownership
plan increased to 48,046,358. The lock-up period for the A Shares held by this plan was from
August 2017 to August 2018. As of the Latest Practicable Date, all A Shares subscribed by the
third employee stock ownership plan had been sold on the A Share market and the plan has
been terminated.
For details changes in share capital of our Company within the two years immediately
preceding the date of this prospectus, see “Appendix VI. Statutory and General Information —
1. Further Information about Our Company — B. Changes in Share Capital of Our Company.”
MAJOR ACQUISITIONS AND DISPOSALS
We had not carried out any major acquisitions, disposals or mergers during the Track
Record Period and up to the Latest Practicable Date.
OUR LISTING ON THE SHENZHEN STOCK EXCHANGE AND REASONS FOR THE
LISTING ON THE STOCK EXCHANGE
Since January 28, 2014, the date of the listing of the A Shares of our Company on the
Shenzhen Stock Exchange, and up to the Latest Practicable Date, our Directors confirmed that
we had no instances of material non-compliance with the rules of the Shenzhen Stock
Exchange and other applicable securities laws and regulations of the PRC in any material
respects and, to the best knowledge of our Directors having made all reasonable inquiries, there
was no material matter that should be brought to the investors’ attention in relation to our
compliance record on the Shenzhen Stock Exchange. As advised by our PRC Legal Adviser,
during the Track Record Period and up to the Latest Practicable Date, we have not been subject
to any material administrative penalties or regulatory measures imposed by the CSRC,
Shenzhen Stock Exchange or PRC securities regulatory authorities. Based on the independent
due diligence conducted by the Joint Sponsors, nothing has come to the Joint Sponsors’
attention that would cause them to disagree with our Directors’ confirmation with regard to the
compliance records of the Company on the Shenzhen Stock Exchange.
We believe the Offering and the listing on the Hong Kong Stock Exchange will help us
advance our internationalisation strategy and establish a global capital operation platform. See
“Business — Our Strategies” and “Future Plans and Use of Proceeds.”
HISTORY, DEVELOPMENT AND CORPORATE STRUCTURE
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PUBLIC FLOAT AND FREE FLOAT
PUBLIC FLOAT
Pursuant to Rule 8.08(1) (as amended and replaced by Rule 19A.13A of the Listing Rules)
of the Listing Rules, where a new applicant is a PRC issuer with other listed shares at the time
of listing, this will normally mean that the portion of H shares for which listing is sought that
are held by the public, at the time of listing, must (a) represent at least 10% of the issuer’s total
number of issued shares in the class to which H shares belong (excluding treasury shares); or
(b) have an expected market value of not less than HK$3.0 billion.
Our A Shares are listed on the Shenzhen Stock Exchange. Assuming that (i) 273,951,400
H Shares are allotted and issued in the Global Offering and none of which will be allocated to
any core connected person of our Company, (ii) the Over-allotment Option is not exercised,
(iii) 215,612,860 A Shares are issued upon conversion of the outstanding Convertible Bonds at
the Conversion Price as of the Latest Practicable Date, and (iv) 5,462,771,266 A Shares are in
issue and outstanding upon completion of the Global Offering, 273,951,400 H Shares, will be
counted towards the public float. With respect to the maximum Offer Price of HK$39.00 per
Offer Share, the expected market capitalization of our H Shares held by the public would be
HK$10,684.1 million which is higher than the prescribed market value of the H Shares required
to be held by the public of HK$3.0 billion under Rule 19A.13(A)(2). Based on the above, it
is expected that our Company will satisfy the public float requirements as required under Rule
19A.13A(2) of the Listing Rules.
FREE FLOAT
Pursuant to Rule 8.08A (as amended and replaced by Rule 19A.13C) of the Listing Rules,
where a new applicant is a PRC issuer with other listed shares at the time of listing, this will
normally mean that the portion of H shares for which listing is sought that are held by the
public and not subject to any disposal restrictions (whether under contract, the Listing Rules,
applicable laws or otherwise), at the time of listing, must: (a) represent at least 5% of the total
number of issued shares in the class to which H shares belong at the time of listing (excluding
treasury shares), with an expected market value at the time of listing of not less than HK$50.0
million; or (b) have an expected market value at the time of listing of not less than HK$600.0
million.
Assuming that the Over-allotment Option is not exercised, and that the final Offer Price
is fixed at the maximum Offer Price of HK$39.00 per Offer Share, save for 136,972,800 H
Shares (representing 2.39% of our total issued Shares immediately upon completion of the
Global Offering) to be issued to the cornerstone investors that are subject to disposal
restrictions for a period of six months from the Listing Date, the remaining 136,978,600 H
Shares with an expected market capitalization of HK$5,342.2 million, which is higher than
HK$600 million under Rule 19A.13(C) will not be subject to any disposal restrictions (whether
under contract, the Listing Rules, applicable laws or otherwise) at the time of the Listing. Our
Company will satisfy the free float requirement under Rule 19A.13C of the Listing Rules.
HISTORY, DEVELOPMENT AND CORPORATE STRUCTURE
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OUR SHAREHOLDING AND CORPORATE STRUCTURE
Shareholding and Corporate Structure Immediately Before the Global Offering
The following chart depicts a simplified shareholding and beneficial ownership structure of our Group immediately prior to the completion of
the Global Offering (excluding A Shares issuable upon the conversion of the outstanding Convertible Bonds and assuming no changes are made to
the issued share capital of our Company between the Latest Practicable Date and Listing):
Our Company
Mr. Qin
Yinglin(1) Ms. Qian Ying Qin
Muyuan(2)
Muyuan
Group(1)
0.20%1.18%15.54%38.19%
15.00%85.00%
Other A
Shareholders
44.89%
Huaxian Muhua
Animal Husbandry
Industry Development
Co., Ltd.
Nanyang Wolong
Muyuan Breeding
Co., Ltd.
100%
Tanghe Muyuan
Livestock Husbandry
Co., Ltd.
100%
Fugou Muyuan
Livestock Husbandry
Co., Ltd.
100%
Huaxian Muyuan
Livestock Husbandry
Co., Ltd.
100%
Zhengyang Muyuan
Livestock Husbandry
Co., Ltd.
100%
Henan Muyuan
Grain Trade
Co., Ltd.
100%
Inner Mongolia Kailu
Muyuan Livestock
Husbandry Co., Ltd.
100%
Taikang Muyuan
Livestock Husbandry
Co., Ltd.
100%
Xiping Muyuan
Livestock Husbandry
Co., Ltd.
100%
Ningling Muyuan
Livestock Husbandry
Co., Ltd.(3)
61.41%
Liaoning Tieling
Muyuan Livestock
Husbandry Co., Ltd.
100%
Shangshui Muyuan
Livestock Husbandry
Co., Ltd.
100%
Sheqi Muyuan
Livestock Husbandry
Co., Ltd.
100%
Qixian Muyuan
Livestock Husbandry
Co., Ltd.
100%100%
Shangcai Muyuan
Livestock Husbandry
Co., Ltd.
100%
Other subsidiaries(4)
Dengzhou Muyuan
Breeding Co., Ltd.
Muyuan Meat
Co., Ltd.
Henan Muyuan
Hog Breeding
Co., Ltd.
Anhui Fengtai
Muyuan Livestock
Husbandry Co., Ltd.
Anhui Suixi Muyuan
Livestock Husbandry
Co., Ltd.
Tongyu Muyuan
Meat Food Co., Ltd.
Luyi Muyuan Livestock
Husbandry Co., Ltd.
Neixiang Muyuan
Modern Agricultural
Complex Co., Ltd.
Ningling Muhua Animal
Husbandry Industry
Development Co., Ltd.
Anhui Yingshang
Muyuan Livestock
Husbandry Co., Ltd.
Ningling Muyuan
Meat Co., Ltd.
Neihuang Muyuan
Livestock Husbandry
Co., Ltd.
Chaohu Muyuan
Livestock Husbandry
Co., Ltd.
24.73%75.27%
100% 100%
Huaibei Muhua Animal
Husbandry Industry
Development Co., Ltd.
100% 100% 100% 100%
Zhengyang Muyuan
Meat Co., Ltd.
100%
100% 100% 100% 100%
Shangshui County
Muyuan Meat Co., Ltd.
100% 100%
Yingshang Muyuan
Meat Co., Ltd.
100%
100% 100% 100%
Shandong Huimin
Muyuan Livestock
Husbandry Co., Ltd.
100% 100% 100%
Hubei Zhongxiang
Muyuan Breeding
Co., Ltd.
Laohekou Muyuan
Livestock Husbandry
Co., Ltd.
100%
85.82%35.71%
33.33%
Nanjing Jiangning
Muyuan Livestock
Husbandry Co., Ltd.
100%
Mengcheng Muyuan
Livestock Husbandry
Co., Ltd.
Shandong Dongming
Muyuan Livestock
Husbandry Co., Ltd.
Fugou Muhua Animal
Husbandry Industry
Development Co., Ltd.
100%
66.67%55.75%
44.25%
Nanyang Muhua Animal
Husbandry Industry
Development Co., Ltd.
64.29% 14.18% 100%
Henan Muyuan
Science and Technology
Co., Ltd.
Naimanqi Muyuan
Meat Food Production
Co., Ltd
Tieling Muyuan
Meat Food Co., Ltd.
Lindian County
Muyuan Meat Food
Co., Ltd.
100%
Caoxian Muyuan
Meat Co., Ltd.
HISTORY, DEVELOPMENT AND CORPORATE STRUCTURE
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Notes:
(1) On December 13, 2017 and December 19, 2017, Mr. Qin Yinglin and Muyuan Group entered into a voting rights entrustment agreement and its supplementa ry agreement
(collectively, the “ Agreements ”). Under the Agreements, Mr. Qin Yinglin entrusted to Muyuan Group all shareholder voting rights, director nomination rights, and other
shareholder rights (excluding dividend rights and other shareholder property rights) attached to 448,667,502 A Shares (representing 1,922,091,5 79 A Shares as of the Latest
Practicable Date) held by him. Following the voting rights entrustment, Muyuan Group assumed control of the Company and consolidated it into its fina ncial statements. This
arrangement aimed to optimize corporate governance of Muyuan Group, improve its information disclosure quality and consistency, enhance its marke t reputation, and bolster
its financing capacity. Pursuant to the Agreements, Muyuan Group exercises the voting rights attached to the entrusted shares in relation to the Comp any’s matters. The voting
in respects of such entrusted shares is determined according to the internal decision-making process of Muyuan Group and reflects decisions of Mr. Qi n Yinglin and Ms. Qian
Ying. The agreement are valid for a long-term and has no expiration date but may be terminated if both parties agree to terminate the Agreements or Mr. Qi n is no longer the
holders of the entrusted shares.
(2) Qin Muyuan is the son of Mr. Qin Yinglin and Ms. Qian Ying.
(3) As of the Latest Practicable Date, the remaining 38.59% interest in Ningling Muyuan Livestock Husbandry Co., Ltd. was held by ABC Financial Asset I nvestment Co., Ltd.
(ʮ̡), an Independent Third Party. In January 2026, ABC Financial Asset Investment Co., Ltd. (ʮ̡) transferred all interest it
held in Ningling Muyuan Livestock Husbandry Co., Ltd. (ʮ̡) to the Company and such transfer was under registration with the relevant local market
supervision and administration bureau as of the Latest Practicable Date.
(4) As of the Latest Practicable Date, other subsidiaries included, in aggregate, 274 subsidiaries.
HISTORY, DEVELOPMENT AND CORPORATE STRUCTURE
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Shareholding and Corporate Structure upon Completion of the Global Offering
The following chart depicts the shareholding and beneficial ownership structure of our Group immediately following the completion of the
Global Offering, assuming that the Over-allotment Option is not exercised, excluding A Shares issuable upon the conversion of the outstanding
Convertible Bonds and that no changes are made to the issued share capital of the Company between the Latest Practicable Date and Listing:
Our Company
Mr. Qin
Yinglin(1) Ms. Qian Ying Qin
Muyuan(2)
Muyuan
Group(1)
36.37% 14.80% 1.12% 0.19% 42.74% 4.78%
15.00%85.00%
Other A
Shareholders H Shareholders
Huaxian Muhua
Animal Husbandry
Industry Development
Co., Ltd.
Nanyang Wolong
Muyuan Breeding
Co., Ltd.
Tanghe Muyuan
Livestock Husbandry
Co., Ltd.
Fugou Muyuan
Livestock Husbandry
Co., Ltd.
Huaxian Muyuan
Livestock Husbandry
Co., Ltd.
Zhengyang Muyuan
Livestock Husbandry
Co., Ltd.
Taikang Muyuan
Livestock Husbandry
Co., Ltd.
Inner Mongolia Kailu
Muyuan Livestock
Husbandry Co., Ltd.
Henan Muyuan
Grain Trade
Co., Ltd.
Nanjing Jiangning
Muyuan Livestock
Husbandry Co., Ltd.
Qixian Muyuan
Livestock Husbandry
Co., Ltd.
Sheqi Muyuan
Livestock Husbandry
Co., Ltd.
Shangshui Muyuan
Livestock Husbandry
Co., Ltd.
Liaoning Tieling
Muyuan Livestock
Husbandry Co., Ltd.
Ningling Muyuan
Livestock Husbandry
Co., Ltd.(3)
Shangcai Muyuan
Livestock Husbandry
Co., Ltd.
Xiping Muyuan
Livestock Husbandry
Co., Ltd.
100% 100% 100% 100% 100% 100%100%100% 100%61.41%100%100%100%100%100%100% 100%
Other subsidiaries(4)
Dengzhou Muyuan
Breeding Co., Ltd.
Hubei Zhongxiang
Muyuan Breeding
Co., Ltd.
Laohekou Muyuan
Livestock Husbandry
Co., Ltd.
Muyuan Meat
Co., Ltd.
Mengcheng Muyuan
Livestock Husbandry
Co., Ltd.
Henan Muyuan
Hog Breeding
Co., Ltd.
Anhui Fengtai
Muyuan Livestock
Husbandry Co., Ltd.
Shandong Dongming
Muyuan Livestock
Husbandry Co., Ltd.
Anhui Suixi Muyuan
Livestock Husbandry
Co., Ltd.
Luyi Muyuan Livestock
Husbandry Co., Ltd.
Zhengyang Muyuan
Meat Co., Ltd.
Shangshui County
Muyuan Meat Co., Ltd.
Huaibei Muhua Animal
Husbandry Industry
Development Co., Ltd.
Ningling Muhua Animal
Husbandry Industry
Development Co., Ltd.
Anhui Yingshang
Muyuan Livestock
Husbandry Co., Ltd.
Neixiang Muyuan
Modern Agricultural
Complex Co., Ltd.
Ningling Muyuan
Meat Co., Ltd.
Neihuang Muyuan
Livestock Husbandry
Co., Ltd.
Yingshang Muyuan
Meat Co., Ltd.
Nanyang Muhua Animal
Husbandry Industry
Development Co., Ltd.
Fugou Muhua Animal
Husbandry Industry
Development Co., Ltd.
Chaohu Muyuan
Livestock Husbandry
Co., Ltd.
24.73%75.27%
100% 100% 100% 100% 100% 100%
100% 100% 100% 100%
100% 100% 100% 100% 100%
100%
85.82%35.71%
33.33%66.67%55.75%
44.25%
64.29% 14.18% 100%
Shandong Huimin
Muyuan Livestock
Husbandry Co., Ltd.
100% 100%
Henan Muyuan
Science and Technology
Co., Ltd.
Tongyu Muyuan
Meat Food Co., Ltd.
100% 100% 100% 100%
Naimanqi Muyuan
Meat Food Production
Co., Ltd
Tieling Muyuan
Meat Food Co., Ltd.
Lindian County
Muyuan Meat Food
Co., Ltd.
100%
Caoxian Muyuan
Meat Co., Ltd.
Note: See “— Shareholding and Corporate Structure Immediately Before the Global Offering.”
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OVERVIEW
Who We Are
We are a technology-driven leading pork company, pioneering smart hog farming. With
over 30 years of deep-rooted expertise, we have become a leader in the hog farming industry
adopting a vertically-integrated business model that spans the entire hog value chain, which
includes hog breeding, hog farming, feed production, slaughtering and meat production.
According to Frost & Sullivan, since 2021, we have ranked first globally in the hog farming
industry in terms of production capacity and sales volume of hogs for four consecutive years.
Our global market share, measured by sales volume of hogs, increased from 2.6% in 2021 to
5.6% in 2024, exceeding the total of the players ranked second to fourth in 2024. While
continuing to solidify our leadership in the hog farming industry, since 2019, we have
strategically entered the hog slaughtering and processing industry to enhance our integrated
business model. According to Frost & Sullivan, we ranked fifth globally and first in China in
the hog slaughtering and processing industry in terms of slaughter volume in 2024, and our
slaughtering and meat product business reported the highest revenue CAGR from 2021 to 2024
among large-scale hog slaughtering and processing companies in China.
Our Technology and Innovation
Technology is the cornerstone of our business. As a pioneer in smart hog farming, we
have consistently rolled out new technologies in biosecurity, odor control, environmentally
sustainable operations and cost management, tackling industry pain points, enhancing
operational efficiency, optimizing cost structures, and generating lasting social value.
– In 2000, we initiated R&D into optimized soybean meal feed formulations, aimed at
lowering production costs and mitigating supply chain risks.
– In 2002, we pioneered the two-breed rotational cross system, establishing our
independent breeding system.
– In 2008, we applied the integrated crop-livestock system in our operations,
advancing environmental sustainability and resource efficiency.
– In 2011, we initiated digitalization in our operations, improving management
efficiency.
– In 2012, we launched disease elimination initiatives leveraging proprietary R&D
and technological innovation, developing biosecurity solutions to continuously
enhance production performance.
– In 2013, we established our pathology laboratories to strengthen diagnostic
capabilities, enabling efficient and accurate disease detection.
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– In 2017, we fully completed the digitalization in our operations, continually
enhancing management efficiency.
– In 2019, we comprehensively upgraded our biosecurity management, equipping all
hog houses with our proprietary environment control system, which incorporates
air-filtration, sterilization, separate ventilation and deodorization features.
– In 2019, we comprehensively upgraded our smart operating systems, including the
feeding system, hog house environment control system, and hog health management
system, setting industry benchmarks for smart hog farming.
– In 2021, we established a platform dedicated to big data-related research and
development, accelerating our smart hog farming innovations.
– In 2021, we shared our optimized soybean meal feed formulations with the industry,
which were endorsed by the MARA as a strategic move to address the key
challenges in the hog farming industry, including soybean meal reliance and
nitrogen emission.
– In 2024, we commercialized ammonia reduction and deodorization solutions for
livestock farming, which were promoted by the PRC Ministry of Ecology and
Environment.
Through our proprietary innovations, we have solidified our leadership within the
industry while delivering exceptional financial performance.
From 2014 to 2024, we achieved industry-leading revenue growth with a CAGR of
48.7%, the highest among the top ten global listed pork companies by sales volume.
Leveraging our industry-leading technologies and cost-management capabilities, we have
achieved robust profitability. During the same period, our net profit increased at a CAGR of
72.7% and our average annual net profit margin reached 19.0%. Notably, we are the only
company to sustain an average annual net profit margin of above 15.0% from 2014 to 2024
among the top ten global listed pork companies by sales volume. From 2014 to 2024, our
EBITDA (non-CASBE measure) also increased at a CAGR of 60.2%, with an average EBITDA
margin (non-CASBE measure) of 30.8%, outperforming other large-scale listed companies in
China’s hog farming industry.
In addition to the growth in revenue and profit, we have consistently maintained a robust
cash flow position. Our continued and long-term investments in capital have gradually
transferred to cash flow generation capability. In 2022, 2023, 2024 and the nine months ended
September 30, 2024 and 2025, we recorded net cash inflow from operating activities of
RMB23,010.6 million, RMB9,892.8 million, RMB37,543.1 million, RMB29,177.9 million and
RMB28,579.5 million, respectively. From 2022 to 2024, our accumulated net cash inflow from
operating activities was 1.6 times of our accumulated capital expenditure (which represents
payment for acquisition of fix assets, intangible assets and other long-term assets), and in 2024
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alone, our net cash inflow from operating activities was 3.0 times of our capital expenditure.
In the nine months ended September 30, 2025, our net cash inflow from operating activities
reached 3.9 times of our capital expenditure. Our profitability and asset utilization have
enabled industry-leading returns with an average ROE per annum of 22.5% from 2014 to 2024,
outperforming the second-ranked listed peer in China who recorded an average ROE per annum
of 15.7% during the same period. We value the long-term trust of our shareholders and have
consistently returned capital to shareholders through dividends. The aggregate dividends our
Company declared attributable to the years ended December 31, 2022, 2023, 2024 and the nine
months ended September 30, 2025 were RMB16.6 billion. As of the Latest Practicable Date,
we had paid these dividends in full.
Our Growth Opportunities
The global hog farming industry presents significant growth opportunities, which we are
uniquely positioned to capture with our advanced technologies, cost management advantages,
ESG excellence and our vertically-integrated business model that spans the entire hog value
chain (including hog breeding, hog farming, feed production, slaughtering and meat
production). According to Frost & Sullivan, global pork consumption has been increasing
steadily at a CAGR of 4.9% from 95.2 million tons in 2020 to 115.3 million tons in 2024. China
has long been the world’s largest pork consuming country, while, according to Frost &
Sullivan, the per capita consumption of main source of animal protein in China was 69.4 kg
in 2024, far below that of 102.0 kg per capita in the United States. Additionally, the proportion
of chilled fresh pork in China out of total pork consumption is still relatively low compared to
that in developed countries, indicating huge market potential.
Additionally, in certain countries and regions, such as Vietnam, the Philippines and
Thailand in Southeast Asia, per capita pork consumption has increased steadily in line with
continuous economic development and the improvement per capita disposable income. The
global hog farming industry remains highly fragmented, with the top five hog farming
companies in the world by sales volume accounting for a market share of 11.8% in 2024,
leaving significant opportunities for market consolidation. We are actively expanding into
overseas markets to capitalize on these opportunities. Leveraging our proven technological
expertise and innovative solutions, we aim to empower the hog farming industry by
establishing an interconnected hog farming ecosystem. For example, in 2024, we entered into
a strategic partnership with BAF Vietnam Agriculture, covering areas of hog house design,
biosecurity management, odor control solutions and smart hog farming equipment, so as to
optimize its hog farming efficiency and ensure environmentally responsible operations,
marking our initial efforts of global expansion.
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OUR COMPETITIVE STRENGTHS
We believe the following strengths have driven our success and enabled us to seize market
opportunities and achieve sustainable growth:
Industry Leader with Fully Integrated Operations
As world’s largest pork company, we operate a vertically-integrated business model
spanning the entire industry value chain, covering hog breeding, hog farming, feed production,
slaughtering and production of meat products. Our vertically-integrated business model allows
us to allocate resources efficiently. Our proven technologies have efficiently addressed critical
industry-wide challenges, and we benefit from such seamless collaboration throughout
upstream and downstream operations, maximizing our operational efficiencies. We have
established a fully traceable and highly replicable operating system while ensuring food safety
and optimizing cost management, thereby strengthening our undisputed market leadership
position. With a consumer-centric approach, and leveraging our insights gained from
slaughtering and meat product business, we continually improve our hog breeding and hog
farming practices to deliver high-quality pork to millions of households across China.
We have established our market leadership position with our two core business segments,
namely hog business, and slaughtering and meat product business. According to Frost &
Sullivan, since 2021, we have ranked first globally in the hog farming industry in terms of
production capacity and sales volume of hogs for four consecutive years. Our global market
share, measured by sales volume of hogs, increased from 2.6% in 2021 to 5.6% in 2024,
exceeding the total of the players ranked second to fourth in 2024. According to Frost &
Sullivan, we ranked the fifth globally and the first in China in hog slaughtering and processing
industry in terms of slaughter volume in 2024. We made such achievement within a short
period since we initially started the business in 2019 with our lead over the second-ranked
company continuing to grow.
While attaining industry-leading scale and market leadership, we have sustained rapid
growth. From 2014 to 2024, we achieved industry-leading revenue growth with a CAGR of
48.7%, the highest among the top ten global listed pork companies by sales volume. Our
commitment to high-quality growth has driven robust and sustainable profitability. During this
same period, our net profit increased at a CAGR of 72.7% and our average annual net profit
margin reached 19.0%. Notably, we are the only one of the top ten global listed pork
companies, measured by sales volume, that sustains an average annual net profit margin of
above 15.0% from 2014 to 2024, while maintaining an industry-leading growth rate.
Benefiting from our vertically-integrated business model that spans the entire hog value
chain (including hog breeding, hog farming, feed production, slaughtering and meat
production), proven technological expertise and management capabilities, we have
successfully achieved a balance among scale, growth and profitability.
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Proprietary End-to-End R&D Capabilities
With over 30 years of in-depth industry expertise, we have possess proprietary end-to-end
R&D capabilities across the full value chain to enhance operational efficiency, improve cost
management capabilities and deliver long-lasting social value.
Hog breeding
According to Frost & Sullivan, a majority of breeding hogs used in commercial hog
farming in China are imported from overseas. In stark contrast, we have spent three decades
forming a fully self-established breeding system. Our proprietary data-driven genetic selection
platform, including breeding hog health management system and tagging and recording genetic
data system, enables us to continually improve the quality of our breeding hogs. In the nine
months ended September 30, 2025, our average PSY reached approximately 28, outperforming
the industry average.
Precision feeding system and optimized feed formulation
Since 2000, ahead of industry for at least ten years, we started the R&D of optimized
soybean meal feed formulations, allowing us to reduce the proportion of soybean meal used in
feed production while maintaining sufficient nutrition for hog health. The optimized soybean
meal feed formulations are able to decrease the feed costs and lower the nitrogen emissions.
According to Frost & Sullivan, in 2024, soybean meal accounted for approximately 10% to
17% of feed ingredients in the commonly seen feed formulations in the industry, compared to
7.3% in ours. Our smart feeding system enables accurate evaluation and use of feed ingredients
through adjusting the feed formulations based on the hogs’ age and weight on a daily basis. Our
automatic feeding facilities minimize manual intervention and improve feeding and production
efficiency. In the meantime, our feed ingredient pricing monitoring system dynamically adjusts
the proportion of feed ingredients based on their selling price changes, thus allowing us to
effectively control our feed costs.
Hog health management
China’s hog industry, characterized by high densities of hog farming operations and
frequent animal transportation, requires rigorous disease prevention measures to safeguard
production efficiency. As such, we have developed and implemented our “SkyNet Project” —
a comprehensive disease prevention and control system grounded in extensive research into the
causes of hog diseases. This initiative focuses on identifying and addressing the viruses,
bacteria and parasites that lead to illnesses in hogs. By integrating advanced environmental
control systems, biosecurity protocols and immunization management practices, we aim to
significantly reduce disease throughout the whole hog farming process.
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In terms of our proprietary hog house design, our self-developed air filtration system is
able to effectively block aerosol particles of 0.3 microns or larger. Additionally, our ventilation
system provides isolated air environments for each zone, preventing cross-contamination in the
event of disease outbreaks. Furthermore, our advanced sterilization and deodorization
technologies have achieved over 99.9% effectiveness in pathogen elimination, dust removal
and odor control. We have also established a fully traceable digital biosecurity system that
monitors the entire disease prevention processes covering testing, diagnose, intervention and
treatment. Our smart hog health management system enables real-time monitoring of hog
health conditions, thus providing the diagnostic results within six hours after collecting
samples. This integrated approach ensures complete traceability of hog health issues and
enables immediate responses to potential disease outbreaks.
Smart hog farming
Our hog farming operations integrate smart equipment, IoT technologies and big
data-driven analytics solutions. Equipped with a range of sensors, our hog farming operations
generate various real-time indicators on environment and hog health conditions. Our smart hog
farming system tracks critical health indicators of hogs, which enables timely disease detection
and targeted treatment interventions, and significantly minimizes human contact with hogs.
Furthermore, our smart hog farming operations significantly minimize human contact with
hogs, reducing the risk of disease transmission while enhancing overall hog health and
operational efficiency.
With our industry-leading technological capabilities, we have achieved outstanding hog
growth performance. In the nine months ended September 30, 2025, our hogs under finishing
period recorded an average daily weight gain of 841g, surpassing the industry average. During
the Track Record Period, our aggregate sales volume of finished hogs increased from 6.4
million tons in 2022 to 8.0 million tons in 2024, and was 7.3 million tons in the nine months
ended September 30, 2025, whereas the average weight of our finished hogs increased from
116.4kg in 2022 to 122.8kg in 2024, and further increased to 127.1kg in nine months ended
September 30, 2025. Our smart hog farming operations have also optimized operational
efficiency. By digitalizing our decades of hog farming expertise through smart solutions, our
annual average total unit cost, which is the total costs and expenses per kilogram (live weight
equivalent) incurred in hog farming, including operating costs, as well as selling and
distribution expenses, general and administrative expenses, research and development
expenses and financial expenses, has maintained the lowest among large-scale hog farming
companies in China in each year from 2019 to 2024, and it further decreased to RMB12.19 per
kg for the nine months ended September 30, 2025, outperforming the industry average.
End-to-end R&D in the hog farming industry requires deep insights and commercial
thinking across the entire industry value chain, thereby creating exceptionally high entry
barriers. As of September 30, 2025, we have a R&D team of approximately 6,300 employees,
and we have recorded R&D expenses with an aggregate amount of RMB5.8 billion during the
Track Record Period. According to Frost & Sullivan, we ranked first in terms of the amount
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of R&D expenses in 2024 in the hog industry in China. As of the Latest Practicable Date, we
had over 1,700 patents. Our end-to-end R&D capabilities across the whole value chain,
creating formidable technology barriers in critical areas.
High-Growth Slaughtering and Meat Product Business
We ventured into the hog slaughtering and processing industry in 2019 as part of our
vertical integration, enabling flexibility for resource allocation, and maximizing business
synergy. Leveraging our insights gained from slaughtering and meat product business, we stay
attuned to consumers’ diverse needs across different regions in China. Our consumer-centric
approach improves our hog breeding and hog farming practices, allowing us to deliver
regionally tailored hogs and meat products, meeting evolving consumer demands. Our
vertically-integrated business model supports our end-to-end traceability system, guaranteeing
the quality, food safety and cost-effectiveness of our products. In addition, by strategically
locating our slaughtering plants in close proximity to hog farms, we are able to enhance cost
management.
Guided by a consumer-centric approach and proactive product R&D through advanced
techniques, we have been able to maintain the freshness of our meat products, optimizing pork
visual appeal and ensuring product quality. To deepen our understanding of consumer needs,
we established a professional tasting team and conducted numerous tasting events. By
gathering and analyzing consumer feedback, we continually improve our hog breeding
practices to produce hogs and meat products that meet specific market demands in different
regions. For example, we introduced skinless, bone-in meat products specifically designed for
barbecue catering businesses, which have been successfully replicated in various sales
channels.
We have established an extensive and deeply penetrated sales network across China, the
world’s largest consumer market of pork, which brings our products to millions of households.
In light of consumers’ higher expectations for food safety and traceability, our vertically-
integrated business model and rigorous supply chain control confer a distinct competitive edge.
Leveraging our vertically-integrated business model, consumer-centric product R&D approach,
and large-scale, industrialized and smart production capabilities, our slaughtering and meat
product business has built up a customer base of around 20,000 customers within five years
since our inception in 2019. Specifically, during the Track Record Period, our slaughtering and
meat products business has achieved extensive market penetration, accumulatively supplying
21 of the 2024 Hurun Top 100 Restaurant Brands in China and 22 of the annual top 100
retailers recognized by CGCC and CNCIC, and maintaining full coverage across all major
delivery platforms. Our penetration into these sales channels has promoted the sales of our
pork-cut products, enhancing our profitability.
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We are the fastest growing company with the highest revenue CAGR from 2021 to 2024
among large-scale hog slaughtering and processing companies in China. According to Frost &
Sullivan, in 2024, we recorded a slaughter volume of 12.5 million heads, ranking first in terms
of slaughter volume in China’s hog slaughtering and processing industry. The hog slaughtering
and processing industry is undergoing rapid consolidation, driven by tightening environmental
regulations and rising consumer demand for high-quality products. We are well positioned to
capitalize on the industry trend and expand our market leadership through our competitiveness
in vertically-integrated operations, our diversified product portfolio and our extensive sales
network.
ESG Pioneer in Sustainable Hog Farming
According to the LSEG (London Stock Exchange Group) ESG scores as of the Latest
Practicable Date, we ranked among the top 20% of the 505 food and tobacco companies on the
list of LSEG Data & Analytics, scored 90 out of 100 for emissions. Notably, we are hog
farming company among the top 100 food and tobacco companies on the list of LSEG Data &
Analytics.
We are implementing comprehensive strategies to reduce emissions. Pioneering in
adopting renewable energy in China’s hog farming industry, we commenced to use solar power
systems as early as in 2018. Additionally, our proprietary hog houses with fossil fuel-free
heating reduce greenhouse gas emissions. Our ammonia reduction and deodorization solutions
used in our hog farming operations enable us to significantly reduce ammonia emissions.
Furthermore, our proprietary optimized soybean meal feed formulations allows us to
significantly reduce nitrogen emissions.
Driven by our dedication to generating lasting social value and contributing to the
sustainable development of the industry, we champion the integrated crop-livestock system,
and we provided fertilizers for approximately 4.7 million mu of farmland in 2024, generating
around RMB1.4 billion in economic benefits for farmers. As an industry leader, we actively
promote industry-wide advancement through technology sharing. For example, in 2021, we
introduced our optimized soybean meal feed formulations to the industry to further support the
participants in China’s hog farming industry to decrease the reliance on soybean meal.
Additionally, we have commercialized solutions for ammonia reduction and deodorization used
in livestock farming to transform forward the hog farming industry.
We have established a comprehensive animal welfare system that integrates
internationally recognized humane farming practices across our operations. To ensure rigorous
implementation, we partner with independent audit institutions to provide specialized
employee training and conduct regular welfare assessments. We continuously enhance ESG
practices and actively share best practices to accelerate the hog farming industry’s green
transformation.
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Visionary Leadership and Strong Corporate Governance
With over 30 years in the hog farming industry, our founders, Mr. Qin Yinglin and
Ms. Qian Ying, have been contributing to the development of modern hog farming. Mr. Qin
Yinglin is widely recognized as the innovator in China’s hog farming industry, while Ms. Qian
Ying stands as an expert in hog farming and animal disease prevention. We have a stable core
management team and we are actively training the next generation of leaders to ensure we have
talented executives ready to meet future challenges. With unwavering determination and a
forward-thinking, innovative mindset, our visionary management team drives us through
ongoing transformation and progress, reinforcing our leadership position.
We are committed to maximizing the value for our employees, driving internal value and
excelling external value. We emphasize employee training and career advancement, ensuring
our employees achieve their career goals while driving our sustainable growth. Our ‘Help &
Guide’ mentorship program pairs new joiners with experienced seniors, delivering
comprehensive training to strengthen our employee’s competitive edge. Through hands-on and
tailored guidance, the program ensures technical proficiency and operational excellence at
every level. We actively foster broader perspectives by sponsoring employees’ participation
into international industry conferences and promoting cross-border knowledge exchange,
keeping our practices and innovations at the forefront of the industry. In 2024, we invested
RMB720 million in employee training, delivering an average of 37 days of training per
employee with 100% coverage. This commitment has strengthened our employees’ sense of
belonging and fostered their growth in tandem with our Company’s progress. We acknowledge
the importance of our employees, and we have launched a number of employee equity incentive
plans, engaging over 8,000 employees.
We are the “producer of high-quality pork and promoter of social progress”. With the
emphasis on a corporate culture of openness and sharing, we have a cohesive team with unified
values and mission. Our vision is to serve people with wholesome pork for their enjoyment in
an abundant life and make the Company respectable. It drives us to assume the mission of
“producing safe and healthy pork products for the public and advancing healthy industry
development”. Through innovative technologies and sustainable farming practices, we advance
industry standards and environmental stewardship. Our corporate culture champions social
value and personal value at the same time, ensuring employees achieve individual goals while
also making meaningful contributions to society. This foundation of excellent corporate value
and sustainable leadership positions us for enduring success.
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OUR STRATEGIES
We drive the development of our business through the following strategies:
Pioneering Technology Innovation Across the Value Chain
We are committed to advancing our R&D activities at the forefront of the industry, with
a focus on increasing investments in R&D of smart solutions to elevate productivity. Our R&D
efforts will focus on applying digitalization and advanced technologies along the hog farming
industry value chain, establishing a hog farming ecosystem connecting agricultural planting,
feed production, hog breeding, hog farming, slaughtering and meat product processing, smart
equipment and synthetic biology. Specifically, our key R&D areas are as listed below:
 Upgrading our hog breeding capabilities and improving the quality of our breeding
hogs with advanced genetic selection technology;
 Enhancing our hog health management capabilities with smart equipment and
advanced technologies;
 Further enhancing automation in the slaughtering processing with smart tools;
 Establishing a closed-loop management system powered by data-driven decision-
making tools;
 Advancing R&D efforts in the area of feed ingredient alternatives through
collaborations with academic institutions; and
 Increasing investments in ESG innovations, including water-saving technologies,
manure/urine recycling schemes and renewable energy applications.
Strategic Global Expansion and Market Diversification
We plan to gradually expand our business globally, deploying our advanced technologies
and smart hog farming equipment as entry points in key overseas markets with high pork
consumption volume. We plan to gradually establish localized R&D centers and production
bases in the high-potential markets, enhancing our competitiveness globally. In particular, we
intend to leverage the advanced farming technologies, production equipment and management
expertise developed through decades of operations in China, and apply them in overseas
markets. We will diversify our supply chain layout globally while collaborating with
international hog breeding specialists to enhance our breeding capabilities and commercialize
our breeding technologies worldwide. We plan to adapt our expansion plans into various local
markets through targeted mergers and acquisitions and/or joint ventures, exporting our
innovative hog farming solutions. We aim to integrate resources and technologies worldwide,
incorporating best practices into our operations and enhancing our cost management
capabilities.
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Optimizing Our Vertically-Integrated Business Model
We plan to expand our business presence in the downstream of the industry value chain.
We will continue to optimize the operational efficiency and production utilization of our
slaughtering plants and strengthen the profitability of our slaughtering and meat product
business. In addition, we aim to achieve higher slaughtering self-sufficiency rates leveraging
the quality supply from our hog business. We also plan to expand and diversify our sales
channels for meat products, such as supermarkets, chain restaurants and food processors,
aligning our planned production capacity with the market demand. Through production facility
upgrades and targeted R&D, we will further diversify our meat product portfolio, such as
customized meat products and value-added pork-cut products (e.g. packaged pork slices,
dry-aged pork products and seasoned pork products). Leveraging our integrated business model
and adopting a consumer-centric approach, we aim to lead the evolution of meat products and
capture opportunities in the hog slaughtering and processing industry.
Building Collaborative Hog Farming Ecosystems
Leveraging our industry-leading expertise in hog breeding, feed formulation, biosecurity,
odor control solutions and environmentally sustainable operations, we are building a
collaborative ecosystem by empowering local hog farmers. Through this collaborative hog
farming ecosystem, we capitalize on emerging opportunities from industrial integration. For
instance, by leveraging our premium reserves of high-quality piglets and breeding hogs, we
aim to expand our piglet sales to local hog farmers. Additionally, we plan to introduce both
technical know-hows and operational best practices to farmers, and we have commercialized
our solutions for ammonia reduction and deodorization used in the livestock farming to such
collaborative farming ecosystem. We believe such an innovative cooperation model foster
mutual value creation by enhancing productivity, sustainability and profitability across the hog
farming ecosystem.
Developing World-Class Talent and Organizational Advancement
Guided by our “people-oriented” management philosophy, we remain committed to
building up our talent pipeline through internal promotions. With proper compensation systems
and multi-tiered employee training schemes, we have been particularly focusing on the
investment on our young and high-potential leaders, ensuring seamless transition of leadership
to the next generation. With the goal of building structured leadership pipelines, we promote
our international recruitment, strengthening our market competitiveness. By fostering a
value-driven corporate culture, we will enhance employee engagement, enabling us to attract,
retain and develop world-class talent.
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BUSINESS MODEL AND PRODUCTS
We operate through two main business segments, namely: (i) our hog business, where we
farm and sell finished hogs, piglets and breeding hogs; and (ii) our slaughtering and meat
product business, which includes hog slaughtering and the sale of carcasses, pork cuts and
by-products. Our major products include hogs, namely finished hogs, piglets and breeding
hogs, as well as fresh and frozen meat products.
With over 30 years’ experience, we adopt a vertically-integrated business model that
spans the entire upstream and downstream of our industry, including hog breeding, hog
farming, feed production, slaughtering and sales of hogs and meat products. Through our
self-operated hog business and slaughtering and meat product business, we are able to maintain
full transparency, quality control and traceability over the entire production process, which in
turn allows us to ensure food safety and provide quality hogs and meat products to our
customers.
The chart below illustrates our vertically-integrated business model:
Hog dealers and
direct sales customers
Slaughtering and
meat product
business
Hog business
Slaughtering
Cutting and packaging
Wholesale market customers
and direct sales customers
Breeding
Gestation and
farrowing
Nursing
Fattening
Feed formulation
R&D
Feed productionFeed ingredients
Hog Business
Our hog business includes feed production, hog breeding, hog farming, and the sale of
finished hogs, piglets and breeding hogs. According to Frost & Sullivan, since 2021, we have
ranked first globally in the hog farming industry in terms of production capacity and sales
volume of hogs for four consecutive years. Our global market share, measured by sales volume
of hogs, increased from 2.6% in 2021 to 5.6% in 2024, exceeding the total of the players ranked
second to fourth in 2024. In 2024, we had the largest hog production capacity worldwide with
81.0 million heads, according to the same source.
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We sell finished hogs as our main product under our hog business. In 2022, 2023, 2024
and the nine months ended September 30, 2024 and 2025, the revenue from the sales of
finished hogs (before inter-segment elimination) accounted for 92.8%, 96.5%, 95.2%, 94.1%
and 92.5% of the total revenue, respectively. Finished hogs generally reach a weight of around
120kg when they are ready for sale. In addition, we sell piglets and breeding hogs. We
dynamically adjust the proportion of sales of piglets and finished hogs to optimize our
profitability, primarily considering market demand, market prices, and our operational and
production plans.
Piglets Finished Hogs Breeding Hogs
Slaughtering and Meat Product Business
Our slaughtering and meat product business includes hog slaughtering and sales of fresh
and frozen meat products. Our meat products can be further divided into three main categories,
namely, carcasses, pork cuts and by-products. According to Frost & Sullivan, we ranked fifth
globally and first in China in hog slaughtering and processing industry in terms of slaughter
volume in 2024. We made such achievement within a short period since we initially started the
business in 2019 with our lead over the second-ranked company continuing to grow. In
addition, we recorded the highest revenue CAGR from 2022 to 2024 among large-scale
Chinese hog slaughtering and processing companies.
Carcass Pork cuts By-products
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Key Metrics
The following table sets forth a breakdown of our revenue by business segment, in
absolute amounts and as percentages of our total revenue, for the periods indicated:
Y ear ended December 31, Nine months ended September 30,
2022 2023 2024 2024 2025
Amount % Amount % Amount % Amount % Amount %
(RMB in millions, except percentages)
(Unaudited)
Hog business /H1118/H1118/H1118119,744.0 95.9 108,224.3 97.6 136,229.3 98.7 95,356.7 98.5 109,516.0 98.0
— Finished hogs /H1118/H1118115,896.5 92.8 106,975.5 96.5 131,306.7 95.2 91,096.0 94.1 103,391.1 92.5
— Piglets /H1118/H1118/H1118/H1118/H11182,860.1 2.3 705.6 0.6 3,080.0 2.2 2,639.4 2.7 4,872.0 4.4
— Breeding hogs /H1118/H1118 987.4 0.8 543.2 0.5 1,842.6 1.3 1,621.3 1.7 1,252.9 1.1
Slaughtering and
meat product
business /H1118/H1118/H1118/H1118/H111814,718.1 11.8 21,862.3 19.7 24,273.6 17.6 15,881.0 16.4 31,812.7 28.5
Inter-segment
elimination
(1) /H1118/H1118(15,634.2) (12.5) (22,793.0) (20.5) (24,435.8) (17.7) (15,632.4) (16.1) (32,708.6) (29.3)
Subtotal /H1118/H1118/H1118/H1118/H1118/H1118118,827.9 95.2 107,293.6 96.8 136,067.1 98.6 95,605.3 98.8 108,620.1 97.2
Others (2) /H1118/H1118/H1118/H1118/H1118/H11185,998.3 4.8 3,567.1 3.2 1,879.8 1.4 1,169.8 1.2 3,169.9 2.8
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118124,826.2 100.0 110,860.7 100.0 137,946.9 100.0 96,775.1 100.0 111,790.0 100.0
Notes:
(1) The amounts of inter-segment elimination during the Track Record Period indicated the elimination of
revenue arising from the intra-group sales transactions between the hog business and the slaughtering
and meat product business. In accordance with relevant PRC tax laws and regulations, the revenue from
our hog business is exempt from V A T, whilst our slaughtering and meat product business is entitled to
input V A T in relation to its procurement of hogs. As such, the corresponding operating costs in relation
to our slaughtering and meat product business are recorded based on the sales amount of these
intra-group transactions after deducting input V A T.
(2) Others mainly comprise revenue from feed ingredients trading mainly including corn, wheat and
soybean meal, and other operating activities such as sales of feed and pig manure.
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The following table sets forth key operational metrics of our key products for the periods
indicated:
Y ear ended December 31,
Nine months ended
September 30,
2022 2023 2024 2024 2025
Sales of hogs (thousand
heads) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111861,201 63,816 71,602 50,144 69,234
– Finished hogs (1) /H1118/H1118/H1118/H1118/H1118/H1118/H111855,296 62,267 65,477 45,132 57,323
– Piglets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185,558 1,367 5,659 4,607 11,571
– Breeding hogs /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118346 181 465 405 340
Sales of meat products
(thousand tons) /H1118/H1118/H1118/H1118/H1118/H1118/H1118757 1,405 1,416 916 2,144
Note:
(1) The sales of finished hogs include the internal sales of finished hogs to our slaughtering and meat
product business, which amounted to 7,368 thousand heads, 13,266 thousand heads, 12,565 thousand
heads, 7,977 thousand heads and 19,135 thousand heads, respectively, in 2022, 2023, 2024 and the nine
months ended September 30, 2024 and 2025.
HOG BUSINESS
With over 30 years’ expertise in the hog industry, we have established comprehensive
operations that encompasses hog breeding, hog farming, feed production and the sale of hogs.
Our main products under this business include finished hogs, piglets and breeding hogs.
Leveraging advanced technologies and smart equipment applied in every aspect of our hog
business, we are able to mass produce hogs with improving genetic traits and good health. In
2022, 2023, 2024 and the nine months ended September 30, 2024 and 2025, we sold
approximately 61.2 million, 63.8 million, 71.6 million heads, 50.1 million heads and 69.2
million heads of hogs, respectively. Our revenue from the hog business (before inter-segment
elimination) amounted to RMB119,744.0 million, RMB108,224.3 million, RMB136,229.3
million, RMB95,356.7 million and RMB109,516.0 million in 2022, 2023, 2024 and the nine
months ended September 30, 2024 and 2025, respectively, accounting for 95.9%, 97.6%,
98.7%, 98.5% and 98.0% of the total revenue for each period. In 2022, 2023, 2024 and the nine
months ended September 30, 2024 and 2025, the average selling prices of our hogs (excluding
tax) were approximately RMB1,956.6 per head, RMB1,695.9 per head, RMB1,902.6 per head,
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RMB1,901.7 per head and RMB1,581.8 per head, respectively. The following table sets forth
the average selling prices of our hog products by product type for the periods indicated:
Y ear Ended December 31,
Nine months ended
September 30,
2022 2023 2024 2024 2025
Finished hogs (RMB/head) /H1118 2,095.9 1,718.0 2,005.4 2,018.4 1,803.7
(RMB/kg) /H1118/H1118/H111818.0 14.5 16.3 16.4 14.2
Piglets (1) (RMB/head) /H1118/H1118/H1118/H1118/H1118514.5 516.2 544.2 572.9 421.0
Breeding hogs (1)
(RMB/head) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,854.4 2,997.8 3,961.2 3,999.8 3,687.4
Note:
(1) The selling prices of piglets and breeding hogs are primarily determined by qualitative factors, including
their breed (such as first generation breeding pig, binary crossbred sow), health condition and genetics
(such as the production performance of the parent stock), rather than their weights.
According to Frost & Sullivan, the hog market in China is primarily influenced by the
changes in the supply and demand of hogs, which are in turn affected by various factors,
including the biological production cycle, animal diseases and government policies. The
outbreak of animal diseases in 2018 significantly disrupted hog supply, driving a substantial
increase in hog price that peaked in 2020. As the national hog production capacity gradually
recovered in the following years, the increasing supply resulted in a decline in hog prices,
which reached a cyclical low in 2023. In light of the recovery in both hog price and hog
production capacity in 2024, combined with the biological growth cycle of hogs, hog supply
gradually became ample in late 2024 and 2025. Against a backdrop of relatively stable demand,
this supply-demand dynamic exerted downward pressure on hog prices in 2025.
The average selling price (RMB per head) of our finished hogs during the Track Record
Period was closely correlated with (i) the average weight per hog; and (ii) market selling prices
of hogs (RMB per kg), which declined in 2023 and 2025. The sales volume of our finished hogs
increased steadily throughout the Track Record Period, driven by our strategic capacity
expansion and operational scaling. Despite the inherent cyclicality of hog price, we remain
focused on enhancing our operational efficiency and reducing costs through technological
innovation. For example, we have further enhanced our breeding efficiency by adopting
data-driven genetic evaluation and selective breeding to improve herd performance. In
addition, we flexibly adjust feed formulas and sourcing plans in response to raw material
fluctuations, which enables us to manage overall production costs. Through the integration of
AI and IoT technologies in our hog farming and hog health management process, we are able
to reduce labor costs and improve hog health, thereby enhancing hog farming efficiency. We
also have strengthened automated management to improve productivity and control operation
costs. All these measures enable us to effectively manage costs and maintain competitiveness
amid the cyclical nature of the hog industry.
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The average selling price of our piglets and breeding hogs was primarily affected by the
supply and demand in the market. As a result of a decline in the national inventory of
productive sows in 2023, there was a shortage in supply of piglets and breeding hogs in 2024,
driving up the average selling price of our piglets and breeding hogs in 2024. The sales volume
of piglets and breeding hogs declined in 2023, primarily attributing to the overall market
downturn, characterized by depressed hog prices. Hog farmers were reluctant to expand hog
production capacity with additional piglets and breeding hogs during the market downturn,
while we were able to flexibly adjust our sales volume of piglets and breeding hogs leveraging
our integrated operation model.
The changes in the supply and demand of hogs materially affected the hog price cycle in
China as well as our operating results during the Track Record Period, especially in 2023.
Hog Farms
We have established an extensive network of hog farms. As of September 30, 2025, we
operated over 1,000 hog farms across 23 provinces in China. As of the Latest Practicable Date,
we had a supreme breeding platform under construction in Zhengzhou, with approximately 100
thousand reproductive sows, which is expected to commence full operations in mid-2026. We
strategically locate our hog farms by considering multiple factors including local raw materials
availability, water resources, environmental conditions, sales network accessibility, and
regulatory requirements.
To optimize productivity and hog quality, we raise our hogs in the hog houses that are
specifically designed by considering optimal temperature, humidity and ventilation standards
for different growth periods while ensuring animal welfare. Additionally, our hog houses are
equipped with effective disease prevention mechanisms and proprietary smart systems to
ensure hog well-being and improve operational efficiency. For instance, we generally equip our
hog houses with a four-stage air filtration system: the first stage filter blocks objects such as
flies and willow catkins; the second stage filter effectively captures floating, visible dust in the
air; the third stage filter effectively intercepts particles above 5µm, and the fourth stage filter
blocks particles above 0.3µm in the air. The four-stage air filtration system efficiently removes
viruses and bacteria by filtering the aerosols containing particles of smaller molecules such as
viruses of porcine epidemic diarrhea, Porcine Reproductive and Respiratory Syndrome (PRRS)
and African Swine Fever. Additionally, our hog houses are equipped with precision ventilation
systems, which ensure that filtered air is distributed evenly throughout all areas of the hog
houses. These systems are designed to eliminate risks of cross-contamination between different
units, enabling us to significantly reduce disease-related losses and improve operational
efficiency. We conduct regular maintenance and timely upgrades of our hog farms to ensure
efficient operations and a healthy environment for hogs. For details of other advanced
technologies and smart equipment utilized in our hog houses, see “— Smart Hog Farming” and
“— Case Study: Neixiang Muyuan Pork Industry Complex.”
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As a testament to our advanced hog farming practice, a number of our hog farms have
received prestigious recognitions such as “National Core Breeding Farm for Hogs (͛ሥ
ːԃ၇ఙ)” and “Standardized Hog Farming Demonstration Farm ( ͛ሥᅺ๟ʷͪᇍఙ)”
issued by the MARA. Additionally, some of our hog farms have been accredited with China
GAP certification.
The following table sets forth our hog production capacity and sales volume for the
periods indicated during the Track Record Period:
Y ear ended December 31,
Nine months ended
September 30,
2022 2023 2024 2024 2025
Production capacity
(thousand heads) (1) /H1118/H1118/H1118/H1118/H111874,300 79,990 81,010 80,863 82,645
Sales volume (thousand
heads) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111861,201 63,816 71,602 50,144 69,234
– Finished hogs (2) /H1118/H1118/H1118/H1118/H1118/H1118/H111855,296 62,267 65,477 45,132 57,323
– Piglets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185,558 1,367 5,659 4,607 11,571
– Breeding hogs /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118346 181 465 405 340
Note:
(1) Represents the theoretical maximum number of hogs that could be sold from our hog farms based on
the estimated number of hog houses available in our hog farms by their standard capacity and estimated
hog farming turnover rate.
(2) The sales of finished hogs include the internal sales of finished hogs to our slaughtering and meat
product business, which amounted to 7,368 thousand heads, 13,266 thousand heads, 12,565 thousand
heads, 7,977 thousand heads and 19,135 thousand heads, respectively, in 2022, 2023, 2024 and the nine
months ended September 30, 2024 and 2025.
Hog Farming Process
Our hog farming operation covers the entire life cycle of hogs from breeding, gestation,
lactation, nursing and finishing. Our integrated business model enables us to ensure
biosecurity, reduce the risk of disease outbreaks and optimize hog health management.
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The following chart illustrates the typical life cycle of hogs:
After about 114 days, the sows
give birth to piglets.
After the sows are selected and kept in
quarantine until 190~210 days of age, they
start mate and breed.
The hogs are fed for about
100~120 days (the hogs
weigh around 120kg) and
are ready for sale.
After about 54 days of nursing,
the piglets will be transferred to
finishing houses.
The lactation period lasts for 21 to 25 days
after the sows giving birth to piglets.
After the piglets weigh
6-7kg, they are weaned and ready to
be transferred to the nursing room.
Gestation period Sow quarantine
period
Finished hogsFinishing
period
Nursing
period
Lactation
period
The following table sets forth the volume of our biological assets as of the dates
indicated:
As of December 31,
As of
September 30,
2022 2023 2024 2025
(thousand heads)
Consumable biological
assets
Suckling piglets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185,406 4,884 5,696 6,660
Piglets under nursing period /H1118 11,179 12,200 13,636 13,527
Hogs under finishing period /H1118 16,055 18,353 23,091 22,884
Subtotal /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111832,639 35,436 42,423 43,071
Productive biological
assets (1) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,769 4,703 5,062 4,404
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111836,408 40,139 47,485 47,475
Note:
(1) Productive biological assets include immature breeding hogs and mature breeding hogs. Mature
breeding hogs are reproductive sows and boars.
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Breeding
Leveraging our competitiveness in our breeding and production systems, breeding
nucleus herd selection mechanism and breeding technologies, we have built a breeding hog
population that stands out for its improving genetic traits, high consistency, adaptability and
strong economic performance. We focus on catering to the needs of customers by prioritizing
key traits in hog production such as meat quality, carcass traits, reproductive performance and
growth efficiency. These objectives and our efforts in breeding provide a solid foundation for
our large-scale hog production.
Our Breeding and Production Systems
We have maintained the two-breed rotational cross system for over 20 years, which is
designed to maintain the traits across generations through controlled crossbreeding.
Additionally, we also apply the three-breed production system based on our operational plans
and market demands. Both systems enables us to produce robust and high-quality hogs on a
sustainable basis.
The following diagrams illustrates the breeding process for our breeding and production
systems:
Landrace
Landrace
Two-breed
cross sows
Two-breed
rotation
(depending on traits)
Yorkshire
Yorkshire
or
Two-breed Rotational Cross System
Great Grandparent
Generation
Grandparent
Generation
Parent
Stock
Commercial
Stock
Great Grandparent
Generation
Three-breed Production System
Grandparents
Generation
Parent
Stock
Commercial
Stock
Landrace
Two-breed
cross sows
Three-breed
cross hogs
DurocYorkshire
Landrace Duroc Yorkshire
In particular, under the two-breed rotational cross system, we select reproductive sows
with high litter size and lean meat rates from the two-breed sows we have produced. This
approach allows each generation of sows to keep their crossbreeding advantages, especially the
traits with low heritability, such as stronger fertility and better adaptability. As such, the
two-breed sows could either become reproductive sows or be raised as finished hogs, which
helps us to reduce the production cost of reproductive sows by supplementing the reproductive
sows with our own supply. Leveraging our two-breed rotational cross system, we have been
able to maintain the supply of reproductive sows needed for production capacity growth,
significantly increasing our piglet sales and reducing the risks of disease transmission during
the introduction of external breeding hogs. On the other hand, we may adopt the three-breed
production system in response to market demand. Benefiting from such flexibility, we have
maintained rapid business growth over the past few years.
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Our Breeding Nucleus Herd
We apply a strict selection mechanism for our breeding nucleus herd, comprising
purebred Y orkshire, purebred Landrace and Duroc, focusing primarily on their reproductive
performance, growth rate, carcass traits and meat quality. Our veterinary team is responsible
for examining the breeding hogs to ensure that they meet health standards for breeding. Our
breeding hogs have a depreciation period of 30 months. In particular, we consider a series of
factors when replacing a reproductive sow, including its estrus cycle, number of miscarriages,
delivery numbers, the mortality rate of suckling piglets or weaners and genetic issues.
Breeding Technologies
Over the years, leveraging the vast hog performance data from our farming operations, we
run our breeding system in a highly efficient and precise manner, assessing and documenting
the production capability and characteristics of each breeding hog. In addition, we have
adopted the latest technologies and scientific and statistical tools to continuously identify
top-performing hogs. Through cutting-edge breeding methods, we incorporate those top-
performing hogs into our core and multiplier herds, driving efficient genetic selection. For
example, we use B-ultrasound testers to measure the loin eye area, which helps us to determine
the lean meat percentage and the intramuscular fat content of each breeding hog. We also apply
the BLUP approach, a statistical method that uses performance and pedigree data to assess and
predict an animal’s genetic potential by separating genetic effects from environmental
influences, for genetic performance evaluation. By leveraging these techniques and scientific
and statistical tools, we are able to consistently enhance the reproductive performance of our
breeding nucleus herd, improve breeding efficiency and ultimately meet market demand for
high-quality meat products.
Gestation and Lactation
The gestation period for sows typically lasts around 114 days. Pregnant sows are
transferred to farrowing stalls to prepare for farrowing. After 21 to 25 days of birth, newborn
piglets are weaned and transported to nursing hog houses.
Nursing
Piglets are transferred to and kept in the nursing hog houses for around 54 days. We
divide the nursing hog houses into small units with an all-in, all-out production model, where
piglets from the same batch are kept and transferred together from gestation to the finishing
houses. This model facilitates our quality tracking system, minimizing bio-risk during the
transfer process.
We keep track of the conditions of the piglets under nursing period and provide them with
health supplements and vaccines regularly. As piglets are more susceptible to diseases during
the nursing period, we meticulously design our nursing hog houses to ensure their well-being.
For example, we have implemented a number of advanced systems that integrate big data tools,
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IoT technology, smart equipment and smart solutions. With these advanced technologies, we
are able to collect data from over 2.3 million connected devices and process over one billion
data on a daily basis. This approach helps us realize the 24/7 monitoring of hog health, which
further enables us to respond swiftly to potential hog health issues. See “— Smart Hog
Farming.”
Finishing
The hogs under finishing period typically stay at finishing hog houses for approximately
100 to 120 days, where they grow to around 120kg and become ready for sale. We have
upgraded the layout of our finishing houses to incorporate a zoned management approach,
which allows us to minimize cross-contamination risks.
Our advanced hog houses are designed to provide hogs with clean, comfortable and
healthy living environment, which ensures their welfare while reducing our labor costs and
improving productivity. For instance, our finishing houses are equipped with our smart feeding
system, which automatically load, mix and deliver feed to the finishing houses. Connected to
multiple feeding points in each hog houses, the delivery pipes automatically supply feed in
pre-determined amounts. We also employ high-temperature sterilization of feed, sealed
pipe-chain transport systems, ultrafiltration for water disinfection and automated inspection
and alarm systems to achieve comprehensive monitoring of hog health. These automated and
smart feeding facilities save labor costs, reduce waste and improve our operational efficiency.
We closely monitor, analyze and acquire real-time data on the feed quality, feeding conditions
and hog growth performance to maintain a precise supply of quality feed. Driven by our
improved hog farming technologies and optimized management, during the Track Record
Period, our average total unit cost decreased from RMB15.72 per kg in 2022 to RMB14.94 per
kg in 2023, then decreased to RMB14.01 per kg in 2024, and further to RMB12.19 per kg for
the nine months ended September 30, 2025, outperforming the industry average, according to
Frost & Sullivan.
Feed Production
We have established our own feed production factories for in-house feed production, and
developed feed formulations tailored to the needs of hogs at different growth periods. Our feed
production factories are typically located according to the distribution and scale of our hog
farms. For regions with dispersed hog farms, we establish centralized feed production factories
to service the corresponding regions to ensure efficient supply and lower transportation costs.
For large scale or geologically isolated hog farms, feed production factories are set up next to
those hog farms so as to provide timely and stable feed supply. The majority of feeds are
produced in-house. We primarily procure feed ingredients from third-party suppliers, and to a
less extent, some feed ingredients were produced in-house. We maintain a certain inventory
level of feed ingredients, such as corn, wheat, grain mixtures and soybean meal, as well as
other supplements, including vitamins and minerals, to produce feed. As corn, wheat and
soybean meal are our primary feed ingredients and the prices of these commodities are subject
to fluctuations, we engaged in feed ingredients trading and sold part of our inventories of these
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feed ingredients from time to time when market prices rose above our procurement prices. In
2022, 2023, 2024 and the nine months ended September 30, 2024 and 2025, our feed
production volume reached 20.4 million tons, 23.2 million tons, 25.3 million tons, 18.0 million
tons and 20.7 million tons, respectively. According to Frost & Sullivan, we were among the top
three feed producers in terms of the production volume in China in 2024. During the Track
Record Period, the hog feeds we produced in-house were able to meet nearly all of the feeds
demand for our own hog farming.
Since 2000, we have led the industry in developing and using optimized soybean meal
feed formulations, which are able to improve utilization efficiency of feed ingredients and
optimize cost structure, while maintaining sufficient nutrition supply for hogs of different
growth periods. According to Frost & Sullivan, in 2024, soybean meal accounted for
approximately 10-17% of feed ingredients for the commonly seen feed formulations in the
industry, compared to 7.3% in our optimized soybean meal feed formulations. This strategic
innovation has delivered consistent cost saving benefits: our feed cost per head of finished hogs
decreased from RMB1,088 in 2022 to RMB994 in 2024, and further decreased to RMB894 in
the nine months ended September 30, 2025, reinforcing our feeding efficiency and overall
profitability.
To ensure the supply of all essential nutrients and energy in adequate proportions in the
feed, we formulate the diets in a period-specific manner, setting precise nutritional standards
according to hog growth periods and hog types on a daily basis. Through the adoption of (i)
a factor analysis approach where we break down the total nutritional requirements of hogs by
needs under various physiological processes such as maintenance, growth, reproduction and
lactation, and (ii) mathematical models, we adjust the proportions of feed ingredients on a daily
basis and develop formulations for hogs at different growth period in a precise manner.
We have realized automatic production of the whole process in feed processing.
Following the procurement of the feed ingredients, they are transported from the warehouse to
the feed production area to be puffed, grounded and mixed based on the feed formulation.
Additionally, additives such as amino acids, minerals and vitamins are added to meet
nutritional requirements. All feed produced is sterilized through a high-temperature
sterilization process with the temperature being monitored, analyzed, and processed in real
time to ensure effective sterilization. After being sterilized, feed is cooled through three-stage
filtered cooling air before being transported to centralized hog farms.
Hog Health Management
Hog health is an important factor that determines hog growth rates, survival rates and
pork quality. We had a professional veterinarian team who are responsible for formulating the
response plans for disease prevention, sanitation, disinfection, quarantine and deworming of
the hog farms. We have professionals regularly test the antibody level of our hogs, formulate
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reasonable immunization procedures and regularly assess the health status of the hogs at
different stages. Through partnerships with academic institutions and global experts, we
continually adopt and implement the latest technologies and practices to enhance our hog
health management.
We have developed the “SkyNet Project,” a comprehensive disease prevention and control
system grounded in extensive research into the causes of hog diseases. This initiative focuses
on identifying and addressing the viruses, bacteria and parasites that lead to illnesses in hogs.
By integrating advanced environmental control systems, biosecurity protocols and
immunization management practices, we aim to significantly reduce disease throughout the
whole hog farming process. Additionally, we utilize big data tools, IoT technology and smart
equipment to comprehensively support the implementation of our “SkyNet Project”. For
example, our smart equipment track indicators such as coughing rates and feed consumption,
while IoT-supported systems enable remote control of ventilation, feeding, and medication to
ensure timely and effective health management. Through those aforementioned hog health
management measures, we have achieved industry-leading survival rates among large-scale
hog farms, with our PSY reaching around 28 and the average daily weight gain of our hogs
under finishing period reaching approximately 841g, in the nine months ended September 30,
2025, according to Frost & Sullivan. Specifically, our hog health management is primarily
supported by the following systems:
 Comprehensive biosecurity management system : We implement an advanced
biosecurity management system that includes air filtration, exhaust sterilization,
precise ventilation, and zoned management. This creates an isolated biosecurity
island between hog houses, production units, and zones. By monitoring 15 key risk
points such as personnel, vehicles, and materials in real time, we ensure
comprehensive disease prevention and control. For breeding and cross-farm
transfers, we use fully sealed vehicles with air filtration to prevent disease
transmission during transport. In addition, we have established hygiene facilities at
critical entry and terminal points of our operations.
 Advanced inspection system : Our hog health inspection system ensures traceability
by managing sampling, testing, and results in real time and enables real-time
monitoring of health indicators such as body temperature and coughing. We operate
a “central + satellite laboratory” model to deliver diagnostic results within six hours
after samples are taken. Farm staff can access this system to monitor hog health and
take measures if necessary, enabling early detection, diagnosis, and intervention.
 Unmanned transport system : We have gradually implemented our unmanned
transport system at some of our hog farms to enhance operational efficiency and
biosecurity management. Our unmanned transport system uses driverless vehicles
for disinfection, material delivery, hog transfer, and disposal, reducing the
possibility of potential pollution.
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Building on our biosecurity protocols, real-time hog health monitoring and
comprehensive disease prevention measures, we manage to effectively improve the well-being
of our hogs. According to Frost & Sullivan, in 2022, 2023, 2024 and the nine months ended
September 30, 2025, our hogs achieved industry-leading average daily weight gain of 724g,
803g, 792g and 841g, respectively. According to the same source, in 2022, 2023, 2024 and the
nine months ended September 30, 2025, the survival rates of our hogs reached 81.8%, 85.0%,
82.1% and 85.0%, respectively, while the industry average during the Track Record Period was
generally lower than 80%, which further demonstrated the effectiveness of our robust hog
health management system.
Smart Hog Farming
We strongly value the R&D on smart hog farming, and have prioritized technological
innovation as the cornerstone of our development. We have accumulated extensive expertise
and experience since our inception, and our R&D team has continually advanced and refined
our technologies, equipment and design capabilities.
Leveraging big data tools, technology and smart equipment, we have gradually digitalized
the whole process of hog farming by developing key technologies for hog farming, hog house
environment control, and hog health management. V arious smart systems have been applied to
each process of hog farming, improving our management efficiency and strengthening our
competitive advantages in the industry. Some of our key achievements in smart hog farming
are set forth as below, which are connected to each other supported by our self-developed
algorithms.
Smart Feeding System
Our smart feeding system is designed to collect data in relation to feed intake and water
consumption and is able to optimize the hog feeding process, allowing for real-time monitoring
and precise management of feeding. In addition, our smart feeding system automatically
adjusts the amount of feed based on the hogs’ age and weight, ensuring they receive the precise
nutrition while optimizing cost structure. Meanwhile, this system provides real-time feedback
to our feed production staff, enabling dynamic adjustments to feed production and further
ensures balanced feed formulation and the well-being of hogs. We also apply automatic
facilities to feed production such as sampling of raw grain, weighing, and automatic hydraulic
rear dump trucks to realize full automation, reducing manual labor and improving production
safety. As such, our feeding process has been automated and standardized, which ensures
consistency and accuracy.
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Smart Hog House Environment Control System
Leveraging IoT technology, our smart hog house environment control system is designed
to monitor the whole hog farming process on a real-time basis and seamlessly control
production equipment, such as the sprinklers, sliding windows, fans and heating lamps. For
example, it can intelligently change the configuration of the hog house ventilation system to
adjust airflow suitable for hogs of different growth periods. Additionally, we have widely used
various unmanned vehicles in our hog farming operations featuring driverless disinfection,
material delivery, hog transfer and harmless treatment, ensuring biosecurity by limiting human
movement and ensuring standardized operations through automated processes.
Smart Hog Health Management System
We prioritize the health of our hogs through the integration of advanced technologies and
innovative practices. Our smart hog health management system ensures animal welfare and
enhances disease prevention throughout all hog farming processes. Specifically, our inspection
system operates 24/7 and is designed to conduct hog health monitoring. Equipped with
advanced sensors for visible light, infrared, sound and gas monitoring, the system collects data
in relation to hog house conditions and hog health conditions. For example, we use infrared
cameras to monitor the body temperature of the hogs, fisheye cameras to count the number of
hogs, and visible light sensors to identify the lying position, coat color, and skin tone of the
hogs. These data are processed through our self-trained algorithm based on our own data to
generate real-time hog health indicators, issue early warnings, enhancing smart decision-
making in our operations. We also use smart sound sensing devices to monitor and analyze hog
vocalizations to detect abnormal health conditions, such as coughing and sneezing. Our smart
hog health management system is able to provide smart diagnoses in real time, provide alerts
to staff for potential health issues and track recovery progress after treatment. Additionally, our
smart feeding system also transfers feeding data to the smart hog health management system
to detect health concerns, enabling prompt isolation and treatment. Together, these innovations
allow us to provide end-to-end health management, ensuring efficient operation.
Hog Farming IoT-and-Cloud System
We have established an IoT-and-Cloud system to interconnect data flows among the
feeding, environmental control, inspection, raw material sterilization, cleaning production, and
electric power systems of the hog farms, creating a cloud-based system managing multiple
operation sectors. Our collected data from hog houses relating to hog farming are uploaded to
the IoT-and-Cloud system for centralized data processing. Our staff can adjust the
environmental parameters such as temperature, humidity and light in hog houses through
mobile devices and computers. Our system manages over 2.3 million devices and collects over
one billion data thereof relating to hog farming every day to support our daily hog farming.
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Specifically, our IoT-and-Cloud system primarily contains modules such as
environmental control, feeding management, auto inspection, veterinary service and
biosecurity management. In addition, it features power and water management that helps us
optimize electricity use and water consumption.
Case Study: Neixiang Muyuan Pork Industry Complex
Our Neixiang Muyuan Pork Industry Complex (the “ Neixiang Complex ”), a project that
integrates feed production, hog farming and slaughtering and meat product production, started
operations in 2020. The Neixiang Complex has 21 multi-storey hog houses with a hog
production capacity of 2.1 million heads per year. It also has an feed production factory with
an annual production capacity of 720,000 tons of feed. In 2024, our Neixiang Complex was
selected as the “National Smart Agriculture Development Model Case” by the MARA.
In the Neixiang Complex, we have replaced the traditional single-story hog farms with
multi-storey hog houses in order to improve operational efficiency and land use efficiency,
promote manure and waste recycling and ensure biosecurity. Each building is equivalent to a
traditional hog farm with the annual hog production capacity of approximately 100,000 heads.
The first to third floors are finishing houses. The fourth floor is a nursing hog houses. The fifth
to sixth floors are the pregnancy and lactation houses, providing space for over 4,000
reproductive sows.
We are committed to creating a healthy environment to improve hog health, while
optimizing cost structure. Our advanced cost management serves as the basis for our rapid
business expansion. Centralized hog farming allows us to enhance health management and
animal disease prevention. Our latest and innovative equipment in relation to production
management, feed supply, hog health management and manure treatment are applied in the hog
houses, improving production efficiency and ensuring hog health.
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SLAUGHTERING AND MEAT PRODUCT BUSINESS
We started our slaughtering and meat product business in 2019. We offer meat products
which primarily include carcasses, pork cuts and by-products. Our slaughtering and meat
product business benefits from a reliable supply of our self-produced finished hogs. We believe
that establishing the slaughtering and meat product business is an organic development from
our hog business, allowing us to capture greater market opportunities along the value chain. We
standardize the production processes to ensure consistency of quality of our meat products. In
2022, 2023, 2024 and the nine months ended September 30, 2024 and 2025, we sold 757
thousand tons, 1,405 thousand tons, 1,416 thousand tons, 916 thousand tons and 2,144
thousand tons of meat products, respectively. According to Frost & Sullivan, we ranked fifth
globally and first in China in the hog slaughtering and processing industry in terms of slaughter
volume in 2024. The revenue from our slaughtering and meat product business (before
inter-segment elimination) amounted to RMB14.7 billion, RMB21.9 billion, RMB24.3 billion,
RMB15.9 billion and RMB31.8 billion in 2022, 2023, 2024 and the nine months ended
September 30, 2024 and 2025, respectively, accounting for 11.8%, 19.7%, 17.6%, 16.4% and
28.5% of the total revenue for each period respectively. The revenue from our slaughtering and
meat product business increased significantly in the nine months ended September 30, 2025,
primarily due to an increase in sales volume of meat products and the expansion of our
customer base. During the same period, our slaughter volume also increased significantly to
19,164 thousand heads.
The table below sets forth details of our key meat products:
Products Picture Details
Carcass /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
 After slaughtering, the carcasses are
processed by removing the head,
hooves, internal organs and other
parts. Carcasses usually account for
70% to 75% of the total hog weight.
Pork cuts /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Based on customer demand, we further
process carcasses into various cuts,
including pork belly, ordinary ribs,
tenderloin, collar meat, pork
drumsticks and blade bone, among
others.
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Products Picture Details
By-products /H1118/H1118/H1118/H1118/H1118/H1118
 We also process and sell pork by-
products to meet customer demand,
which mainly include pig feet,
chitterlings, pig hearts, pig kidneys,
pig ears and pig tripes, among others.
In 2022, 2023, 2024 and the nine months ended September 30, 2024 and 2025, the average
selling prices (excluding tax) of our meat products were approximately RMB19.4 per kg,
RMB15.6 per kg, RMB17.1 per kg, RMB17.3 per kg and RMB14.8 per kg, respectively. The
shelf life of our meat products is mainly seven days for fresh meat products (stored at 0~4°C)
and 18 months for frozen meat products (stored at -18°C). The following table sets forth the
average selling prices of our meat products by product type for the periods indicated:
Y ear ended December 31,
Nine months ended
September 30,
2022 2023 2024 2024 2025
(RMB per kg)
Carcasses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111821.6 16.9 19.1 19.4 16.3
Pork cuts /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111821.5 17.1 18.8 18.6 17.4
By-products /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111813.0 11.5 11.6 12.0 9.8
The average selling prices of our meat products fluctuated during the Track Record
Period, which were in line with overall movement of pork prices in the Chinese market.
Slaughtering Plants
As of September 30, 2025, we had established ten slaughtering plants across seven
provinces in China, all of which have obtained ISO9001 certification. As of September 30,
2025, we had one new slaughtering plant in Huaxian, Henan Province under construction with
a total designed production capacity of 2,000 thousand heads per year, which is expected to put
into operation in 2026. We conduct regular maintenance and timely upgrades of our
slaughtering and processing facilities to ensure operational efficiency, food safety and
compliance with industry standards.
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The following table sets forth the designed production capacity, actual slaughter volume
and utilization rate of our slaughtering plants for the periods indicated:
Y ear ended December 31,
Nine months ended
September 30,
2022 2023 2024 2024 2025
Designed production
capacity (1)
(thousand heads) /H1118/H1118/H1118/H1118/H1118/H111829,000 29,000 29,000 21,750 21,750
Slaughter volume (1)
(thousand heads) /H1118/H1118/H1118/H1118/H1118/H11187,362 13,260 12,524 7,972 19,164
Utilization rate (2) (%) /H1118/H1118/H1118/H1118/H111825.4 45.7 43.2 36.7 88.1
Notes:
(1) Since that our slaughtering plants measure their production capacity and slaughter volume by the heads
of hogs slaughtered, and that the weight of hogs varies over time, the slaughter volume (in head) may
not always align with the sales volume (in kilogram) for the same period.
(2) Utilization rate is calculated by dividing the slaughter volume by the designed production capacity for
the same year/period. According to Frost & Sullivan, the average utilization rate of China’s large-scale
slaughtering plants was around 30% during the Track Record Period, primarily due to the seasonal
fluctuations in the supply of hogs, which may not consistently meet the designed production capacity
of those slaughtering plants.
During the Track Record Period, our slaughter volume increased significantly from 7,362
thousand heads in 2022 to 13,260 thousand heads in 2023, primarily due to our efforts to
continuously improve operational efficiency of our slaughtering plants. Our slaughter volume
slightly decreased from 13,260 thousand heads in 2023 to 12,524 thousand heads in 2024,
primarily affected by overall market downturn. Our slaughter volume increased substantially
from 7,972 thousand heads in the nine months ended September 30, 2024 to 19,164 thousand
heads in the same period of 2025, primarily due to our continuous effort to expand our sales
channels for meat products and improve our operational efficiency, driving the increase in the
utilization rate of our slaughtering plants in the same period.
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Slaughtering Process
The slaughtering process mainly comprises the following steps:
CO2 stunning Slaughtering
and bleeding
Cleaning and
polishing
Ripping and
eviscerating
Scanning
inspection
Grading and
weighing
Half-splittingBy-products
Pre-cooling and
acid discharge
Carcasses
Cutting and
packaging
Pork cuts
 Lairage : We allow hogs to rest quietly with sufficient space and time in the
slaughterhouse, which is equipped with an air deodorization and ventilation system
and a sprinkler system. Hogs can rest well to relieve the stress caused by the
transportation process.
 Stunning :W eu s eaC O
2 stunning system in our humane slaughter process. The high
concentration of CO 2 renders the hogs unconscious. This process effectively relieves
the hogs’ pain, reduces their stress and improves animal welfare and pork quality.
 Ripping : We use automatic ripping robots which utilize 3D imaging technology to
determine the ripping path. Industrial multi-axis robot arms are used for precise
ripping. The robot sterilizes the cutting head after each rip to avoid cross-
contamination. Compared with traditional manual ripping techniques, automated
ripping robots offer a high degree of precision, avoiding damage to the carcass and
reducing reliance on skilled workers.
 Half-splitting : We use an automatic half-splitting robot, which moves laterally at the
same speed as the carcass transport line, and maintains the accuracy of half-
splitting. Compared with the manual half-segmentation method, the automatic
half-segmentation robot can improve productivity and reduce labor intensity. At the
same time, our semi-splitting technology can improve the quality of meat products
by avoiding meat and bone froth during processing, as well as black bones on the
cutting surface due to high temperatures.
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 Pre-cooling and acid discharging : We use a multistage process of pre-cooling and
acid discharging to quickly lower the carcass temperature. This procedure helps to
reduce the growth rate of microorganisms, extend shelf life, maintain freshness and
improve the quality of meat products. Our fully automatic acid discharging
warehouse can realize the automatic entry and exit of carcasses to reduce staff
contact with products, thereby reducing bacterial contamination, improving product
hygiene and safety, and reducing labor. During the pre-cooling phase, muscle
proteins are degraded normally, muscles are softened and acidity is reduced, which
greatly improves the tenderness and taste of the meat.
 Cutting and packaging : We process carcasses into pork cuts to meet diverse
customer needs. We maintain strict control over temperature, humidity and air
quality to ensure product quality and hygiene, thereby extending shelf life. For
certain pork cuts, we use modified atmosphere packaging (MAP) technology (using
80% oxygen and 20% carbon dioxide) to inhibit microbial growth and oxidation.
Automated and Smart Slaughtering
We have introduced advanced meat processing lines to achieve automation in hog
slaughtering. All of our slaughtering plants apply the ISO9001 quality management system and
some of our slaughtering plants meet China HACCP management system standards.
Additionally our standardized slaughtering processes are equipped with various inspection
equipment, combined with 3D imaging recognition technology, to enhance the quality control
and food safety. In addition, we apply various systems to effectively reduce our labor costs,
improve our employees’ working environment and boost production efficiency.
 ERP system . Our ERP system mainly consists of five modules, namely sales
management, financial management, production planning, cost accounting, and
procurement and inventory management. Our advanced smart tools enable
comprehensive monitoring of our entire operational workflow, encompassing order
management, procurement, production execution, warehousing, logistics, customer
delivery and after-sales service. These tools also automatically generate detailed
operating data analyses, thereby enhancing the decision-making capabilities of our
management team.
 Automatic pre-cooling warehouse . Our automated pre-cooling warehouse keeps the
pre-cooling area at a temperature of 0~4°C using a cold air system to quickly cool
and stabilize the temperature of meat products. Compared with traditional pre-
cooling warehouses, we have connected the processing area to the pre-cooling
warehouse with a fully automated conveyor line. By integrating our WMS system
with RGV and AGV , we have automated the entire process of pre-cooling, handling
and storing the meat products. RGV and AGV work together to prevent temperature
changes from manual handling, protect employees from long exposure to cold
temperatures, and reduce potential food safety issues.
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 Smart logistics system . Our smart logistics system manages the freezing and
delivery of fresh meat products after they have been slaughtered and cut. Products
shipped on the same day are organized according to delivery routes and customer
requirements, using a direct distribution room, waiting warehouse, and order
binding method. The workshop management system collaborates with the delivery
centre, following preplanned routes to oversee distribution and scheduling. This
process ensures efficient product collection and loading, guided by tools such as
palletizing and PDAs. The logistics system encompasses all aspects of on-site
logistics, including managing product allocation, adjusting customer orders,
handling vehicle assembly and disassembly, scheduling the vertical warehouse
system, controlling the flow of incoming products, issuing and managing outbound
plans, and overseeing product collection and loading in the distribution room.
SALES NETWORK
We are committed to delivering safe and quality products to consumers while building
long-term trust and loyalty. To strengthen our market presence, we employ diversified
strategies aimed at enhancing the influence and popularity of our products. These strategies are
tailored to meet the needs of various customer segments and support our broader sales efforts.
We have established a comprehensive and regionally integrated sales network to cover key
markets across China, enabling us to efficiently connect production with market demand. Our
sales network and marketing initiatives are integrated to create a seamless connection between
production, promotion and distribution, ensuring efficient delivery of products to our
customers.
Hog Business
We have dedicated sales teams for the sales of finished hogs, piglets and breeding hogs.
The sales teams are responsible for formulating sales plans in light of our production plans, as
well as implementation of the sales plans. As of September 30, 2025, we had a sales team under
our hog business consisting of over 5,100 staff in China.
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Customers for our finished hogs are mainly hog dealers as well as slaughtering plants. We
also sell piglets and breeding hogs primarily to hog farming enterprises and individual hog
farmers. The table below sets forth the breakdown of the revenue from our hog business (before
intersegment elimination) by type of customer for the periods indicated:
Y ear ended December 31,
Nine months ended
September 30,
2022 2023 2024 2024 2025
Amount % Amount % Amount % Amount % Amount %
(RMB in millions, except for percentages)
(Unaudited)
Hog dealers /H1118/H1118/H1118/H111858,145.5 48.6 44,950.7 41.5 56,430.1 41.4 40,580.8 42.6 38,110.7 34.8
Direct sales
customers (1) /H1118/H1118/H111861,598.5 51.4 63,273.6 58.5 79,799.2 58.6 54,775.9 57.4 71,405.3 65.2
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118119,744.0 100.0 108,224.3 100.0 136,229.3 100.0 95,356.7 100.0 109,516.0 100.0
Note:
(1) Direct sales customers represent our customers under hog business other than hog dealers, namely
slaughtering plants for the sales of finished hogs, and hog farming enterprises and individual hog
farmers for the sales of piglets and breeding hogs.
During the Track Record Period, for the sales of our finished hogs, the proportion of
revenue from direct customers has been increasing mainly due to our increasing direct sales to
slaughtering plants. This shift fosters stronger, more collaborative partnerships with
slaughtering plants, which also allows for more accurate market intelligence and more efficient
risk management due to simpler and more traceable supply chains.
With regard to the sales of our finished hogs, for both hog dealers and our direct sales
customers, sales are conducted through our self-operated sales app and the pricing is usually
determined by way of bidding. Our customers need to register on our system as users and enter
into framework sale and purchase agreements with us, and they can submit their bidding prices
and the purchase quantity of finished hogs on the sales app within a certain time limit. The
system will automatically confirm sales orders by considering the bidding prices, the hog
supplies in each region and customer demand in each region. A binding contract takes effect
immediately once the order is confirmed by the system, and the final transaction price is
determined by the bidding price entered by our customers. All the associated payments are
required to be made via bank transfer to our bank accounts, rather than through our
self-operated sales app. These payments are required to be completed prior to the customer’s
collection of hogs from our hog farms. We do not accept cash or other forms of offline
payments. Our selling price of finished hogs was generally consistent with the market selling
prices during the Track Record Period. For the sales of piglets and breeding hogs, we form our
pricing strategies taking into account the prevailing market selling prices, our costs and market
conditions.
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Our relationships with our customers, including both hog dealers and our direct sales
customers, are characterized as seller and buyer relationships, and we typically enter into
framework sale and purchase agreements with those customers for sales of our hogs and
confirm sales details in separate sales orders. The salient terms of the framework agreements
generally include the following:
Duration /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Generally one year.
Deposit /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118We typically require our customers to pay a deposit.
Minimum purchase
commitment /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
We generally do not set any minimum purchase
requirements.
Payment terms /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118We typically require advance payment for the hogs.
Delivery /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Our customers are generally responsible for arranging
deliveries and bears the risks. Their vehicles must meet
our requirements, otherwise, we may refuse to load our
hogs without any liability.
Exchange or return /H1118/H1118/H1118/H1118/H1118/H1118/H1118We typically do not allow exchange or return of hogs
after hogs are weighed for delivery.
Termination /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118We may terminate the contract if there is a breach of
material terms by our customers.
In terms of our direct sales customers, they primarily consist of slaughtering plants for the
sales of finished hogs, and hog farming enterprises, individual hog farmers for the sale of
piglets and breeding hogs. In terms of the hog dealers who purchase finished hogs from us, they
are generally self-employed intermediaries and to the best of our knowledge, they generally
resell our products to third-party slaughtering plants.
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The following table sets forth the changes in the number of our hog dealers as of the dates
indicated:
As of December 31,
As of
September 30,
2022 2023 2024 2025
Number of hog dealers at the
beginning of the
year/period /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,871 2,326 1,802 2,739
Number of new hog dealers
joined in the year/period /H1118/H1118 1,132 573 1,439 860
Number of hog dealers
ceased to distribute our
hogs in the year/period
(1) /H1118/H1118 677 1,097 502 1,134
Number of hog dealers at the
end of the year/period /H1118/H1118/H1118/H11182,326 1,802 2,739 2,465
Note:
(1) The number of hog dealers ceased to distribute our hogs in the year includes those who did not purchase
from us during the prescribed year but returned to us for the purchase of hogs in subsequent years. If
revenue was generated in the prior year but not in the current year, they are considered as part of the
decrease.
According to Frost & Sullivan, selling hogs to hog dealers is a common practice among
hog farming companies in China, mainly because (i) hog dealers are key participants in the
downstream of the industry with extensive distribution channels and, (ii) compared to other
downstream participants such as slaughterhouses, hog dealers offer greater flexibility in sales
timing, location and quantity while typically not requiring credit terms. The hog dealers
primarily comprise self-employed intermediaries operating between farming enterprises and
slaughterhouses or individual butchers. Apart from a small portion of large-scale hog dealers,
most of hog dealers’ transactions in the hog farming industry in China are characterized by
small-scale, fragmented and high turnover. Given their typically small purchase volume and
lack of consistent procurement pattern, this customer group demonstrated volatility to some
extent, and there were substantial fluctuations in the number of our hog dealers during the
Track Record Period. In particular, in 2023 and the nine months ended September 30, 2025, the
number of our hog dealers fluctuated, primarily attributable to the fluctuations in the hog
market price. Meanwhile, certain small-scale hog dealers exited the market during that period
as a result of intense competition. The substantial increase in the number of hog dealers that
ceased to distribute our hogs in the nine months ended September 30, 2025 was also attributed
to the increasing finished hogs we internally supply to our slaughtering and meat product
business. Moreover, driven by our optimized sales strategies for piglets and breeding hogs at
the end of 2024, some strategic customers placed their orders in advance. As a result, in the
nine months ended September 30, 2025, we primarily allocated our piglets and breeding hogs
to those customers, which led to the fluctuations in the number of hog dealers. According to
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Frost & Sullivan, such fluctuations are in line with the broader industry trends. Given the low
market entry barriers and the light-asset nature of hog dealership models, hog dealers can enter
or exit the market in a flexible manner. In particular, hog dealers with weaker risk tolerance
tend to suspend their business when they anticipate the profitability to decline, which
accounted for the substantial increase in the number of hog dealers that ceased to distribute our
hogs in 2023.
Our relationships with hog dealers are characterized as seller and buyer relationships,
which do not grant us control over their operations or inventories. We recognize the revenue
at the point when the finished hogs are weighed immediately prior to loading for delivery, and
the ownership and risk of the finished hogs are transferred to hog dealers, who assume the
transportation risks. As we sell finished hog to hog dealers outright, we do not have a policy
on the geographical distribution of our hog dealers, and we do not impose restrictions on the
resell price or the distribution channels, which is in line with the industry norm in China,
according to Frost & Sullivan. We have no relationship with and have no control over the
customers of hog dealers.
Under animal quarantine regulations of PRC, hogs shall only be transported to the
designated destinations as specified on the relevant quarantine certificates once the quarantine
inspection has been completed and the quarantine certificates have been obtained. Hog dealers
are not allowed to keep such quarantine certificates for their own interests. Additionally, we
generally require full upfront payment of the contract price before delivering finished hogs to
them and generally do not allow returns of hogs sold to them. Nor do we set any mandatory
sales targets or minimum purchase volumes for hog dealers. These measures reduce hog
dealers’ incentives to over-procure our hogs. Furthermore, there is no commercial rationale for
hog dealers to take in products more than actual demands due to the live nature of hogs, the
transparent hog prices and the high cost to transport and keep hogs. Based on the above, we
believe there is no channel-stuffing risk with the distribution through our hog deals.
Additionally, given that (i) hogs are commodities with transparent pricing in an open and
competitive market and (ii) our target customers in direct sales are different from those of our
hog dealers, we believe that the risks of cannibalization does not apply to our sales channels
under our hog business.
To the best of our knowledge, during the Track Record Period and up to the Latest
Practicable Date, all of our hog dealers were Independent Third Parties. To the best of our
knowledge and based on publicly available information, as of the Latest Practicable Date, there
was no employment, financing or family relationship between our hog dealers and us.
Slaughtering and Meat Product Business
We have established sales teams and service stations nationwide to expand the sales
network of various channels of our slaughtering and meat product business and provide
after-sales services for local customers. As of September 30, 2025, we deployed 77 sales
service branches covering 20 provinces nationwide, consisting of nearly 1,200 sales staff under
our slaughtering and meat product business.
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We primarily sell our meat products to wholesale market customers, and sell our meat
products to direct sales customers, including retailers, restaurants, canteens and food
processors. The table below sets forth the breakdown of the revenue from our slaughtering and
meat product business (before inter-segment elimination) by type of customer for the periods
indicated:
Y ear ended December 31, Nine months ended September 30,
2022 2023 2024 2024 2025
Amount % Amount % Amount % Amount % Amount %
(RMB in millions, except for percentages)
(Unaudited)
Wholesale market
customers (1) /H1118/H1118/H111810,629.8 72.2 15,287.2 69.9 16,633.7 68.5 10,801.7 68.0 22,292.3 70.1
Direct sales
customers /H1118/H1118/H1118/H11184,088.3 27.8 6,575.1 30.1 7,639.9 31.5 5,079.3 32.0 9,520.4 29.9
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111814,718.1 100.0 21,862.3 100.0 24,273.6 100.0 15,881.0 100.0 31,812.7 100.0
Note:
(1) Wholesale market customers represent local markets selling agro products, involving purchases of
goods in bulk.
For our slaughtering and meat product business, with the support of the CRM system and
our Muyuan Fresh mini program, we digitalized our sales management from the perspective of
customer accounts management, payments and procurements. Upon opening a customer
account, we sign a framework sale and purchase agreement with the customer, who will be
allowed to subsequently place orders with us, track orders, arrange logistics and provide
feedback via our Muyuan Fresh mini program. For sales orders requiring longer stocking
periods or involving larger purchase volume, we generally enter into separate procurement
agreements with those customers. The selling price of our meat products is mainly determined
by market selling prices, while also considering our costs and any customization needs of our
customers.
Wholesale Market Customers
We sell our meat products to a number of wholesale market customers to deepen our
penetration of traditional sales channels and to promote our sales of meat products, who
typically resell our meat products to hypermarkets, supermarkets, restaurants or canteens, and
food processors. According to Frost & Sullivan, it is an industry norm for slaughtering
enterprises in China to distribute meat products through distributors due to the fragmentation
in the market.
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The following table sets forth the changes in the number of our wholesale market
customers as the dates indicated:
As of December 31,
As of
September 30,
2022 2023 2024 2025
Number of wholesale market
customers at the beginning
of the year/period /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,352 5,470 5,254 5,846
Number of new wholesale
market customers joined in
the year/period /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,247 1,982 2,037 2,790
Number of wholesale market
customers ceased to
distribute our products in
the year/period /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118129 2,198 1,445 1,412
Number of wholesale market
customers at the end of the
year/period /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185,470 5,254 5,846 7,224
In 2022, 2023, 2024 and the nine months ended September 30, 2025, the number of new
wholesale market customers joined were 3,247, 1,982, 2,037 and 2,790, and the number of
wholesale market customers ceased to distribute our products were 129, 2,198, 1,445 and
1,412, respectively. There was a significant increase in the numbers of wholesale market
customers in 2022 mainly because we were at early stage of business development. In 2023 and
2024, we were still focusing on expanding our customer base. The numbers of wholesale
market customers further increased in the nine months ended September 30, 2025, primarily
attributable to our efforts to proactively expand markets and improve our sales channels.
During the Track Record Period, some customers closed their business due to their
management reasons. According to Frost & Sullivan, fluctuations in the number of meat
wholesale market customers are common in the meat industry where the market players can
enter or leave the market in a relatively flexible manner. Where there is a downturn in the pork
industry, wholesale market customers who are less risk tolerant (mostly small and medium-
sized ones) tend to suspend their business. In addition to market reasons, we have been
continuously refining our sales channels since we entered the meat industry by ceasing to
cooperate with certain wholesale market customers after evaluating the profitability of
transactions with a view to optimize our sales. These two factors accounted for the increase in
the number of wholesale market customers who ceased to distribute our products in 2023.
There were further increase in the numbers of wholesale market customers who ceased to
distribute our products in the nine months ended September 30, 2025 primarily due to our focus
on key account customers and our efforts to streamline the existing wholesale customer
structure to enhance profitability.
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Our relationships with our wholesale market customers are characterized as seller and
buyer relationships, as they acquire ownership of the products we deliver to them. They
provide further sales, distribution and after-sales service of meat products to their downstream
customers. We typically enter into framework sale and purchase agreements with those
customers for sales of our meat products and confirm sales details in separate sales orders, the
salient terms of the framework agreements generally include the following:
Duration /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Generally one year.
Minimum purchase
commitment /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Wholesale market customers are not subject to mandatory
sales targets or minimum purchase volume.
Designated distribution
regions and/or
channels /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Wholesale market customers are not subject to restrictions
on distribution regions and/or channels.
Payment terms /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118We typically require full payment before delivering our
products to wholesale market customers.
Delivery /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Customers may choose either pick-up or delivery arranged
by us. If we arrange transportation, we assume the risk,
responsibility and cost of any damage until the goods reach
the agreed location, after which the responsibility transfers
to the customer. If customers handle transportation, they
must arrange vehicles to collect the goods and bear all
risks and expenses once the products are loaded, and their
vehicles must meet the requirements specified in the sales
contracts; otherwise, we may refuse to load our products
without any liability.
Exchange and return /H1118/H1118/H1118/H1118Customers may request to exchange or return our meat
products for product defects within certain period
(generally 30 days for frozen meat products and three days
for fresh meat products).
Termination /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118If the customer breaches certain material terms, we may
terminate the agreement.
We generally require full upfront payment of the contract price before delivering meat to
the wholesale market and generally do not allow returns of meat sold to them. Nor do we set
any sales target or minimum procurement volume for our meat, as a result of which, our
wholesale market customers lack the incentive to take in products more than the actual
demands. Furthermore, due to the perishable nature of meat products, the transparency of meat
prices and the high cost of meat transportation and storage, there is no commercial rationale
for our wholesale market customers to over-procure our products. Additionally, given that (i)
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meat is a commodity with transparent pricing in an open and competitive market and (ii) our
direct sales primarily target large-scale businesses such as retailers, restaurants, canteens and
food processors, which serve distinct consumer groups and operate in different consumption
scenarios compared with our wholesale market customers. As such, we believe that the risk of
cannibalization to our sales channel under our slaughtering and meat product business is low.
We generally do not monitor or restrict the operations or resales of our wholesale market
customers. Specifically, we generally do not have a policy on the geographical distribution of
our wholesale market customers or impose restrictions on the reselling price, which is in line
with the industry norm in China, according to Frost & Sullivan. We have no relationship with
and have no control over any of the customers of our wholesale market customers. Given that
(i) we generally sell meat to our customers on a full prepayment and no-return basis and (ii)
once sold, our wholesale market customers no longer use our brands to further market and
resale our products, there is no commercial rationale for us to impose restrictions on our
wholesale market customers under our slaughtering and meat product business.
To the best of our knowledge, during the Track Record Period and up to the Latest
Practicable Date, all of our wholesale market customers were Independent Third Parties. To the
best of our knowledge and based on publicly available information, as of the Latest Practicable
Date, there was no employment, financing or family relationship between our wholesale market
customers and us.
Direct Sales Customers
Our direct sales customers mainly consist of retailers, restaurants, canteens and food
processors. Our relationships with our direct sales customers for the sale of meat products are
characterized as seller and buyer relationships, and we typically enter into framework sale and
purchase agreements with those customers and confirm sales details in separate sales orders.
The salient terms of the framework agreements generally include the following:
Duration /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Generally, one year.
Minimum purchase
commitment /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Customers are not subject to mandatory sales targets or
minimum purchase volume.
Payment terms /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118We typically require full payment before delivering our
products to our customers, and we may grant certain credit
periods to certain customers by considering their credit
profile.
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Delivery /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Customers may choose either pick-up or delivery arranged
by us. If we arrange transportation, we assume the risk,
responsibility and cost of any damage until the goods reach
the agreed location, after which the responsibility transfers
to the customer. If customers handle transportation, they
must arrange vehicles to collect the goods and bear all
risks and expenses once the products are loaded, and their
vehicles must meet the requirements specified in the sales
contracts; otherwise, we may refuse to load our products
without any liability.
Exchange and return /H1118/H1118/H1118/H1118Customers may request to exchange or return our meat
products for product defects that can not be immediately
verified upon delivery within certain period (generally 30
days for frozen meat products and three days for fresh
meat products).
Termination /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118If the customer breaches certain material terms, we may
terminate the agreement.
Major Customers
During the Track Record Period, the majority of our customers were based in the PRC.
Revenue from our five largest customers in each period during the Track Record Period
amounted to RMB10.1 billion, RMB10.7 billion, RMB12.4 billion and RMB9.3 billion,
respectively, representing 8.1%, 9.7%, 9.0% and 8.3% of our total revenue for the respective
periods. Revenue from our largest customer in each period during the Track Record Period
amounted to RMB3.4 billion, RMB3.4 billion, RMB5.2 billion and RMB2.9 billion,
respectively, representing 2.7%, 3.0%, 3.8% and 2.6% of our total revenue for the respective
periods.
During the Track Record Period and as of the Latest Practicable Date, none of our
Directors, their respective associates or shareholders (who owned or to the knowledge of
Directors had owned more than 5% of our issued share capital) had any interest in any of our
five largest customers for each period of the Track Record Period, save that, as of the Latest
Practicable Date, we held 40% interest in a subsidiary of one of our top five customers for each
period of the Track Record Period, with the remaining interest held by an Independent Third
Party.
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Third-party Payment
Background of Third-Party Payment Arrangements
During the Track Record Period, certain customers (individually or collectively, the
“Relevant Customers ”) settled payments with us through accounts belonging to parties other
than the contractual counterparties under the corresponding sales and purchase agreements (the
“Third-Party Payment Arrangements ”). The Relevant Customers during the Track Record
Period primarily consisted of customers under both of our hog business and our slaughtering
and meat product business in the form of individuals, individual industrial and commercial
households, sole proprietorship enterprises, public institutions and corporate entities. To the
best of our knowledge, the designated third-party payors primarily consisted of persons
affiliated with the Relevant Customers, such as legal representatives, shareholders, relatives
(of the owners, shareholders or controllers), or affiliated entities of the Relevant Customers.
In 2022, 2023, 2024 and the nine months ended September 30, 2025, the number of the
Relevant Customers was 142, 330, 1,185 and 1,658, respectively. The aggregate amount they
settled under the Third-Party Payment Arrangements was RMB32.3 million, RMB47.2 million,
RMB211.5 million and RMB235.8 million, respectively, which accounted for 0.026%, 0.043%,
0.153% and 0.211% of our total revenue, respectively, in the same periods. No individual
Relevant Customer had made a material contribution to our revenue during the Track Record
Period.
During the Track Record Period, we implemented internal control measures to monitor
and manage the Third-Party Payment Arrangements. We typically required all of the Relevant
Customers and their designated third-party payors to provide us with written letters of
undertaking (the “ Undertaking Letters ”) prior to making payments under the Third-Party
Payment Arrangements, which generally specified that the designated third-party payor was
allowed to settle payments with us on behalf of the Relevant Customers through the pre-agreed
accounts of the designated third-party payors involved and all the activities of such pre-agreed
accounts shall constitute activities of the Relevant Customers for which the Relevant
Customers assume responsibilities. To verify the authenticity of Third-Party Payment
Arrangements, staff of our finance department were authorized only to recognize payments
from designated third-party payors of the Relevant Customers, and our business staff were
permitted only to deliver our products to the Relevant Customers on the condition that the
information of the designated third-party payors matches that in the corresponding
Undertaking Letters. Based on the above, our Directors believe that the Third-Party Payment
Arrangements during the Track Record Period, to the best of our knowledge, have been
recorded completely and accurately in our accounting books and records in all material
respects.
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During the Track Record Period, we did not provide any discount, commission, rebate or
other benefits to any of the Relevant Customers or the designated third-party payors to
facilitate or incentivize the Third-Party Payment Arrangements. During the Track Record
Period, all Third-Party Payment Arrangements were initiated by Relevant Customers, not by
us, and the relevant payments were generally settled via bank payments. To the best of our
knowledge, during the Track Record Period, the relevant payments were based on bona fide
underlying transactions and valid contractual relationships. The pricing and payment terms we
provided to the Relevant Customers were in line with those provided to customers not involved
in the Third-Party Payment Arrangements. To the best of our knowledge, we were not the
subject of any investigations, enquiries, penalties or surcharges as a result of our involvement
in the Third-Party Payment Arrangements during the Track Record Period and up to the Latest
Practicable Date. In addition, we had not encountered any refund requests, actual or pending
dispute or disagreement due to Third-Party Payment Arrangements or any material claims
against us in relation to the Third-Party Payment Arrangements during the Track Record Period
and up to the Latest Practicable Date.
Reasons for Third-Party Payment Arrangements
According to Frost & Sullivan, it is a common commercial practice for market players in
the consumer sector in China to settle their payments to suppliers through third-party payors
for convenience and flexibility. Based on the representations of the Relevant Customers and to
our best knowledge, the main reason the Relevant Customers used Third-Party Payment
Arrangements was that they were unable to use their bank accounts to pay us before certain
timepoint pursuant to our agreements due to the daily transfer limits imposed by their banks.
Legal Consequences of Third-Party Payment Arrangements
Based on the facts that (i) all of the Relevant Customers and their designated third-party
payors had provided duly executed Undertaking Letters; (ii) all Third-Party Payment
Arrangements were based on bona fide underlying transactions and valid contractual
relationships, (iii) we have no record of being accused or investigated for money laundering
related to the Third-party Payment Arrangements, (iv) there were no instances of breaches of
PRC laws and regulations or tax-related administrative penalties in relation to our Group’s
activities under the Third-Party Payment Arrangements during the Track Record Period and up
to the Latest Practicable Date, (v) according to the credit reference reports and the compliance
letters issued by the competent government authorities, no administrative penalties were
imposed by tax management authorities for violation of tax laws, regulations and rules due to
our Third-Party Payment Arrangements during the Track Record Period, our PRC Legal
Adviser is of the view that:
(i) our Third-Party Payment Arrangements during the Track Record Period and up to
the Latest Practicable Date were not in breach or contravention of mandatory
requirements of the Civil Code of the PRC;
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(ii) since all of the Relevant Customers and their designated third-party payors had
provided duly executed Undertaking Letters, the risks were remote for our Group to
be found obligated to return funds to Relevant Customers or their designated
third-party payors by virtue only of the funds being paid under the Third-Party
Payment Arrangements, because upon the execution of the Undertaking Letters the
designated third-party payors shall fulfill its payment obligation to us and, once they
make payments to us, they become contractually obligated under the agreements
with respect to such payments;
(iii) since all Third-Party Payment Arrangements were based on bona fide underlying
transactions and valid contractual relationships, and the Relevant Customers and
their designated third-party payors had provided duly executed Undertaking Letters,
the risks were remote for our Group to be found receiving unjust enrichment by
virtue only of the funds being paid under the Third-Party Payment Arrangements;
and
(iv) based on public search, the confirmation of our Company, and to the best of our PRC
Legal Adviser’s knowledge, our Group has no record of being accused or
investigated for money laundering related to third-party payment arrangements and,
as such, the risk of our activities under the Third-Party Payment Arrangements being
deemed as constituting the crime of money laundering under Article 191 of the
Criminal Law of the PRC () for the purpose of covering up
or concealing the source and nature of proceeds or gains is remote.
During the Track Record Period, and up to the Latest Practicable Date, to the best
knowledge of our Directors and based on publicly available information, all other Relevant
Customers and the designated third-party payors who settled payments under the Third-Party
Payment Arrangements were Independent Third Parties.
Rectification of Third-Party Payment Arrangements and the Implication
To safeguard our interest against risks associated with Third-Party Payment
Arrangements, since early April 2025, we have significantly enhanced and implemented
various internal control measures (collectively, the “ Rectification Measures ”) in order to
rectify Third-Party Payment Arrangements. Our efforts to rectify the Third-Party Payment
Arrangements include, among other things:
(i) we have initiated the implementation of series of rectification measures regarding
third-party payment and relevant enhanced internal control measures and informed
our employees of the relevant details of those measures;
(ii) we require all other customers to make relevant payment directly from the accounts
of such customers who are parties to the relevant sales and purchase agreements;
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(iii) if not directly from the accounts of the customers, we require the relevant customers
and their designated third-party payors to enter into tripartite agreements with us (as
an attachment to the relevant sale and purchase agreement), so as to clearly specify
the contractual payment obligations of relevant parties thereof; and
(iv) to prevent fraud or money laundering activities and ensure the accuracy and
completeness of our accounting books and records, we consistently maintain our
know your customer’ procedures to gain a comprehensive understanding of our
customers, and perform verification of payment details against our records to
confirm payments are made in accordance with the agreements and/or the
undertaking letters. If any abnormalities are detected, we will promptly liaise with
such customers for verification and correction.
We regularly check the effectiveness of the Rectification Measures and promptly address
any abnormalities. Based on the review of the implementation of the Rectification Measures,
our Directors are of the view that such measures are effective and adequate in identifying the
sources of funds from the Relevant Customers, ensuring the accuracy and completeness of our
accounting books and records and preventing risks associated with Third-Party Payment
Arrangements, including money laundering risks, tax evasion risks or other risks relating to
violation of applicable laws and regulations. We will continue to monitor the effectiveness of
these measures.
As of the Latest Practicable Date, we have fully implemented the Rectification Measures
and have terminated all Third-Party Payment Arrangements.
Our Directors consider that the rectification of the Third-Party Payment Arrangements
and the implementation of the Rectification Measures did not have, nor will have, any material
adverse effect on the Group, taking into account the relationship with our customers, business
operation and financial performance, as (i) all of the Relevant Customers had cooperated with
our Rectification Measures; (ii) we continued to generate positive net cash from our operating
activities before and after the rectification of Third-party Payment Arrangement (early
April 2025); and (iii) Third-Party Payment Arrangements accounted for an insignificant
proportion of the total payments we received from all customers during the Trade Record
Period.
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SUPPLIER MANAGEMENT
Supplier Selection and Management
During the Track Record Period, our raw materials mainly included (i) feed ingredients,
(ii) veterinary medicines and vaccines and (iii) miscellaneous consumption materials. We adopt
a centralized procurement strategy. The majority of our suppliers were located in China during
the Track Record Period. We have entered into strategic cooperation framework agreements
with key suppliers. The salient terms of the framework agreements generally include the
following:
Duration Generally one year.
Minimum purchase
commitment
We are generally not subject to mandatory minimum purchase
volume.
Confidentiality Both parties to the agreement are subject to confidentiality
obligations.
Credit term Generally, 15 to 180 days.
Dispute resolution Disputes arising from, or in relation to the agreement shall
typically be resolved through negotiation, or if unresolved,
generally through arbitration.
Termination The agreements may generally be terminated by mutual consent,
written notice within a specified period prior to the agreement’s
expiration, or in the event of a material breach by either party.
We have established rigorous processes for supplier selection, evaluation and
management to ensure all suppliers meet our quality and performance standards. In the
selection stage, we have established strict screening procedures to select qualified suppliers for
raw materials. Our quality control department, veterinary department and procurement
department cooperate to pre-screen candidates based on product quality, production capacity,
delivery capability, reliability, systems for quality control and traceability, and market
reputation. Before admitting new suppliers, we review their qualifications, including HSE
system certification, quality management system certification, emission permits, and energy
management system certification, among others. For suppliers that satisfy our admission
standards, we require them to complete integrity tests and enter into a variety of documents
including supplier codes of conduct, supply agreements, integrity and honesty agreements,
biosafety commitments, environmental protection commitments and supplier relationship
disclosure statements. We have built close partnerships with leading merchants to diversify our
sourcing channels, which helps to secure a steady supply of raw materials and reduce supply
chain risks. We generally procure raw materials from suppliers through non-exclusive supply
contracts to avoid overreliance on certain suppliers.
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In particular, we primarily procure feed ingredients, such as corn, wheat, grain mixtures
and soybean meal, as well as other supplements, including vitamins and minerals, to produce
feed. By strategically focusing our procurement efforts on key grain-producing regions, we are
exploring direct procurement models that eliminate unnecessary intermediaries between grain
producers and us, with a view to capitalize on our presence in these regions to improve quality
control of feed ingredients, streamline the supply chain and optimize procurement cost
structure.
All new suppliers must sign an anti-corruption agreement, which explicitly prohibits
bribery, the transfer of improper benefits and other unethical practices. We also manage and
monitor the performance of our suppliers by providing them with training on topics covering
anti-corruption, biosafety, supply chain finance, logistics visualization and other areas to
promote mutual growth. In 2024, we empowered over 8,000 suppliers through training. We
evaluate the suppliers’ performance annually.
During the Track Record Period and up to the Latest Practicable Date, we did not
experience any significant shortage of raw materials supplies, and the raw materials provided
by our suppliers did not have any significant quality issues.
Pricing Management
We have adopted comprehensive measures to tackle price fluctuations in raw materials.
We use multiple measures to ensure that we obtain favorable prices for raw materials, mainly
including (i) pricing through bidding — our suppliers compete for our orders through a bidding
process and we select the winning bid based on their bidding price and other factors, and (ii)
pricing through negotiation — based on our procurement plan and price estimate of raw
materials, we enter into procurement orders with our suppliers to confirm the contract price for
each batch of supply.
Major Suppliers
Purchases from our five largest suppliers in each period during the Track Record Period
amounted to RMB16.2 billion, RMB12.4 billion, RMB12.2 billion and RMB12.8 billion,
respectively, representing 15.9%, 11.7%, 12.6% and 17.2% of our total purchases for the
respective periods. Purchases from our largest supplier in each period during the Track Record
Period amounted to RMB4.5 billion, RMB3.6 billion, RMB3.1 billion and RMB3.6 billion,
respectively, representing 4.4%, 3.4%, 3.2% and 4.9% of our total purchases for the respective
periods.
During the Track Record Period and as of the Latest Practicable Date, save for Muyuan
Group who was among our five largest suppliers for each period of the Track Record Period,
none of our Directors, their associates or any of our shareholders (who owned or to the
knowledge of the Directors had owned more than 5% of our issued share capital) had any
interest in any of our five largest suppliers for each period of the Track Record Period. See
“Connected Transactions — Partially-exempt Continuing Connected Transaction”.
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Customer and Supplier Overlapping
Our largest customer in 2022, 2024 and the nine months ended September 30, 2025, and one of
our top five customers in 2023 (the “ Customer X”), was also among our top five suppliers in 2022.
Company X is a group primarily engaged in hog slaughtering, food processing and manufacturing,
and the sales of grains and vaccines for livestock in China. We mainly procured feed ingredients and
veterinary vaccines from the subsidiaries of Customer X and sold hogs and meat products to different
subsidiaries of Customer X during the Track Record Period. According to Frost & Sullivan, it is
common that leading enterprises in the pork industry operate across multiple segments across
the entire value chain, and it is a norm in the pork industry that upstream and downstream
enterprises along the value chain, such as feed manufacturers and breeding and farming
enterprises, transact with each other as suppliers and customers. The revenue from sales to
Company X in 2022, 2023, 2024 and the nine months ended September 30, 2025 was RMB3.4
billion, RMB3.2 billion, RMB5.2 billion and RMB2.9 billion, respectively, accounting for
2.7%, 2.9%, 3.8% and 2.6% of our total revenue for the respective periods. The purchase
amount attributable to procurement from Company X in 2022, 2023, 2024 and the nine months
ended September 30, 2025 was RMB2.0 billion, RMB0.3 billion, RMB0.3 billion and RMB0.1
billion, respectively, accounting for 2.0%, 0.3%, 0.3% and 0.2% of our total purchase amount
for the respective periods. Negotiations of the terms of our sales to and purchases from
Company X were conducted on an individual basis and the sales and purchases were neither
inter-connected nor inter-conditional with each other. Our Directors confirmed that all of our
sales to and purchases from Company X were conducted in the ordinary course of business
under normal commercial terms and on an arm’s-length basis, and Company X is an
Independent Third Party. Our Directors affirm that the prices of transactions with Company X
are comparable to those of similar transactions conducted with other customers and suppliers
of our Group.
FOOD SAFETY MANAGEMENT AND QUALITY CONTROL
We value food safety and have implemented stringent quality control standards in
compliance with applicable laws and regulations, and national and industrial standards relating
to food production and sales. We operate an integrated business model along the industry chain,
with comprehensive production standards and well-established production management
systems to keep each production period on track and under control. At the same time, we
continually optimize our management system, which covers all key aspects of our operations,
including financial management, human resources management, office automation, production
management and food safety traceability management. This optimization has enabled a
streamlined, efficient and integrated management model.
We have established the “7+1+1” food safety management and quality control system to
manage and monitor the entire production chain and lifecycle of our products. The “7”
comprehensive food safety assurance systems cover the entire process, including feed
production, farming production, inspection and testing, hog sales, slaughtering and meat
products, and market circulation. The first “1” represents our comprehensive food safety
information traceability system involving full digital food safety and quality management,
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including smart procurement systems, feed management systems, production management
platforms, the Hongxin testing system, slaughter management systems and sales management
systems. This ensures precise data collection from the source to the terminal, and smart
platform management from farm to table, using digitalization to guarantee food safety and
quality. The second “1” refers to our food safety culture system, which aims to enhance
employee awareness and behavior. During the Track Record Period and up to the Latest
Practicable Date, we did not receive any material complaints from customers in connection
with product quality or food safety, and did not have any material product recalls or returns,
major complaints or product liability claims.

Muyuan Food Safety and Quality Control System
7-Food Safety Assurance Systems of the Whole Industry Chain
Input
Assurance
Feed
Assurance
Farming
Production
Assurance
Market
Circulation
Assurance
Slaughtering
and Meat
Product
Assurance
Hog Sales
Assurance
Inspection
and
Testing
Assurance
1-Food Safety Information Traceability System of the Whole Industry Chain
1-Muyuan Food Safety Culture System
“7” Food Safety Assurance Systems
(i) Input Assurance
We have established a comprehensive quality control system that covers product quality
control, veterinary services, hog nutrition and raw material procurement. This system primarily
targets the management of suppliers, pre-use testing, and routine sampling of veterinary drugs
and vaccines to ensure their quality and safety meet our standards. Specifically, we have set
internal standards for product selection. Our quality control team tests and seals samples for
record before procurement. Our quality control team and supplier management team conduct
random inspections of our suppliers’ products during their production process from time to
time through independent third-party testing institutions. We determine which quality control
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measures to implement based on the risk level of different product categories and customers’
feedback regarding product quality. We also require our suppliers to provide quality guarantees
that their products are in compliance with our internal quality control standards for specific
products, and that they shall be responsible for contract breaches in the event that they fail to
meet such quality standards.
(ii) Feed Assurance
We monitor and manage raw material suppliers, incoming inspections, processing
procedures, and finished product inspections to ensure feed quality. We adopt strict screening
procedures to select qualified suppliers for raw materials. See “— Supplier Management —
Supplier Selection and Management.” We set safety and quality standards on raw materials for
suppliers, which are consistent with or higher than national standards. Before a supplier can
supply key raw materials to us, our procurement and quality control departments conduct an
independent sample test on the raw materials to ensure compliance with the applicable animal
quarantine and food safety laws, such as the level of mycotoxin in grains, and with our internal
quality standards. Suppliers are required to provide us with quality certifications or testing
reports for each batch of key raw materials. In addition, we conduct regular quality tests on the
raw materials procured and require those suppliers that deliver unsatisfactory products to take
appropriate measures promptly.
As of the Latest Practicable Date, almost all feed used in our hog farming operations was
produced by our own facilities. We purchase feed ingredients in accordance with our
self-developed formulations. We have implemented the FSSC 22000 food safety management
system for some of our feed production factories. We have adopted high-temperature
sterilization processes, automatic feed delivery, and no human contact to reduce the risk of
contamination and maintain product safety and quality. In addition, we regularly test the levels
of veterinary drug residue, pesticide residue and heavy metals in raw materials, water and feed
to ensure compliance with the applicable laws and regulations.
(iii) Farming Production Assurance
We have obtained the FSSC 22000 food safety management system certification
recognized by the GFSI for some of our feed production factories for the feed production
process, and the China GAP Certification for the hog farming process. We strictly monitor drug
residue indicators, manage diseases and supervise operational practice. We continually upgrade
our biosecurity prevention system and standardize our internal audit system for farming to
enhance quality and safety. We have developed a healthcare program for hogs, and maintain
their health through smart environmental control systems, smart feeding systems, and
ultra-filtered water, among other measures. Our veterinarians implement our health monitoring
plan, take regular samples for testing, and implement measures to proactively prevent diseases
based on the testing results. Sick and weak hogs are separated, and our veterinarians develop
and implement treatment plans based on drug sensitivity tests, leveraging their profound
knowledge and experience of disease treatment.
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(iv) Inspection and Testing Assurance
We possess a range of advantageous testing projects focused on food and agricultural
product testing. To ensure food safety, we have established Hongxin Testing for comprehensive
testing and verification based on product standards. Hongxin Testing encompasses veterinary
drug residues, disease diagnosis related to veterinary drugs, nutritional analysis, environmental
monitoring, water sources, feed, and the entire process from hog farming to the production of
slaughtered meat. It has obtained CMA certification and CNAS recognition. We can provide
testing services for livestock products, animal feed, veterinary disinfectants, fruits, vegetables
and beverages, among others. Additionally, we offer comprehensive food safety testing and
verification, covering everything from raw materials to finished products.
(v) Hog Sales Assurance
We ensure the quality of our hog sales primarily through delivery quality management,
market product quality research, and customer service. Our pre-sale inspections strictly adhere
to our “Muyuan Finished Hog Sales Standards.” In addition, we enforce a quality audit
responsibility policy and enhance our “Product Recall Control Procedure” and “Non-
conforming Product Simulated Recall Drill Plan” to ensure the production healthy products. To
obtain national approval for the sale of hogs, we are required to complete the mandatory
inspection and quarantine of hogs in accordance with the legal requirements, which provides
food safety assurance for our downstream customers.
(vi) Slaughtering and Meat Product Assurance
All of our production facilities operate within a standardized model. The quality control
team integrates production management goals, with a focus on food safety, into the standard
operating procedures on our production lines. Additionally, customer demands for our
products, such as criteria for product appearance, are also incorporated into these standard
operating procedures. We conduct strict compliance management, inspection and quarantine,
hygiene management, and product standard acceptance throughout each slaughtering period
and processing period.
During the slaughtering process, we evaluate and grade the quality of the hogs and upload
the relevant data to our system. Such data is reverted to the hog farming department to identify
issues and make improvements. We take samples of the hogs after slaughtering and use X-ray
machines and metal detectors to identify foreign metal objects mixed in the farming and
slaughtering process, preventing unqualified hogs from entering the food chain.
The quality control team regularly conducts inspections on production lines at each of our
production facilities. We also implement hygiene inspections on our equipment and facilities
as well as inspection procedures during the slaughtering process to ensure the safety of our
products and compliance with applicable laws and regulations. These procedures include but
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are not limited to: (i) cleaning and sterilization processes for facilities, equipment, and tools
in both production facilities and the vehicles used for product delivery; (ii) periodic checks and
inspections of production facilities by quality control staff; and (iii) inspections of staff
clothing and personal hygiene.
(vii) Market Circulation Assurance
We manage quality and safety through market research, pre-sale testing, logistics and
transportation, market sampling, and end-customer service. We ensure food safety throughout
the market circulation process and provide high-quality products to our customers.
“1” Food Safety Information Traceability System
We have established a comprehensive food safety and quality big data traceability system,
including smart procurement systems, feed management systems, production management
platforms, Hongxin testing system, slaughter management systems and sales management
systems, covering the entire value chain, from hog raising through to meat product production
and sales of hogs and meat products. Such system facilitates the traceability of any particular
batch of our meat products down to when the hogs were slaughtered, their feeding units, feed
and animal welfare information. It manages the entire process from farm to table, ensuring the
entire industry chain is transparent, controllable and traceable, thereby guaranteeing food
safety and quality.
“1” Food Safety Culture System
To increase employee awareness of food safety and ensure our employees can meet our
safety and quality requirements, we provide food safety training through online courses, social
media platforms, food safety manuals, banners and bulletin boards, as well as food safety
certification activities for all our employees. We aim to improve our employees’ awareness and
knowledge of food safety through food safety training sessions at regional, subsidiary and farm
levels. We provide continuous food safety training to our testing staff.
SUSTAINABILITY AND SOCIAL RESPONSIBILITY
Environment, Social, and Governance (ESG)
The wave of intelligent transformation and the transition toward green and low-carbon
development have unlocked new growth opportunities avenues for enterprises. Since our
inception, we have adhered to the core values of “ Creating V alue, Serving Society, Upright
Integrity Internally and Externally, and Advancing Social Progress ,” while remaining
committed to the vision of “ Providing Safe Pork for a Healthy and Abundant Life .” We will
continue to drive innovation in technology, products and operational mechanisms, pursue green
development, and deepen farmers’ engagement to promote high-quality growth in the industry.
At present, we are continuously scaling up our systematic initiatives in the following key ESG
areas:
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Environment
 Promoted GHG emission reduction and low-carbon energy substitution through integrated
crop-livestock systems, optimized soybean meal feed formulations, hog house with fossil
fuel-free heating and ammonia reduction and deodorization, as well as adopted new
energy technologies such as photovoltaic power generation and biogas utilization;
 Built an integrated system of green farming and environmental treatment to achieve 100%
resource utilization of manure, while ensuring an odor-free and non-disturbing
environment;
 Advanced a water-use strategy focused on “waste reduction, process upgrading and
recycling,” continuously optimizing the entire process of water intake, usage, and
wastewater recovery;
 Strictly complied with ecological red lines and protected area management regulations,
systematically identified ecological risks based on the TNFD framework, and promoting
the coordinated development of land-saving farming and ecological protection.
Social
 Improved the full-process food safety control system, achieving full-chain traceability
from feed to slaughter to ensure product safety;
 Attached great importance to employees’ career development, health, and safety, built an
equal and inclusive working environment, and enhanced employee well-being;
 Established a sustainable supply chain management system, achieving 100% training
coverage for core suppliers, and promoted green transformation and full-chain transparent
management;
 Drove rural revitalization through farmer-industry partnerships, agricultural benefit
programs, and community-based sustainable development initiatives supported by public
welfare efforts.
ESG Governance
ESG Management and Objectives
We regard ESG as a key strategy for driving stable long-term growth. We have established
a comprehensive sustainability governance framework to ensure effective strategy
implementation, continuously enhance our overall ESG performance, and achieve
collaborative, win-win outcomes with all stakeholders.
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Based on ESG-related regulatory requirements and industry best practices, we have built
a three-tier ESG governance structure that integrates the decision-making, management and
execution levels:
(i) Decision-making Level: The Board of Directors serves as the highest governing
body for ESG matters, participating in the formulation of our ESG strategies and
objectives and oversight. The Board’s Sustainability Committee, composed of both
independent and non-independent directors, is responsible for supervising the
implementation of ESG strategies and making major decisions. The Board Audit
Committee is responsible for supervising anti-corruption and anti-commercial
bribery measures, as well as conducting risk screening and audit work.
(ii) Management Level: To ensure the effective implementation of the ESG strategy, an
ESG Office has been established under the Sustainability Committee. Our ESG
Office consists of dedicated personnel and key issue leaders from various
departments who are responsible for executing ESG-related tasks, and driving the
continuous improvement of ESG governance.
(iii) Execution Level: Comprising subsidiaries and various departments, this level is
responsible for implementing the company’s ESG-related resolutions tailoring to the
specific circumstances of each business unit, ensuring the effective execution of
ESG principles throughout the entire company.
ESG Materiality Assessment
We attach great importance to the strategic significance of ESG factors in corporate
sustainable development. To ensure that we focus on the most impactful and relevant ESG
topics, we have established a systematic mechanism for identifying and evaluating material
issues, which involves five key steps: “creating a comprehensive list of material topics,
assessing the importance of each topic, engaging stakeholders through communication and
consultation, refining the prioritization of material topics, and presenting the final list to the
Board for review”.
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Based on the above process, we have developed a list of ESG topics and prioritized key
areas that have a significant impact on our operations.
Environment Social Governance
 Environmental
Management and Targets
 Climate Change
Response
 Waste and Pollution
Management
 Water Resource
Management
 Energy Management
 Biodiversity
 Food Safety Assurance
 Employee Development
 Occupational Health and
Safety
 Sustainable Supply
Chain
 Rural Revitalization and
Community Contribution
 Animal Welfare Practices
 Antibiotic Use
Management
 ESG Management and
Targets
 Material ESG Issues
 Business Ethics
Compliance
Business Ethics Compliance
We place great emphasis on business ethics, incorporating it as a core component of our
corporate governance system. A multi-level governance structure has been established,
featuring board-level coordination, execution by specialized committees, system-driven
mechanisms, and full employee engagement. Also, we have established a four-tier oversight
system, spanning from internal control process standardization to operational department
supervision, audit department monitoring, and ultimately company-wide accountability. In
terms of objectives, we have also set targets of 100% participation of new employees in
anti-corruption education and certification, 100% signing rate of integrity and self-discipline
commitment letters, and 100% annual resolution rate of anti-corruption and bribery reporting
cases.
Building on this foundation, we have introduced a series of concrete measures across
auditing, inspection, and training to further strengthen business ethics and anti-fraud
governance: First, the internal audit and anti-corruption teams have established mechanisms
for information sharing, enabling cross-verification in key risk areas and coordinated responses
to emerging threats. Second, regular integrity and honesty themed activities are organized to
raise employee awareness of ethical risks. Third, anti-fraud education campaigns cover all
employees and external partners. In 2024, we held around 100 training sessions aimed at
embedding the culture of integrity throughout the organization.
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Green and Win-Win Development
Environmental Management and Targets
We remain committed to green development and uphold the principle of “no cost shifting,
no hidden risks, and no evasion of responsibility.” We comply strictly with national
environmental laws and regulations and have established an internal environmental
management system based on both national and local regulatory requirements. By refining
internal policies and establishing a clear organizational structure, we ensure the effective
implementation of all environmental protection measures.
In terms of environmental commitments and targets, under the operation of the internal
environmental management system, we established the “Five-Step Environmental Goal”,
focusing on zero discharge, risk elimination, odor control, haze reduction, and carbon emission
reduction. We continuously refine our environmental management system. At the same time,
we have committed to setting operational targets across various environmental dimensions,
aiming to improve ecological benefits through sustainable development, including:
(i) Energy Conservation: Reduce energy consumption, improve energy efficiency, and
increase the share of renewable energy sources.
(ii) Resource Efficiency: Support the circular economy by reducing raw material usage,
enhancing resource recycling and reuse, and building an ecological industrial chain.
(iii) Waste Management: Follow the 5R principles to minimize waste generation and
promote the recycling and reuse of waste materials.
(iv) Climate Action: Reduce greenhouse gas emissions and contribute to mitigating
global warming.
(v) Water Resource Management: Conserve water resources, reduce the use of fresh
water, and improve water utilization efficiency.
(vi) Biodiversity Protection: Minimize the ecological impact of farming operations and
protect surrounding species and habitats.
Climate Change Response
Climate change is a shared global challenge. We fully recognize the close interconnection
between business, the environment, and society, and we actively respond to global climate
governance. We focus on carbon reduction across the entire value chain, exploring new models
for green development in the livestock industry and cultivating new drivers of high-quality
growth for the sector.
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At the strategic level of climate action, we have established medium-to-long-term carbon
reduction plans and five major carbon asset management initiatives: “carbon emission
reduction, carbon branding, carbon gain, carbon services, and carbon neutrality.” We have
defined clear emission reduction pathways for Scope 1 (direct emissions), Scope 2 (indirect
emissions), and Scope 3 (other indirect emissions). Through process innovation and
management optimization, we continue to reduce our carbon footprint and drive coordinated
progress toward net-zero across the entire value chain.
Raw Material Period (Scope 3) Crop Farming Upstream Transportation
 Soil carbon sequestration
 Chemical fertilizer
reduction
 Green procurement
 Localized procurement
 Multimodal transportation
 Optimization of supply
chain vehicles
Production Period
(Scope s1&2 ) Feed Processing Hog Farming Slaughtering
 Optimized soybean
meal feed
formulations
 Feed pipeline
transportation
 Canned feed
 Hog houses with fossil
fuel-free heating
 Photovoltaic power
generation
 Biogas utilization
 Ammonia Reduction
and Deodorization
 Grain-saving and
carbon reduction
 Green factories
 Photovoltaic power
generation
 Waste heat recovery
 Sustainable packaging
Consumption
Period (Scope 3)
Downstream
Transportation Food Processing Consumers
 New energy
transportation
 Routine monitoring
 Low-carbon pork
 High-quality pork
 Low-carbon pork
 High-quality pork
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In terms of risks and opportunities, we have established a systematic identification
process for climate-related risks and opportunities, covering short- and long-term impacts and
corresponding response strategies. On the one hand, we utilize scenario analysis tools to assess
the impact of physical factors — such as flooding and extreme temperatures — as well as
transition factors including policy, technology, market, and reputation on farming operations,
the supply chain, and asset value. On the other hand, we also identify potential growth areas
such as green products, green finance, and low-carbon technologies to ensure that we can
capture value while managing risks.
Based on the above process, we classify climate-related risks into two major categories:
physical and transition risks. These are further broken down into five specific risk events, and
systematically evaluated in terms of risk level and corresponding management measures:
Risk Type Risk Event Risk Level Potential Impact Response Measures
Physical
Risk /H1118/H1118/H1118/H1118/H1118
Floods, heavy
rainfall,
typhoons,
extreme
cold
weather,
extremely
high
daytime
temperatures
Medium Damage to farming
equipment and fixed
assets, reduced yield of
feed crops, and
increased feed costs;
water pollution may
exacerbate the spread of
diseases, affecting the
health of livestock;
increase the risk of
pathogenic
microorganisms and
disease infections in
hogs, leading to a
decline in pork quality;
higher operational
energy demand;
fluctuations in feed
storage, transportation,
and supply chains may
affect pork output;
increased water
consumption could
impact the stability of
water supply for
farming operations.
Prioritize high-ground
locations when selecting
farm sites, strengthen
drainage infrastructure,
conduct regular water
quality testing and
maintenance; develop
emergency response plans
for floods and typhoons,
and purchase catastrophe
insurance to reduce and
diversify economic loss
risks; strengthen disease
prevention and control;
develop intelligent
environmental control
systems to maintain stable
temperatures in hog
houses; enhance water
source monitoring to
ensure water supply;
promote the “farming —
bio-slurry fertilizer return
to fields — green
agriculture water recycling
model” to support
sustainable agricultural
development.
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Risk Type Risk Event Risk Level Potential Impact Response Measures
Transition
Risk /H1118/H1118/H1118/H1118/H1118
Tightening of
policy and
compliance
requirements
Medium The imposition of fees on
greenhouse gas emitters
drives greater attention
to low-carbon
production and
emissions reduction;
regulatory requirements
for disclosure reporting
are tightening,
increasing compliance
risks related to
greenhouse gases,
climate change,
environmental, and ESG
reporting. Enhanced
GHG emission controls
necessitate adjustments
to production methods.
Actively promote the use of
renewable energy such as
photovoltaic power
generation and biogas
utilization to reduce energy
consumption and
emissions; organize “Green
and Low-Carbon
Benchmark Farm” selection
activities to encourage
green and low-carbon
production; monitor
compliance policies to
ensure proper information
disclosure; promote multi-
storey hog farms to
conserve energy and reduce
GHG emissions.
Technology
Risk
Medium In the low-carbon
transition pathway,
immature technologies
hinder the development
of low-carbon farming,
while high R&D costs
create financial and
financing risks; rapid
iteration of low-carbon
technologies may lead
to premature
obsolescence of existing
equipment, investment
in R&D for innovative
eco-friendly breeding
technologies is required.
Participate in key national and
industry-level low-carbon
research projects to
improve the technical
system for pork production;
enhance communication
and cooperation to promote
comprehensive energy
solutions; expand the
reserve of low-carbon
technologies, strengthen
collaboration among
industry, academia, and
research institutions, and
enrich technological
approaches to reduce
greenhouse gas emissions
and enhance resource
recycling efficiency,
thereby decreasing GHG
emissions.
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Risk Type Risk Event Risk Level Potential Impact Response Measures
Market Risk Medium As environmental
awareness among
customers and
consumers increases,
low-carbon and eco-
friendly attributes may
become new criteria for
product selection; ESG
scrutiny from investors
is tightening, potentially
affecting financing
costs; emission
reduction requirements
are rising across the
upstream and
downstream of the
value chain.
Continue implementing
energy-saving and
emission-reduction
measures across the full
product lifecycle; provide
environmentally friendly
products that are easy for
consumers to understand;
strengthen training for the
sales team and enhance
their understanding of the
company’s progress and
performance in low-carbon
initiatives, to ensure
accurate communication
with customers; enhance
carbon management across
the value chain, expand the
scope of GHG inventory
and support suppliers in
reducing emissions during
feed cultivation and
transportation.
Reputation
Risk
Low Stakeholders are placing
increasing attention on
the company’s
performance in
addressing climate
change; failure to
respond in a timely
manner may negatively
impact the company’s
reputation.
The company’s senior
management establish a
Sustainability Committee
and a Green and Low-
Carbon Office to prioritize
and advance climate-related
initiatives; proactively
engage with stakeholders
through multiple channels
to understand and respond
to their concerns and
expectations in a timely
manner.
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At the same time, in terms of opportunities brought by climate change, we have identified
three key types of opportunity: products and markets, financing, and technology.
Type of
Opportunities Opportunities Potential Impact Response Measures
Products and
Markets /H1118/H1118
Low-carbon
Products and
Services
Customers are
increasingly
demanding low-
carbon and energy-
efficient products
and services,
including the need
to provide green
food to end
consumers.
Strengthen innovation in
green products to
enhance product value
and competitiveness.
Increase disclosure and
communication around
sustainable production
to build a strong brand
image. Expand into
new business areas to
mitigate operational
risks associated with
climate change.
Financing /H1118/H1118/H1118Green Finance New opportunities
are emerging in the
green economy,
including the
development of
carbon markets,
carbon sink
projects, green
financial services,
and climate-related
insurance.
Adopt crop-livestock
cycle to reduce
greenhouse gas
emission intensity and
participate in carbon
trading markets,
enhancing the carbon
sequestration capacity
of agriculture. Engage
in ESG rating
initiatives and improve
performance to attract
responsible investors
and lower financing
costs.
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Type of
Opportunities Opportunities Potential Impact Response Measures
Technology /H1118Green Technology Green technologies in
the livestock
industry continue
to advance, with
the cost of new
technologies
gradually
decreasing.
Actively research and
develop alternative
proteins such as plant-
based, microbial, and
insect proteins.
Continuously reduce
the proportion of
soybean meal in feed
formulations. Lead the
development of green
livestock farming and
build a sustainable,
eco-friendly brand.
To address climate change, we promote low-carbon initiatives across the industry value
chain through four key innovations — integrated crop-livestock systems, optimized soybean
meal feed formulations, hog house with fossil fuel-free heating, and ammonia reduction and
deodorization technologies — exploring new pathways for green development in animal
husbandry and fostering a new driving force for high-quality growth in the industry.
(i) Integrated Crop-Livestock System: By transforming livestock manure into a
resource, we have established a circular agricultural model of “hogs fertilize fields,
fields feed hogs,” enabling the reuse of organic waste and reducing reliance on
chemical fertilizers. In 2024, we laid approximately 28,381 kilometers of
agricultural support pipelines, delivering organic fertilizers to approximately 4.7
million mu of farmland, thereby replacing approximately 154,600 tons of chemical
fertilizers. This initiative enhanced soil organic matter by approximately 2.2%,
helped farmers increase income by approximately RMB1.4 billion, and achieved
cumulative carbon sequestration of approximately 1.5 million tons of CO
2e.
(ii) Optimized Soybean Meal Feed Formulations: In response to both soybean meal
price volatility and carbon reduction demands, we invested approximately RMB143
million in feed nutrition innovation and established a full-chain, grain-saving, and
low-carbon system encompassing raw material selection, formulation optimization,
and precision feeding. By applying technologies such as amino acid balancing and
unconventional protein development, we successfully reduced the proportion of
soybean meal in feed to approximately 7.3%. In 2024, this initiative led to a
cumulative nitrogen emission reduction of approximately 83,000 tons, equivalent to
approximately 161,300 tons of CO
2e in greenhouse gas emissions avoided. The
self-developed smart feeding system enables a “one-day-one-formulation”
approach, ensuring balanced nutrition while achieving grain savings and efficiency,
thereby reducing greenhouse gas emissions.
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(iii) Hog House With Fossil Fuel-Free Heating: We actively respond to the national
dual-carbon goals and the greenhouse gas emission reduction targets in the Paris
Agreement, and clarify the emission reduction path. At the production end, the
self-developed hog house with fossil fuel-free heating integrates a heat exchange
system that utilizes geothermal energy and waste heat from exhaust to maintain
stable indoor temperatures. Even in extreme cold conditions as low as -39.3°C, it
ensures an optimal environment for hog growth, and currently has achieved 100%
coverage in Heilongjiang, Jilin, Liaoning, Inner Mongolia, Hebei, Shandong,
Shanxi, Gansu, and Shaanxi. In 2024, this initiative reduced standard coal
consumption by approximately 407,400 metric tons, resulting in a carbon emissions
reduction of approximately 1.1 million metric tons of CO
2e.
(iv) Ammonia Reduction and Deodorization: We have made continuous advancements in
environmental protection by achieving full coverage of smart exhaust gas
purification systems across all hog houses, and strictly comply with policy
regulations such as the Odor Pollutants Emission Standards (ᅺ
๟) and the Pollutant Discharge Standards for Livestock and Poultry Breeding
Industry (ᅺ๟). Through intelligent management and
control, waste gas is centrally collected and purified to achieve clean and odorless
air discharge, significantly reducing ammonia emissions. These systems, equipped
with air filtration and precision deodorization technologies, have achieved an
ammonia removal rate of approximately 97.3%. In 2024, they contributed to a
nitrogen reduction of approximately 31,700 tons in ammonia, equivalent to
approximately 148,400 tons of CO
2e, effectively mitigating odor-related
disturbances in surrounding communities.
To advance our climate change mitigation strategy, we conducted a comprehensive carbon
inventory in accordance with the national standard Quantification Method and Requirements of
Product Carbon Footprint for Livestock Products (Ӌळ
) (GB/T 44903-2024), the 2006 IPCC Guidelines for National Greenhouse Gas
Inventories (2019 Refinement) (IPCC 2006یܸ2019)
issued by the Intergovernmental Panel on Climate Change (IPCC), and ISO 14064. Using 2024
as the baseline year, we have set phased GHG reduction targets: to reduce total GHG emission
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intensity by 1.5% by 2025, and to achieve a 20% reduction by 2030. This roadmap aims to
continuously lower our carbon footprint through a dual approach of emission reduction and
renewable electricity adoption.
Y ear ended December 31,
2022 2023 2024
Total greenhouse gas emissions
(10,000 tCO 2e)/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/ / 1,866.3
Scop e 1 – Direct GHG Emissions
(10,000 tCO 2e)/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118389.5 416.5 566.9
Scop e 2 – Indirect GHG Emissions
(10,000 tCO 2e)/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118340.6 381.5 433.4
Scop e 3 – Other Indirect GHG
Emissions
(10,000 tCO
2e)/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/ / 866.0
GHG Emission Reduction V alue
(10,000 tCO 2e)/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118408.9 434.0 529.1
Waste and Pollutant Management
Based on “Board of Directors — Environmental Monitoring Department —
Environmental Logistics Department” governance framework, we have strictly complied with
laws and regulations such as the Pollutant Discharge Standards for Livestock and Poultry
Breeding Industry (ᅺ๟) and the Pollution Control Standards for
Storage and Landfill of General Industrial Solid Wastes (ݑ
છՓᅺ๟), and developed and implemented a comprehensive emission control system
covering wastewater, exhaust gas, and solid waste:
(i) Wastewater : Livestock wastewater undergoes a three-step treatment process,
including “solid-liquid separation — anaerobic fermentation — aeration,” and is
fully converted into resources. During the fertilization season, it is used as fertilizer
for farmland, while the remaining water is further treated and reused for odor control
and cleaning within the facility. Domestic wastewater is also centrally treated in a
harmless manner and then reused, ensuring zero discharge of wastewater.
(ii) Exhaust Gas : The odor removal rate is improved to 99.9% through a dual-process
system combining air filtration hog houses and deodorizing walls. Boilers fully
adopt low-nitrogen combustion technology to meet the strictest national and local
emission limits. Biogas is desulfurized and dehydrated for power generation or as a
substitute for natural gas, with any excess safely burned.
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(iii) Solid Waste : Hog manure is composted and fermented on-site, then transported
outside for the production of organic fertilizers, achieving resource-based
fertilization and zero external discharge. Gastrointestinal matter is dehydrated after
resource utilization and then processed into fertilizers. General solid waste is
pre-treated by a resource utilization extruder and then sold externally for making
fertilizers, while the remaining sludge is dewatered after resource utilization to
reduce the moisture content and turned into nutrient soil and so on. Dead livestock
are handled through a full-process monitoring harmless procedure, including
“temporary storage at the site — sealed transportation — full process monitoring —
data reconciliation — high-temperature processing.” Domestic waste is disposed of
by municipal authorities, ensuring that solid waste at the farms is “fully collected
and fully utilized.”
The effectiveness of the management system is reflected in key indicators: In 2024, the
resource utilization rate of livestock wastewater and solid manure, the compliant disposal rate
of hazardous waste, and the harmless treatment rate of dead livestock and poultry all reached
100%. There was zero discharge of farming wastewater, approximately 905,800 cubic meters
of hog manure were fully utilized as resources, and ammonia emissions were significantly
reduced.
Building on these achievements, we have set strategic goals for 2025: to maintain a 100%
compliance rate for waste disposal and a 100% resource utilization rate for manure water and
solid manure. This will ensure a dual improvement in governance effectiveness and operational
efficiency.
Water Resource Management
We have developed a water usage strategy focused on “reducing waste, upgrading
processes, and recycling” by establishing regulations such as Standard Water Usage
Management System for Farms () and Water Conservation
Incentive and Penalty System for Slaughterhouses (). These
regulations define control boundaries for water intake, usage, and wastewater recovery for each
business unit, providing online data support for refined management, and reducing intake and
discharge risks.
Based on our water resource management strategy, we have implemented several specific
initiatives, starting with water resource recycling. These initiatives include the development
and promotion of manure wastewater purification and reuse technology, reclaimed water reuse
technology, smart feeding technology, energy-saving equipment innovations, spray system
upgrades, towerless water supply tank renovations, and the development of smart bathing
rooms and water conservation technologies for reduced tillage. These measures have already
achieved preliminary results. In 2024, our total water withdrawal reached approximately 214
million cubic meters, with a livestock water intensity of approximately 25.1 cubic meters per
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ton of product. The volume of wastewater reused amounted to approximately 4.7 million cubic
meters, and the total volume of water utilized through resource recovery reached
approximately 179 million cubic meters.
Looking ahead, we have set short-term and medium-term water conservation targets.
Using 2024 as the baseline, our goal is to reduce livestock water intensity by 0.2% and increase
wastewater reuse by 2.2 million cubic meters by 2025. By 2030, we aim to reduce livestock
water intensity by 18% and increase wastewater reuse by 24.8 million cubic meters compared
to the 2024 baseline. Through continuous technological innovation and strict implementation
of policies, we will steadily improve water usage efficiency, strengthen the advantages of water
resource recycling, and achieve long-term, sustainable water management performance.
Energy Management
We have identified “PV and Biogas Utilized for Green Power” as the core path for
achieving the “carbon peaking and carbon neutrality” goals, continuously increasing the
proportion of self-generated green electricity and reducing fossil energy consumption. Since
2018, we have made full use of the roofs of hog houses and idle land to build distributed
photovoltaic power stations. In 2024, electricity generation reached approximately 180 million
kWh, reducing CO
2e emissions by approximately 108,400 tons. The accumulated installed
capacity reached approximately 588.9 MW, with plans to add approximately 800 MW by 2025
and achieve approximately 10 GW by 2030. Photovoltaic electricity now covers part of
electricity consumption in breeding and slaughtering processes, with surplus electricity fed
into the grid to generate additional income, laying the foundation for achieving the 2025 and
2030 green electricity substitution targets of 4% and 30%, respectively, with the energy
consumption intensity expected to decrease by 5% in 2030.
In terms of waste-to-energy, we have established an anaerobic digestion — purification-
integrated utilization biogas closed-loop system. After purification, the bio-natural gas is partly
used for electricity and heating within the site, and the remaining portion is supplied to
surrounding communities and industrial users. This process achieves the synergistic benefits of
manure resource utilization, energy regeneration, and greenhouse gas emissions reduction. The
company plans to increase the biogas comprehensive utilization rate to 60% by 2030,
contributing to the green electricity substitution target and providing long-term support for our
green and low-carbon transformation.
Y ear ended December 31,
2022 2023 2024
Total Energy Consumption (ktce) /H1118/H1118/H1118/H1118/H11181,007.1 1,006.5 1,158.8
Energy Consumption Intensity
(tce/tons of product) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11180.2 0.2 0.2
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Biodiversity
We strictly adhere to the requirements of the Convention on Biological Diversity (ي
) and domestic ecological red-line controls, committing to not engaging
in production or operations within World Heritage Sites and prohibited development zones
at any level, while respecting all IUCN Ia-VI protected areas. In terms of management strategy,
we have adopted the TNFD LEAP framework, embedding the four-stage “Locate — Evaluate
— Impact Evaluation — Response Preparation” process across site selection, procurement, and
operations to systematically identify and mitigate ecological risks. Concurrently, we implement
a tripartite “Technology + Finance + Governance” approach to drive comprehensive risk
management.
Supported by robust management systems and a well-defined strategy, we focus on two
key actions and have achieved measurable results: Firstly, we have innovatived building
farming models, which increases land use efficiency by 4.3 times compared to traditional hog
houses. In 2024, the production capacity of the multi-storey hog farm reaches approximately
7.1 million hogs, saving a total of approximately 24,417 mu of farmland. In addition, we have
also integrated ecological restoration with the bio-slurry fertilizer recycling project. In 2024,
we improved approximately 318,200 mu of saline-alkali land and reclaimed approximately
90,700 mu of desert, totaling approximately 408,900 mu of land improvement. This initiative
provides sustained support for the restoration of the surrounding ecosystem and boosts
agricultural productivity. In 2024, we maintained a flawless record in biodiversity protection
with zero incidents of ecological damage and no land-use-related penalties.
Shared Responsibility
Food Safety Assurance
We strictly adhere to relevant laws and regulations, including the Food Safety Law of the
People’ s Republic of China (), Law of the People’ s Republic of
China on Agricultural Product Quality Safety () and so
on. We have formulated and implemented a series of normative documents, such as the Food
Safety and Quality Supervision System for All Employees ()
and the Food Safety Supervision and Management System (), and
have established a comprehensive food safety control mechanism that covers the entire “from
farm to table” supply chain. Upholding the management principles of “prevention first, risk
control, and full traceability,” we continuously improve its food safety and quality management
standards to ensure full supply chain transparency, controllability, and traceability, while
maintaining zero food safety incidents.
To enhance the systematization and execution of food safety management, we have, on
the foundation of improving systems and organizational support, further promoted
technological empowerment and management model innovation. We developed the “ 7+1+1 ”
food safety governance framework, forming a comprehensive protection network from source
to table. See “Business — Food Safety Management and Quality Control.”
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With the robust support of the “ 7+1+1 ” full-stack food safety management and quality
control system, we have achieved remarkable results in food safety control. Both external
audits and internal oversight have fully demonstrated the stability and efficiency of the
system’s operation.
Employee Development
We consistently adhere to the “people-oriented” development philosophy, with employee
rights protection and career development support as the two core pillars of human resources
management. We are committed to building a fair, equitable, and inclusive work and growth
environment. In terms of employee rights protection, we strictly follow the Labor Law of the
People’ s Republic of China (), Labor Contract Law of the People’ s
Republic of China (), and other relevant laws and regulations,
while actively implementing the ten principles of the United Nations Global Compact and
international labor standards. These include fundamental human rights commitments such as
the prohibition of forced labor, the elimination of employment discrimination, and the
protection of the rights to collective bargaining. Regarding compliance with employment
practices, we have implemented a range of policies, including Labor Contract Management
Measures (), Personnel Management System () and
so on, to regulate recruitment, promotion, compensation, and benefits management, ensuring
compliant operations. We are committed to achieving equal pay for equal work, and strictly
adhere to regulations on working hours, prohibiting excessive overtime and supporting
employees’ right to engage in collective bargaining and to freely form trade unions.
In terms of employee career development, we concurrently advance the development of
an employee career development system, supporting mutual growth for both employees and the
company. In terms of compensation and incentives, adhering to the principle of “those who
create value should benefit,” we have established a transparent compensation system that
includes salary, equity incentives, and benefits, supplemented by a potential compensation and
benefits system that offers opportunities for promotion, learning, and recognition. We
acknowledge the importance of our employees, and we have launched a number of employee
equity incentive plans, engaging over 8,000 employees. Regarding training, we invested
approximately RMB720 million in 2024 to ensure 100% training coverage for all employees,
with an average of 37 days of training per employee. In terms of talent selection mechanisms,
we have established clear leadership criteria and implemented a “talent pool development”
program.
Occupational Health and Safety
We have always adhered to the principle of “safety first.” We strictly comply with
relevant regulations such as the “Work Safety Law,” “Fire Protection Law,” and “Emergency
Response Law,” setting “zero accidents” as our long-term goal. We promote the concept that
“safety must be managed alongside business operations,” integrating safety management
requirements into all operational processes.
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In terms of specific implementation, we employ a “dual prevention mechanism” for risk
prevention and identification, which integrates safety risk grading management and hazard
investigation and rectification. This mechanism effectively shifts risk control measures to
earlier stages. In terms of emergency safety management, we have established an emergency
safety production management organizational structure and developed specific emergency
plans such as the Emergency Plan for Water Supply Failures in Production Areas (ఙਜᓙ˥
), Emergency Plan for Fire Accidents in Hog Houses (˦Өԫ
) and so on. We also provide emergency supplies, strengthen emergency
drills, and continuously improve our ability to manage safety risks and respond to unexpected
safety incidents. Additionally, through developing our safety culture, we strengthen safety
production awareness and establish long-term safety mechanisms. In 2024, we provided safety
production training and competency certification for all employees, reinforcing the safety
production responsibility system and clarifying baseline responsibilities.
In terms of occupational health management, we adhere to the principle of “prevention
first, integrated prevention and treatment” in occupational health management and have
established a “training — protection — monitoring” integrated occupational health prevention
and control system. Through the construction of a comprehensive occupational health training
system, occupational disease prevention campaigns, optimization of dust and noise control
measures, and upgrades to personal protective equipment, we create a safe and healthy working
environment. Additionally, we have established employee occupational health records and a
regular physical examination mechanism, strengthening management-level accountability for
safety performance to ensure a complete, closed-loop occupational health management
process. In 2024, we conducted 57 employee health training sessions, achieving 100%
employee coverage, and provided physical examination services to employees, continuously
improving the working environment.
Building upon our occupational health and work safety management system, we extend
stringent safety standards to contractors and third-party partners to ensure unified safety
practices across all operations. We have implemented the Safety Management Regulations for
Contractors and Partners (), specifying
requirements for safety qualification reviews, on-site supervision, and special operations
management, enforced through regular audits and a zero-tolerance policy for violations.
Contractors are required to complete work safety training, certification, and health screenings
equivalent to our employees. Meanwhile, we continuously enhance our work safety
management system through initiatives including the dual prevention mechanism, emergency
drills, and safety culture development, thereby comprehensively improving risk control
capabilities to achieve our “zero accidents” commitment. In 2024, we strengthened our work
safety management, achieving a recordable incident rate* of 1.36. According to Frost &
Sullivan, our incident and fatality rates are below the industry average.
*Note: The incident rate refers to the ratio of recordable work-related injuries and occupational diseases per
200,000 working hours.
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Sustainable Supply Chain
In the context of increasing global attention to ESG in supply chains, we have integrated
ESG into our supply chain management to ensure that suppliers fulfill their ESG
responsibilities, promote the development of a sustainable supply chain, and enhance
suppliers’ compliance capabilities in ESG governance, environmental protection, and labor
rights. We are committed to supporting the low-carbon transformation of the entire industrial
chain, creating an environmentally friendly, sustainable, and competitive industrial ecosystem.
We plan to achieve a 100% integrity agreement signing rate with suppliers, a 100%
procurement performance rate, and a 100% training coverage rate by 2025.
In terms of management system, regarding supplier conduct, we have established a
Supplier Code of Conduct () that sets out clear requirements for suppliers
in areas such as environmental protection, labor rights, and health and safety. In supplier
onboarding, we incorporate health, safety, and environmental protection requirements into the
qualification review process, follow the OECD Guidelines for Responsible Business Conduct
(), and have established a supplier ESG due
diligence procedure. We have developed and implemented a supplier performance evaluation
system that conducts semi-annual and annual risk assessments of all suppliers. In 2024, we
achieved 100% coverage of on-site due diligence for new suppliers and 100% coverage of
semi-annual and annual risk assessments. In supplier selection, we prioritize suppliers with
sustainability certifications, green and environmental certifications, and quality certifications.
At the same time, to enhance ESG governance in the supply chain, we actively conduct training
for suppliers to foster mutual growth with suppliers.
Looking ahead, to build a comprehensive sustainable value chain, we have set supply
chain goals in three key areas: supply chain capability building, supply chain transparency, and
supply chain sustainability. In supply chain capability building, the goal is to achieve 100%
ESG training coverage for core suppliers by 2026. In terms of supply chain transparency, by
2025, we aim to ensure that 30% of suppliers can provide transparency reports on their supply
chain. Regarding supply chain sustainability, by 2026, we aim for 95% of key suppliers to meet
the company’s sustainability standards.
Rural Revitalization and Community Contribution
As a key national leading enterprise in agricultural industrialization, we have always
actively responded to the Rural Revitalization Strategy. We are committed to integrating the
development of the company with the sustainable development of the regions in which we
operate. We actively participate in community construction, focus on improving people’s
livelihoods, and contribute to social progress. Our efforts are concentrated in three main areas:
benefiting and assisting farmers, rural construction, and rural education, with the goal of
promoting harmonious economic and social development. We strive to achieve a positive
interaction between the hog farming industry, the ecological environment, and social progress,
fostering a mutually beneficial relationship between the company and society.
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In terms of specific initiatives, regarding employment generation, as of December 31,
2024, we have established its operations in 25 provincial-level administrative regions, 109
cities, and 225 counties, providing around 100,000 jobs for rural areas. We prioritize hiring
local villagers, and attracting more than 40,000 university graduates to modern agriculture,
contributed to the revitalization of rural areas. In terms of increasing farmers’ income, we send
professional staff to the fields to assist farmers with plowing, planting, and pest control,
providing agricultural machinery, grass cutting, straw removal, and drought and flood
management. We guide them on crop management and planting techniques, enhancing crop
yield and quality, and promoting agricultural modernization. In 2024, we served approximately
4.7 million mu of farmland, conducted 9,293 agricultural technical services, covered 14,482
villages, increased farmers’ income by approximately RMB314.3 per mu, and contributed
RMB1.4 billion in additional income. In terms of supporting rural infrastructure, by the end of
2024, we had donated RMB107 million for public welfare projects, including road
construction, street lighting, and other community-enhancing initiatives, benefiting over a
thousand administrative villages. In terms of supporting educational development, we have
always adhered to the public welfare philosophy of contributing to rural revitalization and
fulfilling social responsibility. Since 2003, we have continuously carried out the “Gathering
Love to Support Education” series of activities.
Animal Welfare Practices
We have always promoted scientific hog farming, continuously improve animal welfare
concepts and practices, and comprehensively enhance the welfare level of hogs. We have
formulated and complied with relevant policies such as the Animal Welfare Policy (၅
ഄ) and the Muyuan Animal Welfare System (). We have
regarded animal welfare as a core component of our sustainable development strategy, and
have established a comprehensive animal welfare protection system that covers the entire hog
lifecycle. This system encompasses feed and water safety, environmental optimization, health
management, and transportation and slaughter to continually improve animal welfare
standards.
(i) Basic Nutritional Protection: We have developed a multistage smart feeding system
to accurately meets the nutritional needs of hogs at different growth stages, ensuring
the health of the herd. Feed production uses high-temperature sterilization and
closed pipe-chain transportation, and precisely adjust the sterilization temperature
through an intelligent control system to ensure comprehensive sterilization effects
and guarantee feed safety.
(ii) Living Environment: We have equipped our hog houses with a proprietary
environmental control system featuring advanced air filtration, sterilization,
ventilation and deodorization functions. The air filtration system can block aerosol
particles as small as 0.3 microns, effectively intercepting animal diseases. The
ventilation system separates air zones to prevent cross-contamination, while the
sterilization and deodorization functions achieve up to 99.9% efficiency in
eliminating pathogens, removing dust, and controlling odors.
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(iii) Health Management: We adhere to the animal health and welfare policy of
“prevention outweighs treatment, and care outweighs cure”. The pig farm is
equipped with water source ultrafiltration equipment, which can remove 99.99% of
pathogens, providing sufficient, clean and fresh drinking water for the pig herd and
blocking the waterborne transmission routes of pollutants and pathogens. Through
purifying infection sources, and protecting vulnerable populations, we safeguard
herd health to minimize disease occurrence and prevent illnesses. We implement a
“Prevention-Monitoring-Treatment” three-tier control system, utilizing smart
inspection robots, thermal imaging devices, and other equipment to monitor the
health of the hog herd in real-time. Needle-free injection technology reduces vaccine
stress responses, and the “SkyNet Project” has reduced the animal disease incidence
rate in core farms, even achieving zero disease occurrence.
(iv) Transportation: Our intelligent transport system ensures stress-free and comfortable
conditions throughout swine transportation, with suitable space and no
overcrowding. We follow the animal happiness and welfare policy of “respecting
and loving hogs, humanitarianism, and harmonious coexistence”. For humane
slaughter, we meet animal welfare requirements to ensure that hogs enjoy freedom
from fear and sorrow. We use liftable hog unloading platforms, design special hog
herding passages, and provide training for hog herders. The negative pressure
ventilation in the hogs’ waiting-for-slaughter environment is comfortable, avoiding
excessive stress on live hogs. We implement CO
2 stunning prior to processing,
guaranteeing zero stress or pain perception during both pre-slaughter and slaughter
procedures.
Antibiotic Use Management
We remain committed to the standardized use of veterinary drugs, strictly adhering to
national laws and regulations, and are dedicated to disease elimination and sustainable, green
farming practices to ensure the large-scale production of safer, higher-quality pork. From a
strategic perspective, we have established a systematic antibiotic management framework.
Specifically, we aim to reduce antibiotic usage per hog by more than 50% by 2027, compared
to 2024 levels, highlighting our strategic determination and long-term commitment to food
safety and sustainability. To achieve the antibiotic-free goal, we are advancing in three main
areas: first, disease monitoring and prevention; second, drug use safety management; and third,
antibiotic reduction.
(i) Disease Monitoring and Prevention : We adhere to the principle of “prevention first”
(˴) in health management, having established 110 veterinary diagnostic
laboratories and built a comprehensive system that covers biosecurity, disease
research, diagnostic testing, and clinical implementation.
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(ii) Drug Use Safety Management : We strictly comply with the “National Action Plan
for the Reduction of Antibacterial Drugs in V eterinary Medicine (2021-2025)” and
related regulations, fully prohibiting 25 types of growth-promoting antibiotics. By
2024, our veterinary registration rate had reached 100%. We have also implemented
a full-life-cycle drug traceability system, with graded prescription management and
33 regulatory measures to ensure the professional, standardized, and transparent use
of medications.
(iii) Antibiotic Reduction : We are progressing from producing “antibiotic-free meat” to
achieving “antibiotic-free stages” by employing methods such as drug classification
management, reduction demonstration farms, and health level color card
management.
RESEARCH AND DEVELOPMENT
Technology has always been the cornerstone of our development. We maintain our
competitiveness and lead the sustainable development through our technological advantages.
As of September 30, 2025, we had a research and development team of approximately 6,300
members. In 2022, 2023, 2024 and the nine months ended September 30, 2024 and 2025, our
R&D expenses were RMB1,142.4 million, RMB1,657.7 million, RMB1,747.2 million,
RMB1,267.6 million and RMB1,263.3 million, respectively, accounting for 0.9%, 1.5%, 1.3%,
1.3% and 1.1% of our revenue, respectively. During the Track Record Period, we cooperated
with universities, biotechnology enterprises and local government to facilitate the advancement
of hog farming and slaughtering technologies. Our dedication to research and development has
earned us awards and recognitions in China and overseas, including, but not limited to, the
W AFI Innovation Awards and China Patent Excellence Award. As of the Latest Practicable
Date, we have obtained over 1,700 patents — the largest IP portfolio among global hog farming
companies — and have undertaken eight National Key Research and Development Program of
China.
Our key R&D focuses and achievements are listed as below:
 Breeding technology : We have established a breeding platform by adopting
advanced genetic selection technologies to continuously improve and enhance the
performance of breeding hogs. Through continuous performance measurement in
stage of breeding, we select hogs with excellent reproduction and growth
performance. We conduct research and development on advanced breeding
technologies and breeding tools to improve the efficiency and effectiveness of
breeding, creating an industry-leading breeding system. See “— Hog Business —
Hog Farming Process.”
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 Smart Hog Houses : Our hog houses are equipped with smart equipment, such as hog
house environment control system, hog health management system and feeding
system, which can provide a clean, comfortable and healthy growing environment
for hogs. These smart equipment can reduce labor input and improve production
efficiency while ensuring animal welfare. We conduct research and development on
innovative technology and equipment using advanced technologies including big
data, and 5G communication. See “— Hog Business — Smart Hog Farming.”
 Hog Health Management : We regard hog health management as an important
direction of innovation and research. We insist on the principle of “prioritizing care
over prevention, prevention over treatment, and embracing a holistic approach to
hog health management” (ԣ,ط׵ࠠ,طand have established our
disinfection and animal diseases prevention system. We also adopt various disease
prevention and control measures, and have developed a biosecurity warning and
prevention system. See “— Hog Business — Hog Health Management.”
 Feed Formulation : We establish and design various dynamic nutritional models for
the growth of hogs at different growth periods. We have also developed the
optimized soybean meal feed formulations to optimize the proportion of soybean
meal used in feed production while providing sufficient nutrition for hogs, thus
improving cost structure and reducing nitrogen emissions. See “— Hog Business —
Feed Production.”
INVENTORY, W AREHOUSE AND LOGISTICS
Inventory
Our inventories primarily include consumable biological assets, raw materials and
finished goods. Consumable biological assets mainly include hogs under various growth
periods. Raw materials mainly include feed ingredients. Finished goods primarily consist of
meat products. We maintain stringent inventory control and appropriate inventory levels, and
we periodically review our inventory levels for slow-moving inventory, obsolescence or
declines in market value. We have implemented detailed warehousing operating procedures
such as our first-in, first out inventory management practice, timely record keeping,
appropriate labeling and periodic stocktaking. We manage our inventory levels based on
anticipated demand, estimates of our sales volume for the next period, existing levels of
inventory stock, and prevailing price levels of raw materials.
Warehouse
We have implemented a central warehouse model equipped with various digital
management tools, such as WMS, to ensure supply chain transparency and inventory
efficiency. The model establishes a one-stop warehouse management service platform for
closed loop digital collaboration spanning suppliers, central warehouses and clients.
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Logistics and Transportation
For hogs, customers shall arrange their own transport vehicles and personnel to collect
goods from our designated hog farms. They are responsible for the safety of hogs during
transportation, as well as all risks and costs related to transportation. For meat products, we
might arrange transportation in respond to customers’ requests. If we do, we assume the risk,
responsibility and cost of any damage until the goods reach the agreed location, after which the
responsibility transfers to the customer. If customers handle transportation, they must arrange
vehicles to collect the goods and bear all risks and expenses once the products are loaded.
Customers must provide us with details of the pick-up staff and vehicles in advance to ensure
timely collection. Their vehicles must meet the requirements specified in the sales contracts;
otherwise, we may refuse to load without any liability.
During the Track Record Period and up to the Latest Practicable Date, we outsourced all
of our product deliveries to logistics service providers who are Independent Third Parties, other
than Henan Muyuan Logistics Co., Ltd. (ʮ̡), who is a subsidiary of
Muyuan Group and thus our connected person. We have entered into a framework agreement
with Muyuan Group, for itself and on behalf of Muyuan Group Connected Persons, pursuant
to which our Group will procure, among others, logistics services. See “Connected
Transactions — Partially-Exempt Continuing Connected Transaction — Procurement of
Services”. Utilizing third-party logistics providers for transportation helps us minimize capital
investment and eliminates the need to develop and maintain our own extensive logistics
system. Additionally, the current logistics services market offers us sufficient alternative
options for providers who can offer terms similar to those of our existing logistics service
providers.
During the Track Record Period and up to the Latest Practicable Date, we did not
experience any material delays or improper handling of our products by logistics providers that
would have a material adverse impact on our business operations, or suffer from any material
shortage of logistics services.
SEASONALITY
The demand for our products is affected by consumers’ consumption patterns. The
demand for our products is typically relatively higher before traditional festivals, such as
China’s Spring Festival, Mid Autumn Festival and National Day.
COMPETITION
We mainly compete with hog farming companies and hog slaughtering companies in
China. According to Frost & Sullivan, the tightening environmental regulations have led to the
decline in number of hog farming companies around the world. In 2024, the global hog farming
industry was relatively fragmented, with top five market players accounting for 11.8% of the
market shares in terms of sales volume. As of the same year, the top five market participants
in China, measured by sales volume, held a market share of 20.9%. According to Frost &
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Sullivan, the entry barriers of China’s hog farming industry are mainly capital barrier,
management barrier, technology barrier and ESG barrier. Regarding China’s hog slaughtering
and processing industry, the slaughter volume grew steadily from 264.9 million heads in 2021
to 337.7 million heads in 2024, and is projected to grow gradually from 363.4 million heads
in 2025 to 452.7 million heads in 2029, representing a CAGR of 5.6% from 2025 to 2029.
Driven by policies that aim to promote the standardization and centralization of hog
slaughtering, top five market participants in the hog slaughtering and processing industry in
China occupies a market share of 10.4% in terms of slaughter volume in 2024. Since 2021, we
have ranked first globally in the hog farming industry in terms of production capacity and sales
volume of hogs for four consecutive years. In addition, we ranked fifth globally and first in
China in the hog slaughtering and processing industry in terms of slaughter volume in 2024.
See “Industry Overview”.
EMPLOYEES
As of September 30, 2025, we had 113,987 full-time employees, the majority of whom
were based in mainland China. The following table sets forth a breakdown of our employees
by function as of September 30, 2025:
Number of
employees Percentage
Function
Production /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111891,672 80.4%
Sales /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11186,311 5.5%
Technology /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11187,258 6.4%
Finance /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,158 1.9%
Administration /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11186,588 5.8%
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118113,987 100.0%
We primarily recruit employees through offline channels, such as campus recruitment at
universities and job fairs, and online channels, such as recruitment websites and live
broadcasts. We recruit our employees based on a number of factors including work experience
and educational background. We endeavor to attract and retain talent, taking into account
factors such as our business strategies, development plans, industry trends and the competitive
landscape when making recruitment decisions. We do not engage outsourced employment
agents.
In alignment with our business development plan, we provide continual, systematic and
targeted training programs to our employees to improve their skills and capabilities, including
induction training and general skills training for all employees, professional training for
engineers, and management skills training for middle to high-level managers. We also set up
online learning platforms to support employees’ self-learning. We adopt evaluation programs
and certification systems through which we regularly conduct training on topics such as
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production safety and operations, career development and corporate culture through online
courses, exam certification and offline training sessions. We have established a tutorial system,
under which newly recruited employees are matched with senior staff to quickly become
familiar with workflow and operations. We also believe it is critical to develop skilled young
employees into experienced and knowledgeable talent, contributing to our long-term growth.
Each of our newly joined employees is assigned a mentor, who regularly provides guidance and
support throughout their career.
We have established labor unions in accordance with the applicable PRC law. We enter
into employment contracts and agreements regarding confidentiality and intellectual property
with our directors and senior management. We participate in various applicable employee
social security plans according to relevant laws and regulations, including housing, pension,
medical, work-related injury, maternity and unemployment benefit plans. We believe that we
maintain a good working relationship with our employees, and have not experienced any major
labor disputes.
INTELLECTUAL PROPERTY
Our success and ability to compete depend in part on our ability to maintain the
proprietary aspects of our technologies. We consider our patents, trade secrets and other
intellectual property rights to be core factors on which our business depends. We rely on a
combination of patents, trademarks, trade secrets, copyrights, confidentiality agreements, and
other statutory and contractual provisions to protect our intellectual property.
As of the Latest Practicable Date, our Company and Major Subsidiaries held 188
trademarks, 1,075 registered patents, 185 computer software copyrights, 22 work copyrights
and 346 domain names in China. These intellectual property rights are mainly related to hog
farming and hog breeding.
During the Track Record Period and up to the Latest Practicable Date, we did not
experience any threatened or pending disputes, litigation or legal proceedings for any material
violation of intellectual property rights of any person. However, our inability to adequately
protect our intellectual property rights could materially and adversely affect our competitive
position, business, financial condition and results of operations. See “Risk Factor — We may
not be able to adequately protect our intellectual property and know-how, which could
materially and adversely affect our business.”
PROPERTIES
As of the Latest Practicable Date, our Company and Major Subsidiaries owned the land
use rights of 53 parcels in China, with an aggregate site area of approximately 3,159.9 thousand
square meters. All of these land parcels have been granted land use right certificates. As of the
same date, our Company and Major Subsidiaries owned 803 buildings in China, with an
aggregated GFA of 1,674.4 thousand square meters. These land parcels and buildings are
primarily used as warehouses, workshops, offices and production plants.
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As of the Latest Practicable Date, our Company and Major Subsidiaries leased 854 land
parcels with an aggregate site area of approximately 181.1 thousand mu in China. As of the
same date, our Company and Major Subsidiaries had 168 leased buildings in China, with an
aggregate GFA of 159.4 thousand square meters, representing 7.47% of the total properties
used by our Company and Major Subsidiaries. These leased land parcels and buildings are
primarily used as labs, dormitories, disinfection stations, offices and warehouses.
As of the Latest Practicable Date, we did not have any single property with a book value
accounting for 15% or more of our total assets. According to Chapter 5 of the Hong Kong
Listing Rules and section 6(2) of the Companies Ordinance (Exemption of Companies and
Prospectuses from Compliance with Provisions) Notice, this document is exempt from the
requirements of section 342(1)(b) of the Companies (Winding up and Miscellaneous
Provisions) Ordinance to include all interests in land or buildings in a valuation report as
described under paragraph 34(2) of the Third Schedule to the Companies (Winding up and
Miscellaneous Provisions) Ordinance.
Defects in our Owned Buildings
During the Track Record Period and up to the Latest Practicable Date, our Company and
Major Subsidiaries had not obtained the building ownership certificates for ten of our owned
buildings, which are all based on our self-owned land, with an aggregated gross floor area of
approximately 299.0 thousand square meters in Liaoning, Inner Mongolia, Henan, Anhui, and
Heilongjiang Provinces, China. We have obtained all permits necessary for such properties’
planning and construction to ensure compliance with relevant governmental authorities
throughout the construction process, and we were in the process of obtaining relevant building
ownership certificates as of the Latest Practicable Date. These properties are used as feed
production plants, slaughtering plants and offices. We are in the progress of obtaining the
certificates because these buildings are either in the final stages of inspections, or have passed
final inspection but are currently undergoing building surveying, after which the ownership
certificate will be processed upon completion of the survey reports. As advised by our PRC
Legal Adviser, we may face the risks of: (i) being requested to cease the use of the relevant
buildings and (ii) paying penalties for the violation of relevant laws and regulations, which,
under the PRC Law, would be a maximum of RMB27.9 million.
We have communicated with the relevant competent governmental authorities which
confirmed that as of the Latest Practicable Date, no material administrative action, fine or
penalty had been imposed by the relevant regulatory authorities with respect to the failure to
obtain the building ownership certificates. Our PRC Legal Adviser is of the view that the
relevant government authorities are competent to provide such confirmation. We have obtained
an indemnity letter from Muyuan Group to indemnify our Group against any losses caused by
the defects in the ownership of such properties. Based on the above, our PRC Legal Adviser
is of the view that any failure to obtain such building ownership certificates will not have a
material adverse effect on our production and operations.
Our Directors believe that the defects of the relevant properties would not materially and
adversely affect our business, results of operations and financial condition, primarily because:
(i) as confirmed by our PRC Legal Adviser, the failure to obtain such building ownership
certificates would not have a material adverse effect on our production and operations; (ii)
most of these properties are used as feed production plants and offices, which either occupy
relatively small area; or are highly replaceable; (iii) if we are ordered to suspend our use of
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these properties, our general production activities would not be materially disrupted as we can
easily switch to our other feed plants or the market to obtain feed; and (iii) Muyuan Group has
undertaken to indemnify the Group for any losses caused by the defects in the ownership of
such properties.
To prevent any recurrence of similar incidents in the future, we have established and
implemented both preventive and remedial measures to ensure our compliance with regulations
in relation to obtaining requisite certificates or completing relevant procedures for our use of
real properties in the future: (i) we plan to provide regular training on applicable legal and
regulatory requirements in relation to the use of real properties to our senior management; and
(ii) prior to the commencement of the operation or the acquisition of a new facility, a
designated person shall ensure all requisite approvals and permits have been obtained.
Defects in our Leased Buildings
According to applicable PRC administrative regulations, both the lessor and the lessee of
a lease agreement are required to file the lease agreement with the relevant government
authorities within 30 days of its execution. As of the Latest Practicable Date, our Company and
Major Subsidiaries had not filed our lease agreements for 159 buildings we leased with the
local housing administration authorities as required under PRC laws and regulations. We were
unable to file these lease agreements as our landlords have not obtained or have yet to provide
the necessary documentation for lease registration. As advised by our PRC Legal Adviser, the
absence of registration will not affect the validity of the lease agreements, nor materially and
adversely affect the operations of our Company and Major Subsidiaries, but we may be subject
to a potential total exposure to fines of RMB159,000 to RMB1,590,000 for those unregistered
lease agreement if required by the relevant competent authorities.
As of the Latest Practicable Date, there were defects in some of our leased buildings. As
of the same date, the ownership certificates or other similar proof for 10 of our Company and
Major Subsidiaries leased buildings (representing approximately 0.72% of our Company’s and
Major Subsidiaries’ owned and leased buildings in terms of gross floor area) had not been
provided to us by the relevant lessors. These leased buildings were mainly used as offices, staff
accommodations, quarantine facilities, warehousing facilities, transfer points, laboratory
facilities, and disinfection stations (decontamination centers). As advised by our PRC Legal
Adviser, if these lessors are not the owners of the buildings and they have not obtained consent
or approval for sub-lease from the owners or their lessors, or permits from the relevant
governmental authorities, our leases could be terminated and we may be required to relocate,
in which case we will be entitled to demand the relevant lessor return prepaid rent and
indemnify us for damages caused by the title defect. In the event that relocation becomes
necessary, we believe we can promptly find suitable alternative buildings for relocation under
comparable terms, without incurring significant additional costs, considering the nature and
respective size of use of these leased buildings. Our Directors believe that the defects in our
leased buildings will not, individually or in the aggregate, materially affect our business and
results of operations, considering such leased buildings account for a small portion of our
overall owned and leased buildings in terms of gross floor area.
See “Risk Factors — A failure to comply with PRC property-related laws and regulations
regarding certain of our owned or leased land or buildings may adversely affect our business.”
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Tax Disputes in Relation to our Properties
During the Track Record Period and up to the Latest Practicable Date, eight of our
subsidiaries received tax treatment decisions. The tax authorities ordered the eight subsidiaries
to pay the arrears of cultivated land occupation tax or real estate tax for the period from 2017
to 2025 in the relevant tax treatment decisions. According to the tax treatment decisions, the
aggregate alleged tax liability was RMB157.1 million, related to our hog farms or the land
occupied by hog farms.
Each of the eight subsidiaries has provided a full tax guarantee or regulated fund deposit
to the relevant tax authorities for the alleged underpaid cultivated land occupation tax or real
estate tax, including the potential late payment as of the date of the payment of tax guarantee.
However, we hold a different view from the relevant tax authorities regarding the alleged
underpaid cultivated land occupation tax and real estate tax.
All eight subsidiaries had commenced administrative reconsideration procedures in
relation to the tax treatment decisions. As of the Latest Practicable Date, six of these
reconsideration procedures had been completed and were undergoing administrative
proceedings, while the other two reconsideration procedures remained ongoing.
 In terms of cultivated land occupation tax under dispute, given that the properties
constructed by the relevant subsidiaries are mainly for hog farming purpose, directly
serving agricultural production, the occupied land shall be classified as agricultural
land and be exempt from cultivated land occupation tax. As such, as advised by tax
advisors, the Directors are of the view that the relevant subsidiaries in question
should not be liable to pay the cultivated land occupation tax, and that the risk that
we would obtain unfavorable outcomes in relation to relevant administrative
proceedings, if any, is relatively low.
 In terms of the real estate tax under dispute, given that the hog farms of the relevant
subsidiaries in question are primarily located in rural agricultural production areas,
and the relevant properties are used for agricultural, forestry, animal husbandry and
fishery production, they shall be exempt from real estate tax. As such, as advised by
tax advisors, the Directors are of the view that the relevant subsidiaries should not
be liable to pay the real estate tax, and that the likelihood that we would obtain
favorable outcomes in relation to relevant administrative proceedings, if any, is
high.
We are of the view that the maximum potential tax liability under disputes in relation to
the aforementioned eight subsidiaries would be RMB314.3 million, including the
aforementioned alleged underpaid cultivated land occupation tax and alleged underpaid real
estate tax, and the potential late payment fees as of the Latest Practicable Date. Such amount
only accounted for approximately 0.28% of our revenue for the nine months ended September
30, 2025 and for approximately 2.08% of our net profit as of the same date, which we believe
is immaterial. Accordingly, our Directors are of the view that the possibility of receiving
unfavorable decisions from the aforementioned administrative proceedings, if any, is remote,
and no provision has been provided by our Group as of September 30, 2025 according to
Accounting Standard for Business Enterprises No. 13 — Contingencies as the possibility of an
outflow of economic benefits is remote.
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During the Track Record Period and up to the Latest Practicable Date, four of our
subsidiaries received tax administrative penalty matter notice, rectification order, or tax matter
notices from relevant tax authorities (the “ Tax Letters ”). The Tax Letters are procedural
communication by nature and does not amount to any administrative penalty. The tax
authorities asked the four subsidiaries to pay the arrears of cultivated land occupation tax or
real estate tax for the periods from 2017 to 2025 and asked one of the four subsidiaries to pay
the arrears of union fee and disability employment security fund. According to the Tax Letters,
the aggregate alleged tax liability was RMB83.1 million. However, we hold a different view
from the relevant tax authorities regarding the alleged underpayments.
As of the Latest Practicable Date, all the four subsidiaries have been actively
communicating with the local tax authorities regarding the matters raised in the Tax Letters,
and no tax treatment decision has yet been issued. For the same reasons discussed above in
relation to the cultivated land occupation tax and the real estate tax under dispute, as advised
by tax advisors, the Directors are of the view that, (i) the relevant subsidiary in question should
not be liable to pay the cultivated land occupation tax, given that the occupied land shall be
classified as agricultural land and be exempt from cultivated land occupation tax; and (ii) the
relevant subsidiaries should not be liable to pay the real estate tax, given that they are primarily
located in rural agricultural production areas, and the relevant properties are used for
agricultural, forestry, animal husbandry and fishery production, thus they shall be exempt from
real estate tax. As to the allegedly underpaid union fee and disability employment security
fund, the Directors believe that the subsidiary should not be liable for these amounts based on
the periods and calculation methods of our operation records.
We are of the view that the maximum potential tax liability under disputes in relation to
the aforementioned four subsidiaries would be RMB180.9 million, including the
aforementioned allegedly underpaid real estate tax, alleged underpaid cultivated land
occupation tax, allegedly underpaid union fee and disability employment security fund, and the
potential late payment fees as of the Latest Practicable Date. Such amount only accounted for
approximately 0.16% of our revenue for the nine months ended September 30, 2025, and for
approximately 1.2% of our net profit as of the same date, which we believe is immaterial.
Accordingly, our Directors are of the view that the possibility of receiving tax treatment
decisions in relation to the issues under the Tax Letters is remote, and no provision has been
provided by our Group as of September 30, 2025 according to Accounting Standard for
Business Enterprises No. 13 — Contingencies as the possibility of an outflow of economic
benefits is remote.
The Reporting Accountants have conducted their work in accordance with Hong Kong
Standard on Investment Circular Reporting Engagements 200 “Accountants’ Reports on
Historical Financial Information in Investment Circulars” issued by the Hong Kong Institute of
Certified Public Accountants to express an opinion on the Historical Financial Information.
The reporting accountants’ opinion on the Historical Financial Information for the Track
Record Period as a whole is set out on page I-1 to I-3 of the Appendix I to this prospectus.
The aforementioned communications with tax authorities, administrative reconsideration
procedures and any subsequent administrative proceedings, regardless of outcome, are likely
to result in substantial costs and a diversion of our resources, including our management’s time
and attention. See “Risk Factors — We may be subject to tax disputes, additional tax liabilities
or other administrative actions in the future, and disagreement with tax authorities could
adversely affect our business, financial condition and results of operations.”
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LICENSES, PERMITS AND CERTIFICATES
As of the Latest Practicable Date, our Company and Major Subsidiaries have obtained all
licenses, approvals, permits and certificates that are material and necessary for our major
businesses in the jurisdictions where our Company and Major Subsidiaries operate, and such
licenses, permits, approvals and certificates are valid and subsisting.
INSURANCE
We maintain insurance policies primarily covering hog insurance and property all risk
insurance. Our employer related insurance mainly consists of contributions to or provisions of
the employee pension insurance, work-related injury insurance, maternity insurance,
unemployment insurance, medical insurance and housing provident funds as required by the
PRC laws and regulations. We believe that our insurance coverage is in line with the general
practice in the PRC of the industry in which we are engaged.
DATA PRIV ACY AND SECURITY
During the ordinary course of our business, we will collect and maintain certain customer
information to the extent necessary for the sales and delivery of our products and provision of
services, primarily including customers’ contact information, transaction records, ID cards,
business licenses and payment information. The collection of such data facilitates user
registration, order processing and other works related to the sale of our products. All data
collected during our ordinary course of business are stored in mainland China.
We have implemented measures to preserve the confidentiality of such information to
ensure regulatory compliance. We have established a comprehensive cybersecurity and data
protection system covering organizational structure, internal policies, technical measures and
staff training. Our management framework clearly defines the responsibilities of each role and
we have developed policies addressing, data classification, access control, risk assessment,
emergency response and the full lifecycle of personal information management. We have
completed filings for our internal systems under the Cybersecurity Multiple Level Protection
Scheme and implemented a range of technical measures, including advanced encryption
techniques for both data storage and transmission, firewalls, intrusion prevention, log
management, data backups and regular risk assessments and audits to identify and mitigate
potential security vulnerabilities. In addition, we have established stringent access controls and
monitoring mechanisms to prevent unauthorized data access and ensure that data handling
practices comply with both domestic and international data protection standards. Furthermore,
we continuously enhance our employees’ security awareness and protection capabilities
through comprehensive information security training and emergency drills. Through these
measures we are able to effectively safeguard network and customer data security. For
example, our Smart Muyuan system (౽ᑌ̨̻) with over 36,000 users as of September
30, 2025, has been filed as Level 3 under the Multiple Level Protection Scheme in accordance
with relevant laws and regulations in 2024. When users register and log in to our Smart
Muyuan system for the first time, we present our privacy policy and require users to actively
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indicate their consent by checking a box before they can use the system. Where the Smart
Muyuan system requests access to device permissions (such as location or camera) or collects
sensitive personal information, we obtain users’ consent through system pop-ups or separate
buttons. Through these measures, we have lawfully obtained necessary consents from users
prior to collecting their personal information through the Smart Muyuan system.
During the Track Record Period and up to the Latest Practicable Date, we did not have
any cross-border data transmission or provided any data to third parties. In addition, we did not
experience any material data leakage or data loss or any material unauthorized use of
customers’ personal information. As advised by our PRC Legal Adviser, we had complied with
the applicable laws and regulations with respect to data privacy, cybersecurity and personal
data protection during the Track Record Period and up to the Latest Practicable Date in all
material aspects. Given that legislation and law enforcement in the PRC on data privacy and
security are still evolving, we will closely monitor further regulatory developments and take
appropriate measures in a timely manner.
LEGAL PROCEEDINGS AND COMPLIANCE
Legal Proceedings
We may be, from time to time, party to court, arbitral and administrative proceedings
arising in the ordinary course of our business operations. During the Track Record Period and
up to the Latest Practicable Date, we and our subsidiaries are not involved in any court, arbitral
or administrative proceedings which we believe may be of material importance to our assets
and liabilities or profits and losses nor, so far as we are aware, are any such proceedings
pending or threatened. See “Risk Factors — Risks Relating to Our Business and Industry —
We are exposed to the risk of litigation, claims and disputes, which may cause us to pay
significant damages and incur other costs.”
Compliance
During the Track Record Period and up to the Latest Practicable Date, we had complied
with all relevant laws and regulations applicable to us in all material respects concerning our
operations, save for the incidents as disclosed below, which we do not believe have had, or will
have a material adverse effect on our business operations or financial results. For more
information about the laws and regulations applicable to us, see “Regulatory Overview.”
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The following table sets forth certain non-compliant incidents of our subsidiaries during the Track Record Period:
No. Non-Compliance incidents Administrative fine received Remedies and rectification measures taken
1 /H1118/H1118/H1118On July 11, 2024, our subsidiary in
Y uanzhou was penalized for
discharging water pollutants in excess
of the national emission standards.
RMB176,500 (at the lower end of the
statutory range).
Organized specialized training on
environmental compliance to enhance
management capabilities, strengthened
its environmental management in
response to the incident, and launched
an internal reporting system.
2 /H1118/H1118/H1118On July 16, 2024, our subsidiary in
Tongshan was penalized for failing to
implement environmental
self-monitoring requirements, violating
water pollution prevention and control
regulations, and violating management
requirements.
RMB138,000 for failure to implement
environmental self-monitoring
requirements, RMB300,000 for
violating water pollution prevention
and control regulations (at the lower
end of the statutory range), and
RMB3,000 for violating management
requirements (at the lower end of the
statutory range).
Implemented self-monitoring measures
that aligned with regulatory standards,
and strengthened its resource reporting
system with strict filing processes.
3 /H1118/H1118/H1118On July 24, 2024, our subsidiary in
Shuangyang was penalized for failing
to promptly collect waste generated
during livestock and poultry breeding,
which resulted in the leakage of
livestock and poultry manure.
RMB40,000 (at the lower end of the
statutory range).
Strengthened its environmental
management by installing four
additional valves and two emergency
pools to prevent wastewater leaks,
upgraded its facilities, and launched an
internal reporting system.
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No. Non-Compliance incidents Administrative fine received Remedies and rectification measures taken
4 /H1118/H1118/H1118On September 18, 2024, our subsidiary in
Tongyu was ordered to halt
construction, and was penalized for
commencing construction without
obtaining the required environmental
impact assessment approval.
RMB13,891.35 (at the lower end of the
statutory range).
Organized specialized training on
environmental compliance to enhance
management capabilities, strengthened
the review and approval system.
5 /H1118/H1118/H1118On March 18, 2024, our subsidiary in
Laohekou was penalized for failing to
fulfill its obligation to identify and
address environmental safety hazards
and for failing to establish a record of
hazard identification and management.
RMB20,000. Expanded collection pool capacity,
introduced advanced automated systems
for real-time wastewater monitoring,
and strengthened emergency
preparedness through regular training
and strict incident reporting protocols.
6 /H1118/H1118/H1118On February 22, 2024, our subsidiary in
Qingjiangpu was penalized for
exceeding the emission standards for
atmospheric pollutants.
RMB100,000 (at the lower end of the
statutory range).
Enhanced sterilization and deodorization
systems, replaced underperforming staff
with skilled personnel, planted double
rows of shrubs, and deepened
community engagement.
7 /H1118/H1118/H1118On March 6, 2022, our subsidiary in
Jinhu was penalized for failing to
implement environmental protection
measures during project construction
and operation.
RMB240,000. Strengthened internal controls to address
operational and community concerns,
worked with the government to
compensate nearby farmers, launched a
relocation plan, and supported local
livelihoods.
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For the incidents disclosed above, we have taken comprehensive rectification measures to
prevent recurrence, including enhanced training programs, rigorous inspections across all
operational and construction sites, and improved operational protocols. These measures reflect
our commitment to ensuring compliance with applicable laws and regulations. As such, our
Directors are of the view that these incidents, the associated administrative fines, did not and
will not have a material adverse effect on our business, operations, or financial condition.
RISK MANAGEMENT AND INTERNAL CONTROL
We are exposed to various risks during our operations and have established risk
management systems with relevant policies and procedures, creating a system that includes the
business departments, legal department and internal audit department, which we consider to be
appropriate for risk prevention, risk control and emergency responses in our business
operations, and are dedicated to continually improving these systems. Our risk management
measures include:
 The Board as the key decision-making body . Our Board is responsible for
establishing risk management strategy, deciding our Company’s risk appetite,
regularly evaluating the effectiveness of our internal control systems and
maintaining our Company’s risk management at an appropriate and effective level.
 Business departments as the first line of defense . Our business departments
establish compliance management systems and processes, incorporating compliance
requirements into job responsibilities and conducting compliance risk assessments.
Risks are categorized into known risks, unknown risks and uncertain risks, with
corresponding management measures being developed. They identify compliance
risks in key positions, compile risk lists and response plans, and investigate and
rectify violations.
 Legal department as the second line of defense . The legal department is responsible
for the construction and effectiveness evaluation of the compliance management
system, and coordinates and manages the identification, warning and response to
corporate compliance risks. The department internalizes external regulations,
strengthens compliance system construction, compliance review and assessment,
and organizes and promotes daily compliance work across departments to ensure the
effective operation of the compliance system.
 Internal Audit department as the third line of defense . The audit department has
built a comprehensive, authoritative and efficient audit supervision system. It
implements a closed-loop audit supervision process of risk assessment, audit
planning, audit supervision, issue investigation, internal control improvement and
re-audit. The department is committed to creating an open and collaborative audit
supervision ecosystem to maximize supervision effectiveness.
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To embed a culture of compliance into our daily workflow and set expectations for
individual behavior across the organization, we regularly review our risk management policies
and internal management procedures, adopt strict internal accountability and conduct
compliance training.
In 2022, 2023, 2024 and the nine months ended September 30, 2024 and 2025, we used
future contracts, foreign exchange forward contracts and interest rate swap contracts to hedge
risks, we also used bank wealth management products to reallocate short-term idle capital. We
recorded financial assets held for trading of RMB3.1 million, RMB21.2 million, RMB2.9
million and RMB2,208.3 million as of December 31, 2022, 2023, 2024 and as of September 30,
2025, respectively.
During the Track Record Period, we mainly entered into financial derivative instruments
to hedge against hog price fluctuations and reduce market risks. Since the launch of hog futures
in China in January 2021, we were among the first companies in China to establish hog futures
delivery warehouses and participate in the delivery of the initial batch of futures contracts. We
usually enter into transactions using derivative financial instruments when: (a) we anticipate
that market selling prices of hogs may decline in the future; or (b) hog futures prices are
relatively high. To mitigate our risk exposure, we mostly entered into futures and options
products, which enable us to sell hog products at a fixed price to hedge against price dropping
of our hog products.
To effectively manage risks related to our hedging practices, we have established
“Derivatives Business Management Policy” and the “Commodity Futures Hedging Business
Management Policy”, providing clear guidelines for identifying, measuring and managing
price risks within a structured framework. Our finance department serves as the executing body
for foreign exchange derivatives trading, responsible for planning, fund allocation and daily
operations, with subsidiary general managers and financial managers assisting in execution and
providing recommendations. Our internal audit department oversees these activities to ensure
compliance and effectiveness. Our Board and shareholders’ meeting act as the decision-making
bodies, approving the annual derivatives trading plan. Our Board further authorizes our
derivative business decision-making group and our futures decision-making group to manage
execution, including signing related agreements and documents. These measures ensure that
our hedging activities are conducted transparently, efficiently, and in strict adherence to
regulatory and corporate governance standards.
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A W ARDS AND RECOGNITIONS
Awards and Recognitions Y ear Issuing Authority
W AFI Innovation Award /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182024 World Agriculture Technology Innovation
Conference
Environmental Protection Science
and Technology Progress Award
(Second Prize) (“Ҧ
ආӉᆤɚഃᆤ”) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
2024 Chinese Society for Environmental
Sciences (“ኪ՘ึ”)
2023 National Modern Facility
Agriculture Innovation Leading
Base (“2023ุ༵
௴อˏჯਿή”) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
2024 PRC Ministry of Agriculture and Rural
Affairs (“ ʕ਷ุ༵༵Ӏ௅”)
National Key Leading Enterprise
of Agricultural Industrialization
(“ᓃᎲ᎘Ά
ุ”) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
2023 PRC Ministry of Agriculture and Rural
Affairs (“ ʕ਷ุ༵༵Ӏ௅”), National
Development and Reform Commission
(NDRC) (“ึ(࢕
೯ҷ։)”), Ministry of Commerce,
People’s Bank of China (“ ʕ਷ɛ͏ვ
Б”), China Securities Regulatory
Commission (CSRC) (“ ʕ਷ᗇՎ္ຖ
ึ(ʕ਷ᗇ္ึ)”), All-China
Federation of Supply and Marketing
Cooperatives (“ ʕശΌ਷ԶቖΥЪᐼ
ٟ)”
2023 Sustainable Development
Model Enterprise (“2023̙
ՊᇍΆุ”) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
2023 China Economic Conference Organizing
Committee (“ ʕ਷຾᏶ɽึଡ଼։ึ”)
2023 Standardized Demonstration
Project for High-Quality
Agricultural Development
(Standardized Construction of
Hog Slaughtering)
Demonstration Unit (“2023 ϋ༵
ᅺ๟ʷͪᇍධͦ(͛
ண)ͪᇍఊЗ”) /H1118/H1118
2023 PRC Ministry of Agriculture and Rural
Affairs (“ ʕ਷ุ༵༵Ӏ௅”)
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Awards and Recognitions Y ear Issuing Authority
2023 Advanced Enterprise in
China’s Meat Industry (“2023 ϋ
Бุ΋ආΆุ”) /H1118/H1118/H1118
2023 China Meat Association (“ ʕ਷Ђᗳ՘
ึ”)
National Green Factory (“ॴ
ၠЍʈᅀ”) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
2023 PRC Ministry of Industry and
Information Technology (“ ʕ਷ʈุձ
ʷ௅”)
National Agriculture, Animal
Husbandry and Fishery Harvest
Award (“ဝุᔮϗᆤ”) /H1118
2022 PRC Ministry of Agriculture and Rural
Affairs (“ ʕ਷ุ༵༵Ӏ௅”)
National Harmonious Labor
Relations Demonstration
Enterprise (“ڷ
ͪᇍΆุ”) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
2022 PRC Ministry of Human Resources and
Social Security (“ღ
௅”), All-China Federation of Trade
Unions (“ ʕശΌ਷ᐼʈึ”), China
Enterprise Confederation (“ ʕ਷Άุᑌ
Υึ”), China Entrepreneurs
Association (“՘ึ”), All-
China Federation of Industry and
Commerce (“ ʕശΌ਷ʈਠุᑌΥึᑌ
Υ˴፬”)
IMPACT OF COVID-19
Our business and results of operations had not been materially and directly affected by the
COVID-19 pandemic during the Track Record Period. Since the COVID-19 pandemic,
consumer behavior and the catering industry have experienced certain changes. However, as
pork is commonly consumed in daily meals, the demand for such products are stable and
relatively resilient against economic fluctuations. As a result, our business operations had not
been materially and adversely affected during the Track Record Period. As the COVID-19
pandemic has since subsided, we do not anticipate further adverse impact on our business and
financial performance.
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OVERVIEW
Our Board of Directors consists of eight Directors, comprising three Executive Directors,
two Non-executive Directors, and three Independent Non-executive Directors. Our Directors
are elected for a term of three years and are subject to re-election.
Our senior management is responsible for the daily operations of our Company.
Directors and Senior Management
The following table sets forth certain information regarding our Directors:
Name Age 1 Position(s)
Date of
Joining our
Group
Date of
Appointment
as a Director Role and Responsibility
Executive Directors
Mr. QIN Yinglin
(΋͛) /H1118
61 Chairman of the
Board,
Executive
Director and
President
July 2000 December 2009 Responsible for overall
strategic planning,
business direction and
management of the
Group
Mr. CAO
Zhinian (ط
ϋ΋͛) /H1118/H1118/H1118/H1118/H1118
49 Vice Chairman
of the Board,
Executive
Director,
Executive
Vice
President and
Person in
charge of
Finance
July 2000 December 2009 Assisting in overseeing
the strategic direction,
business operation and
corporate governance
Ms. Y ANG
Ruihua ( เ๿
ശɾɻ) /H1118/H1118/H1118/H1118/H1118
49 Executive
Director
and Vice
President
July 2000 May 2024 Directing daily
operations, corporate
governance,
coordinating resources,
and reviewing
strategies and risks
DIRECTORS AND SENIOR MANAGEMENT
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Name Age 1 Position(s)
Date of
Joining our
Group
Date of
Appointment
as a Director Role and Responsibility
Non-executive Directors
Ms. QIAN Ying
(፺຃ɾɻ) /H1118/H1118/H1118
60 Non-executive
Director
July 2000 December 2009 Supervising corporate
governance and
reviewing strategies
and risks
Mr. SU Danglin
(΋͛) /H1118
57 Non-executive
Director
July 2000 December 2025 Supervising corporate
governance and
reviewing strategies
and risks
Independent non-executive Directors
Mr. CHOW
Ming Sang
(୍΋͛) /H1118
53 Independent
Non-
executive
Director
December
2023
December 2023 Supervising and
providing independent
opinion and judgment
to the Board
Mr. Y AN Lei
(ᎅᆾ΋͛) /H1118/H1118/H1118
53 Independent
Non-
executive
Director
July 2021 July 2021 Supervising and
providing independent
opinion and judgment
to the Board
Mr. FENG Genfu
(၅΋͛) /H1118
69 Independent
Non-
executive
Director
September
2021
September 2021 Supervising and
providing independent
opinion and judgment
to the Board
Note:
1 Ages are calculated based on the year of birth.
DIRECTORS AND SENIOR MANAGEMENT
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The following table sets out certain information regarding the senior management of our
Company.
Name Age 1 Position(s)
Date of
Joining our
Group
Date of
Appointment
as senior
management Role and Responsibility
Mr. QIN Yinglin
(΋͛) /H1118
61 Chairman of
the Board,
Executive
Director and
President
July 2000 December 2009 Responsible for overall
strategic planning,
business direction and
management of the
Group
Mr. CAO
Zhinian
(ϋ΋͛) /H1118
49 Vice Chairman
of the Board,
Executive
Director,
Executive
Vice
President
and Person
in charge of
Finance
July 2000 January 2010
(Executive Vice
President) and
July 2014
(Person in
charge of
Finance)
Assisting in overseeing
strategic direction,
business operation and
corporate governance
Ms. Y ANG
Ruihua
(เ๿ശɾɻ) /H1118
49 Executive
Director
and Vice
President
July 2000 March 2020 Directing daily
operations, corporate
governance,
coordinating resources,
and reviewing
strategies and risks
Mr. GAO Tong
(৷⭝΋͛) /H1118/H1118/H1118
32 Chief Financial
Officer
July 2017 January 2026 Responsible for business
operations, investment,
and financing
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--- page 289 ---
Name Age 1 Position(s)
Date of
Joining our
Group
Date of
Appointment
as senior
management Role and Responsibility
Ms. CHU Ke
(ɾɻ) /H1118/H1118/H1118
44 Vice President July 2007 March 2020 Supporting the president
in strategy and daily
operations and
coordinating resources
Ms. W ANG
Chunyan
(ᜮɾɻ) /H1118
34 Chief Human
Resources
Officer
(CHO)
July 2015 March 2020 Responsible for human
resources management
Mr. YUAN
Hebin
(঺ΥႷ΋͛) /H1118
38 Chief Legal
Officer
(CLO)
July 2010 March 2020 Responsible for legal
compliance and risk
control
Mr. QIN Jun
(΋͛) /H1118/H1118/H1118
52 Secretary to the
Board and
Chief
Strategy
Officer (CSO)
November
2012
July 2014
(Secretary to
the Board) and
March 2020
(CSO)
Responsible for overall
corporate governance,
information disclosure,
investor relation,
company strategy and
other Board-related
matters
Mr. W ANG
Zhiyuan ( ˮқ
Ⴣ΋͛) /H1118/H1118/H1118/H1118/H1118
38 General
Manager of
Development
and
Construction
July 2012 March 2020 Responsible for strategy
development,
operational
management and
performance
achievement
Mr. LI Y anpeng
(΋͛) /H1118
40 Chief Operating
Officer of
Hog
Production
July 2011 March 2020 Responsible for
developing hog
farming strategy,
coordinating and
ensuring company
profit goals
Mr. XU Shaotao
(ୗᏹ΋͛) /H1118
53 Muyuan Meat
General
Manager
April 2019 March 2020 Responsible for
developing strategy
and business plan for
meat product business
Ms. NIU Min
(ˬᦩɾɻ) /H1118/H1118/H1118
37 Chief V eterinary
Officer
July 2014 May 2025 Responsible for
overseeing veterinary
services, leading
veterinary research and
development
Note:
1. Ages are calculated based on the year of birth.
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Save that Mr. Qin Yinglin and Ms. Qian Ying are spouses, Mr. Cao Zhinian is a cousin
of Ms. Qian Ying, and Mr. Cao Zhinian and Ms. Y ang Ruihua are spouses, none of our
Directors and members of senior management is a relative to other Directors or members of
senior management.
Save as disclosed in this section, (i) none of our Directors held any directorships in public
companies, the securities of which are listed on any securities market in Hong Kong or
overseas in the last three years immediately preceding the date of this prospectus; (ii) to the
best knowledge, information and belief of the Directors having made all reasonable inquiries,
there were no other matters with respect to the appointment of the Directors that need to be
brought to the attention of the Shareholders and there was no information relating to our
Directors that is required to be disclosed pursuant to Rule 13.51(2) of the Listing Rules.
BOARD OF DIRECTORS
Executive Directors
Mr. QIN Yinglin (΋͛) has been our Director, Chairman of the Board and
President since December 2009. Mr. Qin began his entrepreneurial career in 1992 when he
entered the hog farming industry, and he established Neixiang County Mashan Hog Farm ( ʫ
ඊጤ৵ʆቮሥఙ) in 1995.
Mr. Qin has also been serving as a deputy to the 14th National People’s Congress since
February 2023, a vice president of All-China Federation of Industry and Commerce ( ʕശΌ਷
ʈਠุᑌΥึ, also known as All-China Chamber of Industry and Commerce ( ʕ਷͏ගਠึ))
since December 2022, the vice chairman of the board of trustees of Westlake University ( Гಳ
ɽኪ) since June 2020, a vice president of the China Animal Agriculture Association ( ʕ਷ळ
ุ՘ึ) since July 2024, the vice chairman of the first council of National Center of
Technology Innovation for Pigs (͛ሥҦஔ௴อʕː) since April 2022, and the chairperson
of Hangzhou Westlake Education Foundation since August 2025.
Mr. Qin has received numerous honors and awards for his contributions in poverty
alleviation, public welfare and technology advancement, such as being honored as a National
Advanced Individual in Poverty Alleviation and received the National Poverty Alleviation
Contribution Award by and from the State Council Leading Group of Poverty Alleviation and
Development ( ਷ਕ৫ҧமක೯ჯኬʃଡ଼) in August 2014 and October 2017, respectively;
being named one of Henan’s Top Ten Poverty Alleviation Role Models by the Henan
Federation of Trade Unions (ᐼʈึ) and Henan Poverty Alleviation Office (ҧ
܃in December 2018; being honored as an Outstanding Expert of Henan Province
by the CPC Henan Provincial Committee and Henan Provincial People’s Government in May
2017; and being awarded the Henan Science and Technology Progress Award from the Henan
Provincial People’s Government in February 2021.
DIRECTORS AND SENIOR MANAGEMENT
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Mr. Qin obtained his bachelor’s degree in animal husbandry from Henan Agricultural
University (ุ༵ɽኪ) in PRC in June 1989. He was qualified as a Senior Animal
Husbandry Engineer (ࢪىin March 2020 and as a Senior Economist (ࢪ)
in February 2024, by the Department of Human Resources and Social Security of Henan
Province.
Mr. CAO Zhinian (ϋ΋͛) has been our Director since December 2009 and the Vice
Chairman of the Board since August 2018.
Mr. Cao has been serving as the Person in charge of Finance of our Company since July
2014 and the Executive Vice President of our Company since January 2010. Mr. Cao has also
been serving as a director of Nanyang Wolong District Rural Credit Cooperative Union (ජ
ٟsince May 2016, a director of Henan Xixia Rural Commercial
Bank Co., Ltd. (ʮ̡) since August 2017, a director of Henan
Neixiang Rural Commercial Bank Co., Ltd. (ʮ̡) since
November 2017, and a director of Muyuan International Limited since October 2017. Mr. Cao
was also a director of Cnex Fire V ehicle Manufacturing Co., Ltd. (ʮ
̡) from December 2017 to June 2025.
Mr. Cao worked at Neixiang County Mashan Hog Farm ( ʫඊጤ৵ʆቮሥఙ) from 1998
to July 2000. From the establishment of our Company in July 2000 to December 2009, he
served various positions in the Company, including finance manager and person in charge of
finance.
Mr. Cao was honored as a Model Worker of Nanyang City awarded by the Nanyang
Municipal People’s Government in April 2011, and a Model Worker of Henan Province
awarded by the People’s Government of Henan Province in April 2014.
Mr. Cao obtained a junior college degree in financial accounting from Nanyang Institute
of Technology (ජଣʈኪ৫) in PRC in July 1999. He was qualified as a senior economist by
the Department of Human Resources and Social Security of Henan Province in March 2020.
Ms. YANG Ruihua (เ๿ശɾɻ) has been our Director of the Company since May 2024.
Ms. Y ang has served as the veterinary director of our Company since July 2000 and a Vice
President of our Company since March 2020.
Ms. Y ang served as a veterinarian at Neixiang County Mashan Hog Farm ( ʫඊጤ৵ʆቮ
ሥఙ) from March 1996 to July 2000. She served as a council member of the Hog Breeding
Branch of Henan Livestock Farming Association (ᖕᔼኪึቮሥኪʱึ) from May
2007 to May 2011.
DIRECTORS AND SENIOR MANAGEMENT
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Ms. Y ang has received numerous honors during her career, including being honored as an
Advanced Individual in Livestock Farming by the Nanyang Municipal People’s Government in
February 2009, awarded the Henan Provincial Science and Technology Progress Award by the
Henan Provincial Department of Science and Technology in April 2009 and the First Prize
Science and Technology Achievement Award by the Henan Provincial Department of Education
in July 2009, honored as Nanyang Model Worker by the Nanyang Municipal People’s
Government in April 2015 and Henan Provincial Model Worker by the Henan Provincial
People’s Government in April 2024.
Ms. Y ang obtained a secondary technical degree from Nanyang Agricultural School (ئ
ࣧin PRC in June 1997 in livestock farming (economic livestock). She was
qualified as a veterinarian by the Henan Provincial Association for the Promotion of Private
Science and Technology (ආึ) in July 2009.
Non-executive Directors
Ms. QIAN Ying (፺຃ɾɻ) has been our Director since December 2009.
Ms. Qian operated Neixiang County Mashan Hog Farm ( ʫඊጤ৵ʆቮሥఙ) with Mr. Qin
Yinglin since 1995. She has been serving as the executive director and general manager of
Muyuan Group since June 2008, the executive director and general manager of Jinding Capital
Management (Shenzhen) Co., Ltd. ( ᎀཻ༟͉၍ଣ(ଉέ)ʮ̡) since August 2015, and
Shanghai Zhending Enterprise Management Consulting Co., Ltd. (ࠢ
ʮ̡) since August 2016. Ms. Qian has also been serving as an honorary director of Westlake
University since June 2020.
Ms. Qian obtained her junior college degree in traditional Chinese V eterinary Medicine
from Zhengzhou Livestock Farming and V eterinary College (ࣧi nP R C
in July 1988. She was qualified as a senior economist by the Department of Human Resources
and Social Security of Henan Province in December 2024.
Mr. SU Danglin (΋͛) has been our Director since December 2025 when he was
elected as the employee representative Director by employee representatives. Mr. Su has also
been in charge of the environmental protection operation of our Company since April 2022.
Previously, he worked in Neixiang County Mashan Hog Farm ( ʫඊጤ৵ʆቮሥఙ) from July
1995 to July 2000 and subsequently served various positions in our Company from its
establishment in July 2000 to April 2022, including head of environmental protection logistics
and deputy general manager. From March 2020 to December 2025, Mr. Su served as the
chairman of the board of supervisors of our Company.
DIRECTORS AND SENIOR MANAGEMENT
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--- page 293 ---
Independent Non-executive Directors
Mr. CHOW Ming Sang (୍΋͛) has been our independent director since December
2023.
Mr. Chow currently serves as an independent non-executive director for several
companies listed on the Hong Kong Stock Exchange, including China Modern Dairy Holdings
Ltd. (1117.HK) since July 2021, Redco Healthy Living Co Ltd (2370.HK) since March 2022,
China Maple Leaf Educational Systems Limited (1317.HK) since March 2024, and XtalPi
Holdings Limited (2228.HK) since May 2024. Mr. Chow served as a director of UISEE
Technologies (Beijing) Co., Ltd. (Ҧ(̏ԯ)ʮ̡) from October 2024 to May
2025 and has been an independent non-executive director since May 2025. He has also been
the managing director of Beijing Xinshi Anye Management Consulting Co., Ltd. (ྼτ
ʮ̡) since July 2019.
From January 2007 to September 2018, Mr. Chow worked at Ernst & Y oung (China)
Advisory Limited, with his last position being a partner. He also served as the general manager
of the risk control department at Tahoe Group Co., Ltd. (ʮ̡) from
September 2018 to June 2019 and an independent non-executive director of Teamway
International Group Holdings Limited (1239.HK) from June 2019 to August 2025.
Mr. Chow obtained a bachelor’s degree in accounting from the Hong Kong University of
Science and Technology in 1995. He is a fellow member of Hong Kong Institute of Certified
Public Accountant (HKICPA) and the Association of Chartered Certified Accountants (ACCA),
and a Certified Internal Auditor (CIA). Mr. Chow also obtained the certificate of equity fund
practising qualification from Asset Management Association of China.
Mr. YAN Lei (ᎅᆾ΋͛) has been our independent director since July 2021.
Mr. Y an has been an independent director of Dongguan Y utong Optical Technology Co.,
Ltd. (ʮ̡, 300790.SZ) since July 2021, and Genbyte
Technology Inc. (ʮ̡, 003028.SZ) since January 2023. He has
also been the chairman of Shenzhen Zhengqing Data Technology Co., Ltd. (Ҧ
ʮ̡) since January 2024, and a director and manager of Shenzhen Changfa Consulting
Co., Ltd. (ʮ̡) since August 2024.
Mr. Y an conducted postdoctoral research at the Institute of Applied Law, Chinese
Academy of Social Sciences (הfrom May 2011 to August
2014. He has been a review expert for investment and financing at the Shenzhen Baoan District
Industrial Investment Guidance Fund (ږfrom June 2018 to
June 2020. He worked at Chongqing Suyuan (Shenzhen) Law Firm (ᅅ๑๕(ଉέ)ԫਕ
הfrom February 2019 to September 2024. He served as the executive director of Shenzhen
Brothers Football Investment Development Holdings Co., Ltd. (Ϟ
ʮ̡) from December 2015 to September 2025, and independent directors of Shenzhen Click
DIRECTORS AND SENIOR MANAGEMENT
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--- page 294 ---
Technology Co., Ltd. (ʮ̡, 002782.SZ) from November 2019 to
May 2024 and Eastern Pioneer Driving School Co., Ltd. (ʮ̡,
603377.SH) from July 2021 to April 2024.
Mr. Y an obtained a bachelor’s degree in literature from Wuhan University (ဏɽኪ)i n
PRC in July 1994, a master’s degree in law from Wuhan University in June 2006, and a
doctoral degree in law from Wuhan University in June 2009. He holds a legal professional
qualification from the Ministry of Justice since February 2008, a board secretary qualification
from the Shenzhen Stock Exchange since July 2013. He also obtained an independent director
qualification from the Shenzhen Stock Exchange. He was appointed as a full-time lawyer by
the Guangdong Provincial Department of Justice in October 2024 and as an arbitrator at the
Shenzhen International Arbitration Court in February 2025.
Mr. FENG Genfu (၅΋͛) has been our independent director since September 2021.
Mr. Feng has been a professor and doctoral supervisor at the School of Economics and
Finance at Xi’an Jiaotong University ( Гτʹஷɽኪ) since February 2016. He also serves as
an external director of Xi’an Huaheng State owned Capital Operation Group Co., Ltd. ( Гτ
ʮ̡) since August 2018 and independent directors of Phylion
Battery Co., Ltd. (ʮ̡) since September 2019, Kunpeng Asset Management
Co., Ltd. (ʮ̡) since June 2020, and Shaanxi Qinyuan Thermal Power
Co., Ltd. (ʮ̡) since December 2025. He also held positions such as
a vice president of the China Society of Quantitative Economics ( ʕ਷ᅰඎ຾᏶ኪึ) from
October 2021 to October 2024.
Mr. Feng has previously served as independent directors of Shaanxi Fenghuo Electronics
Co., Ltd. (ʮ̡, 000561.SZ) from March 2010 to June 2015, CSC
Financial Co., Ltd. (6066.HK and 601066.SH) from April 2015 to May 2021, Bode Energy
Equipment Co., Ltd (ʮ̡, 300023.SZ) from August 2015 to
December 2018, Datang International Power Generation Company Limited (΅
ʮ̡, 601991.SH) from September 2015 to September 2020, Tianmao Industrial Group
Co., Ltd. (ʮ̡, 000627.SZ) from May 2016 to August 2018, Changchai
Co., Ltd. (ʮ̡, 000570.SZ) from October 2016 to May 2020, Huaren
Pharmaceutical Co., Ltd. (ʮ̡, 300110.SZ) from August 2019 to September
2025, Xi’an Shaangu Power Co., Ltd. (ʮ̡, 601369.SH) from
December 2019 to July 2024, Zhongyuan Trust Co., Ltd. (ʮ̡) from September
2020 to November 2025, and Bank of Xi’an Co., Ltd. (ʮ̡, 600928.SH)
from August 2024 to April 2025. He has also served as an independent director at Shenzhen
Golden Lighting Technology Co., Ltd. (ʮ̡) from September
2018 to May 2024. He also served as an editor and teacher at Shaanxi Institute of Finance &
Economics ( ৯Гৌ຾ኪ৫) from July 1982 to April 2000.
DIRECTORS AND SENIOR MANAGEMENT
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--- page 295 ---
Mr. Feng was awarded the Second Prize for the 13th Awards of Outstanding
Achievements in Philosophy and Social Sciences by the Shaanxi Provincial Government in
May 2018, and the First Prize for the 14th Outstanding Achievements in Philosophy and Social
Sciences by the Shaanxi Provincial Government in November 2019.
Mr. Feng obtained a doctoral degree in economics from Shaanxi Institute of Finance &
Economics ( ৯Гৌ຾ኪ৫) in PRC in July 1997.
SENIOR MANAGEMENT
For biographical details of Mr. QIN Yinglin (΋͛), see “— Board of Directors —
Executive Directors.”
For biographical details of Mr. CAO Zhinian (ϋ΋͛), see “— Board of Directors —
Executive Directors.”
For biographical details of Ms. Y ANG Ruihua ( เ๿ശɾɻ), see “— Board of Directors
— Executive Directors.”
Mr. GAO Tong ( ৷⭝΋͛) has been the chief financial officer (CFO) of our Company
since January 2026.
Mr. Gao obtained an executive master’s degree in international business from ESCP
Business School in France.
Mr. Gao joined our Company in July 2017, since when he served as the head of regional
finance management and the manager of the finance department. Since March 2023, he has
been serving as a council member of Nanyang Xihu Muyuan Institute of Synthetic Biology (ی
Ӻ৫).
Ms. CHU Ke (ɾɻ) has been a Vice President of our Company since March 2020.
Ms. Chu joined our Company in July 2007. She served as the nutrition director from July
2007 to February 2020 and the chairman of the board of supervisors of our Company from
December 2009 to March 2020.
Ms. Chu obtained a master’s degree in animal nutrition and feed science from Y unnan
Agricultural University (ุ༵ɽኪ) in PRC in June 2007. She holds the qualification of
senior economist issued by the Department of Human Resources and Social Security of Henan
Province in March 2020.
Ms. W ANG Chunyan (ᜮɾɻ) has been the Chief Human Resources Officer (CHO)
of our Company appointed since March 2020.
DIRECTORS AND SENIOR MANAGEMENT
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Ms. Wang joined our Company in 2015 and was in charge of employee performance
evaluation from July 2015 to March 2018, and served as the human resource director from
March 2018 to March 2020. She has also been serving as the deputy director of the Nanyang
Westlake Muyuan Synthetic Biology Research Institute (Ӻ৫)
since March 2023.
Ms. Wang obtained a bachelor’s degree in labor and social security from Wuhan
University (ဏɽኪ) in PRC in June 2014.
Mr. YUAN Hebin (঺ΥႷ΋͛) has been the Chief Legal Officer (CLO) of our Company
since March 2020.
Mr. Y uan has been serving as the president of Nanyang Consumer Assistance Association
(ජ̹ऊ൬Ꮝҧ՘ึ) since March 2023, and as directors of Cnex Fire V ehicle Manufacturing
Co., Ltd. (ʮ̡) since December 2017, Neixiang County Shengduo
Watershed Water Ecological Environment Treatment Co., Ltd. (ط
ʮ̡) since October 2018, and Shanghai Lingyue Investment Management Co., Ltd. ( ɪ
ʮ̡) since February 2021.
Mr. Y uan joined our Company in 2010. He served as the manager of legal department of
our Company from July 2010 to March 2020. He also served as supervisors of various
subsidiaries of our Company, including Nanyang Muhua Animal Husbandry Industry
Development Co., Ltd. (ʮ̡) from November 2019 to April
2025, Huaxian Muhua Animal Husbandry Industry Development Co., Ltd. (ପุ
ʮ̡) and Ningling Muhua Animal Husbandry Industry Development Co., Ltd. ( ྐྵ௒
ʮ̡) from December 2019 to January 2025, Huaibei Muhua Animal
Husbandry Industry Development Co., Ltd. (ʮ̡) from
December 2019 to March 2025, Hubei Zhongxiang Muyuan Breeding Co., Ltd. (ࡡى
ʮ̡) from September 2012 to April 2025, Fugou Muhua Animal Husbandry Industry
Development Co., Ltd. (ʮ̡) from December 2019 to May 2025,
Nanyang Muyuan Swine Supply Support Co., Ltd. (ʮ̡) from
January 2020 to June 2024, Nanyang Muyuan Maiming Industry Development Co., Ltd. (ජ
ʮ̡) from January 2020 to March 2025, and Shandong Muhua
Animal Husbandry Industry Development Co., Ltd. (ʮ̡)
from November 2019 to June 2025.
Mr. Y uan obtained a bachelor’s degree in law from Sichuan Agricultural University ( ̬
ʇุ༵ɽኪ) in PRC in June 2010. He holds a legal professional qualification issued by the
Ministry of Justice in August 2010.
Mr. QIN Jun (΋͛) has been the Secretary to the Board since July 2014 and Chief
Strategy Officer (CSO) of our Company since March 2020.
Mr. Qin has also been serving as a director of Shanghai Lingyue Investment Management
Co., Ltd. (ʮ̡) since February 2021.
DIRECTORS AND SENIOR MANAGEMENT
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--- page 297 ---
Mr. Qin joined our Company in 2012 and served as assistant to the general manager from
November 2012 to July 2014. Previously he worked as an industry analyst at Guotai Junan
Securities Co., Ltd. (now known as Guotai Haitong Securities Co., Ltd., 2611.HK and
601211.SH) from July 2001 to November 2012.
Mr. Qin was honored as an outstanding board secretary by the Securities Times (ࣛ
జ) in August 2020 and received 4A rating in the 2023 and 2024 board secretary performance
evaluation by the China Association for Public Companies ( ʕ਷ɪ̹ʮ̡՘ึ) in December
2023 and 2024, respectively.
Mr. Qin obtained a bachelor’s degree in industrial foreign trade from Xi’an Jiaotong
University ( Гτʹஷɽኪ) in PRC in July 1997, and a master’s degree in economics from
Peking University ( ̏ԯɽኪ) in PRC in July 2001. He holds the qualifications of senior
economist issued by the Henan Provincial Department of Human Resources and Social
Security in March 2020, and a board secretary qualification issued by the Shenzhen Stock
Exchange in March 2014.
Mr. W ANG Zhiyuan (ˮқჃ΋͛) has been General Manager of Development and
Construction of our Company since March 2020.
Mr. Wang has also been serving as the executive director of Nanyang Wolong Muyuan
Breeding Co., Ltd. (ʮ̡) since May 2018.
Mr. Wang joined our Company in 2012 and worked at public relationship position, and
served as the person in charge of quality supervision from July 2012 to March 2020. He also
served as positions of various subsidiaries of our Company including the executive director and
general manager of Nanyang Muyuan Merchants Industry Development Co., Ltd. (ࡡى
ʮ̡) from December 2018 to April 2022, the executive director and general
manager of Nanyang Muyuan Poor Area Livestock Husbandry Development Co., Ltd. (ජ̹
ʮ̡) from September 2018 to December 2024, a director of
Shandong Muhua Animal Husbandry Industry Development Co., Ltd. (ุପุ
ʮ̡) from November 2019 to May 2023, a director of Nanyang Muhua Animal
Husbandry Industry Development Co., Ltd. (ʮ̡) from
November 2019 to April 2025, the executive director and general manager of Fugou Muhua
Animal Husbandry Industry Development Co., Ltd. (ʮ̡) from
December 2019 to May 2025, the chairman of the board of directors of Huaxian Muhua Animal
Husbandry Industry Development Co., Ltd. (ʮ̡) from December
2019 to January 2025, the chairman of the board of directors and general manager of Ningling
Muhua Animal Husbandry Industry Development Co., Ltd. (ʮ̡)
from December 2019 to January 2025, and a director of Huaibei Muhua Animal Husbandry
Industry Development Co., Ltd. (ʮ̡) from December 2019
to March 2025.
Mr. Wang obtained a bachelor’s degree in civil engineering from Nanyang Institute of
Technology (ජଣʈኪ৫) in PRC in 2012.
DIRECTORS AND SENIOR MANAGEMENT
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--- page 298 ---
Mr. LI Y anpeng (΋͛) has been the chief operating officer (COO) of hog
production of our Company since March 2020.
Mr. Li has also been serving as the executive director and general manager of Henan
Muyuan Hog Breeding Pig Co., Ltd. (ʮ̡) since January 2021.
Mr. Li joined our Company in 2011 and served as subsequently as farm manager and R&D
director from July 2011 to June 2015, the breeding director from June 2015 to August 2019,
the person in charge of production from August 2019 to March 2020. Previously, Mr. Li also
served as a senior talent development instructor at the College of Animal Science and
V eterinary Medicine at Huazhong Agricultural University ( ശʕุ༵ɽኪ) from January 2021
to July 2023, and as a member of the pig industry standardization working group of the
National Animal Husbandry Standardization Technical Committee (ุᅺ๟ʷҦஔ։
ึ) from April 2021 to April 2026.
Mr. Li was awarded the Henan Science and Technology Progress Award by the Henan
Provincial People’s Government in February 2021, and received the title of Henan Provincial
Technical Specialist by the Henan Provincial Department of Human Resources and Social
Security in May 2023. He was honored as a national rural revitalization youth pioneer by the
Communist Y outh League of China and the Ministry of Agriculture and Rural Affairs in
November 2023.
Mr. Li obtained a bachelor’s degree in animal science from Huazhong Agricultural
University ( ശʕุ༵ɽኪ) in PRC in June 2011.
Mr. XU Shaotao (ୗᏹ΋͛) has been the Muyuan Meat General Manager of our
Company since March 2020.
Mr. Xu has also being serving as the general manager of Muyuan Meat Co., Ltd. (ࡡى
ʮ̡) since March 2023 and a director of Henan Qianmu Biopharmaceutical Co.,
Ltd. (ʮ̡) since June 2023.
Mr. Xu joined our Group in 2019. Previously, he worked at a subsidiary of Shandong
Longda Meishi Co., Ltd. (ʮ̡, 002726.SZ) from January 2011 to April
2019.
Mr. Xu obtained an associate degree in financial accounting from Shandong Technology
and Business University (ʈਠኪ৫) in PRC in January 2007 via correspondence study.
Ms. NIU Min (ˬᦩɾɻ) has been the Chief V eterinary Officer (CVO) of our Company
since May 2025.
DIRECTORS AND SENIOR MANAGEMENT
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--- page 299 ---
Ms. Niu joined our Group in 2014 and served in various roles including veterinary R&D
specialist, regional laboratory director, and head of veterinary diagnostics from July 2014 to
March 2021. She served as the head of veterinary services of our Company from March 2021
to May 2025. From January 2021 to July 2023, Ms. Niu was a senior talent development
instructor at the College of Animal Science and V eterinary Medicine at Huazhong Agricultural
University ( ശʕุ༵ɽኪ). She also served as an industry mentor for professional degree
postgraduates at the College of Animal Science and Technology and College of V eterinary
Medicine at Huazhong Agricultural University ( ശʕุ༵ɽኪ) from December 2021 to
December 2025. Ms. Niu was a member of the development committee of the Modern Swine
V eterinary Research Institute at Zhejiang A&F University (ɽኪ) from March 2022 to
March 2025. She became a council member (representative) of the third council of the China
V eterinary Association ( ʕ਷ᖕᔼ՘ึ) in June 2023 and the deputy director of the second
expert working committee of the China V eterinary Association in July 2023.
Ms. Niu has received various accolades, including being named one of Nanyang’s Top
Ten Female Scientists (ජ̹“٫by the Nanyang Women’s Federation (ی
ජ̹੉ɾᑌΥึ) in March 2023, and awarded the March 8th Red-Banner Holder (ජ̹“ɧ
ɞ”࿩˓) by the Nanyang Women’s Federation in March 2023. She received the First Prize
for Agricultural Technology Promotion Achievements (ᆤɓഃᆤ) from the
MARA in December 2022, and was recognized as the Annual Figure in China’s Hog Industry
(يby the China Hog Industry Magazine (ٟi n
December 2022.
Ms. Niu obtained her master’s degree in veterinary medicine from Huazhong Agricultural
University ( ശʕุ༵ɽኪ) in PRC in June 2014. She holds a V eterinary Practitioner
Qualification (ᗇ) issued by the Bureau of Animal Husbandry of Henan
Province (҅) in March 2017.
OTHER DISCLOSURE
According to a regulatory letter (a self-regulatory measure under the rules of the
Shenzhen Stock Exchange) dated April 8, 2022 from the Shenzhen Stock Exchange, Mr. Qin
Yinglin’s subscription and registration of 37,855,694 Convertible Bonds at RMB100 each on
August 25, 2021, and subsequent sale of 5,794,424 Convertible Bonds at RMB115 each on
February 17, 2022, constituted short-swing trading. Pursuant to the Notice on the Application
of Short-Swing Trading Rules to Convertible Corporate Bonds (̙ᔷ౬ʮ̡වՎቇ͜೵
) issued by the Shenzhen Stock Exchange on February 25, 2021, any
purchase or sale of convertible bonds by directors, supervisors, senior management, or
shareholders holding 5% or more of a listed company’s shares must comply with the
short-swing trading provisions under the Securities Law of the People’s Republic of China
(, the “ Securities Law ”). Article 44 of the Securities Law provides
that if any such individual sells the Company’s shares or other equity securities within six
months of purchase, or repurchases within six months of sale, the gains therefrom shall belong
to the company, and the board of directors shall collect such gains. Mr. Qin subscribed for
37,855,694 Convertible Bonds on the date, August 16, 2021, when the Convertible Bonds were
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issued but the registration as owner of the holder of the relevant Convertible Bonds was on
August 25, 2021. Mr. Qin Yinglin’s sale of the relevant Convertible Bonds resulted from a
different interpretation of the timing requirement under the relevant rules. Mr. Qin had no
intent to profit improperly through short-swing trading. He has apologized, returned all gains
to the Company and studied the applicable regulations to prevent recurrence of similar
situations. No further administrative action, fines, penalty, or remedial measures were imposed
on Mr. Qin or the Company by the Shenzhen Stock Exchange, CSRC, or any other regulatory
authority in connection with this matter.
According to a decision dated May 7, 2021 from CSRC, Mr. Qin Yinglin was subject to
a regulatory talk, an administrative measure under CSRC rules. The decision related to the
Company’s submission of Convertible Bonds issuance materials, including a letter signed by
Mr. Qin Yinglin as our legal representative and Chairman, which stated there were no material
issues affecting the offering and listing of the Convertible Bonds or the decision-making of
investors. This submission occurred while the Shenzhen Stock Exchange was querying the
Company regarding media concerns over its financial indicators and related-party transactions.
Under Article 48 of the then-effective Administrative Measures on Issuance of Securities by
Listed Companies (2020 V ersion) (the “ Administrative
Measures on Issuance of Securities ”), if a listed company encounters a significant event prior
to a securities issuance, it must promptly report the matter to the CSRC and defer the issuance.
If the event materially affects the suitability of the issuance, the company must submit a new
application to the CSRC. CSRC determined that Mr. Qin Yinglin’s signing of the submission
violated Article 48 of the Administrative Measures on Issuance of Securities. Mr. Qin Yinglin
attended the regulatory talk as required, and the Company has also strengthened training for
Directors, and senior management to improve their compliance and awareness of relevant laws
and regulations. No further administrative action, fines, penalty, or remedial measures were
imposed on Mr. Qin or the Company by the Shenzhen Stock Exchange, CSRC, or any other
regulatory authority in connection with this matter.
According to a regulatory letter dated January 20, 2017 from the Shenzhen Stock
Exchange, Mr. Cao Zhinian’s acquisition of 148,000 A Shares at the price of RMB23.504 each
and sale of 6,200 A Shares at the price of RMB23.510 each on January 11, 2017, constituted
short-swing trading under the Securities Law. Mr. Cao has notified the accident promptly to the
Company and the Company has made an announcement on the Shenzhen Stock Exchange on
January 13, 2017 accordingly, explaining the circumstances of the incident. The Company’s
investigation found Mr. Cao Zhinian’s sale resulted from an operational error during
consecutive purchases, with no intent to profit improperly through short-swing trading. Mr.
Cao Zhinian acknowledged the impact of the error on the Company and the market. He
apologized, returned all the gains to the Company, and studied the relevant regulations to
prevent similar recurrences. No further administrative action, fines, penalty, or remedial
measures were imposed on Mr. Cao or the Company by the Shenzhen Stock Exchange, CSRC,
or any other regulatory authority in connection with this matter.
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Our Company considers that the above incidents did not adversely affect the suitability
of Mr. Qin Yinglin and Mr. Cao Zhinian to act as our Executive Directors and senior
management and in turn adversely affect our suitability for listing, on the following basis:
i. as of the Latest Practicable Date and to our best knowledge, (i) all such incidents
have been concluded, (ii) there has not been any further regulatory request to, action
against or correspondence with our Company or the relevant Directors from or by
the Shenzhen Stock Exchange and/or the CSRC, and (iii) other than disclosed above,
Mr. Qin Yinglin and Mr. Cao Zhinian have not been imposed on any other penalties
or involved in any other investigation, hearing or proceeding brought or instituted
by any securities regulatory authority or stock exchange, relating to the
aforementioned incidents;
ii. all non-compliant conducts involved in such incidents were unintentional and
primarily due to inadvertent oversight or different interpretation of the relevant
requirements or operational error, and did not involve findings of fraud and
dishonesty on the part of each of Mr. Qin Yinglin or Mr. Cao Zhinian or raise
concern on their respective integrity since the selling of relevant Convertible Bonds
of Mr. Qin was due to different interpretation of the starting point of the short-swing
trading period and the selling of the A Shares of Mr. Cao was an accidental
operational error; and once being aware of the non-compliant incidents, the relevant
individuals has taken rectification measures as appropriate, including attending
training sessions, and remit all profits made during such incidents to our Company;
iii. as advised by our PRC Legal Adviser, none of the regulatory talk required by the
CSRC or the regulatory letters issued by the Shenzhen Stock Exchange constitutes
a major or severe administrative regulatory measure or self-regulatory measure, nor
do they constitute administrative penalties or public censure under the PRC
securities regulatory laws, regulations or rules. Given that the CSRC or the
Shenzhen Stock Exchange has already taken administrative regulatory measures or
self-regulatory measures regarding the aforementioned non-compliant incidents, and
the concerned individuals have taken appropriate rectification measures, the
possibility that the securities regulatory authority or the stock exchange takes
further measure or action against the relevant persons in respect of the
aforementioned non-compliant incidents is remote;
iv. As advised by our PRC Legal Adviser, (i) according to Article 170 of the Securities
Law, a regulatory talk is one of the administrative measures that CSRC may impose
on companies. According to Article 64 of Administrative Measures on Issuance of
Securities by Listed Companies (2020 V ersion)” (,
if a listed company violates relevant rules, CSRC may impose administrative
measures including ordering corrections on the listed company, requesting
regulatory talks with responsible person, or deeming individuals unsuitable for
certain roles, and having their actions recorded and publicly disclosed in the
integrity archive. These administrative measures are lighter sanctions as compared
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to administrative penalties which are strictly regulated by the Administrative
Penalty Law of the People’s Republic of China ();
and (ii) according to Article 115 of the Securities Law, stock exchanges may impose
disciplinary action or other self-regulatory measures when there is violation of the
relevant rules of stock exchanges. According to The Implementation Measures for
Self-Regulatory Supervision and Disciplinary Actions of the Shenzhen Stock
Exchange (), a regulatory
letter issued by the Shenzhen Stock Exchange is one of the self-regulatory measures;
v. as advised by our PRC Legal Adviser, each of Mr. Qin Yinglin and Mr. Cao Zhinian
serving as a director and/or senior management member of a PRC company
(including listed companies) or as a Director and/or senior management member of
the Company is compliant with the relevant PRC Company Law, the PRC Securities
Law and other PRC laws and regulations. As advised by our PRC Legal Adviser, the
regulatory letter dated April 8, 2022 was issued only to Mr. Qin Yinglin, the
regulatory letter dated January 20, 2017 was issued only to Mr. Cao Zhinian, and the
regulatory talk decision dated May 7, 2021 was issued only to Mr. Qin Yinglin. None
of them affects the Company’s compliance record with the CSRC and the Shenzhen
Stock Exchange;
vi. we have also implemented internal control measures to ensure full compliance with
applicable laws and regulations in the future, including but not limited to appointing
the compliance adviser and enhancing our internal policies on dealing in securities
of the Company by our Directors and senior management. Specifically, to avoid
recurrence of short-swing trading of our Directors and senior management, our
Company’s securities department studied recent cases of short-swing trading and,
based on communication with the Shenzhen Stock Exchange, reviewed and gained
a deeper understanding on the rules regarding the calculation method for the
short-swing trading period. Subsequently in March 2022, the Company’s securities
department organized a training for Directors and senior management who held
securities of the Company. The training focused on recent short-swing trading cases
and the interpretation of short-swing rules and regulations (including the calculation
method for the six-month period). The Company also regularly reminds Directors
and senior management at the start of each trading restriction period to ensure they
remain fully aware of applicable trading restrictions. Additionally, in April 2022, the
Company further enhanced its internal control mechanism on over-viewing and
supervising securities trading of the Directors and senior management by adopting
a stringent policy, “Management Rules for Changes in Shareholdings of Directors
and Senior Management Personnel” and despatched the policy to all Directors and
senior management. The Company also periodically reminds the Directors and
senior management of the procedures they need to take before trading the securities
of the Company so as to keep Directors and senior management constantly aware of
the procedures they need to comply with before trading the Company’s securities.
Such policy requires our Directors and senior management to report to the Company
the securities account held by them so that the Company could also timely monitor
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the trading in the Company’s securities. According to this policy, before buying or
selling the Company’s shares, Directors, senior management, and securities affairs
representatives must submit a written trading plan to the Board Secretary. The Board
Secretary will be responsible for reviewing the Company’s disclosure status and any
material developments, verifying compliance with disclosure requirements and
monitoring for any potential violations of laws, regulations, or company rules. If the
proposed trade may violate laws, rules of the Shenzhen Stock Exchange, or the
Company’s Articles of Association, the Board Secretary will notify the relevant
individuals in writing and highlight the potential risks. All relevant personal account
information of Directors and senior management, including that of their close
associates, must be reported and kept up to date, with securities accounts and
shareholdings subject to regular review and locking mechanisms to prevent
unauthorised trading. After a Director or senior management submits their personal
information through the Company, the Shenzhen Stock Exchange will forward the
reported data to the Shenzhen Branch of the China Securities Depository and
Clearing Corporation. The Company’s shares registered under the relevant
individual’s name in their securities account will then be locked and could only be
traded out of lock-up periods. In addition, we also regularly remind our Directors,
senior management and relevant personnel of the Company of the procedures they
need to take before trading the securities of the Company so as to keep them
constantly aware of the procedures they need to comply with before trading the
Company’s securities. To avoid future occurrence of similar incident to the
regulatory talk decision, the Company has also taken effective measures to enhance
its internal control management by refining the reporting system for significant
matters, thoroughly reviewing and rectifying internal control policies, approval
systems, and execution processes, and updating relevant regulations to ensure strict
enforcement and robust implementation. At the same time, ongoing training was
provided to all Directors, senior management, and related personnel to deepen their
understanding of key laws and regulations, such as the Administrative Measures for
the Issuance of Securities by Listed Companies ()
promulgated by the CSRC and related regulations. Through regular training
sessions, the Company strengthened compliance awareness and standard operating
procedures, thereby improving corporate governance and internal control
capabilities, and effectively preventing the recurrence of similar incident; and
vii. In anticipation of the Listing, we have also reviewed the effectiveness of and refined
our internal controls associated with our business processes, including controls on
directors’ and senior management’s dealings in the Company’s securities and
disclosure of information. We have adopted the Model Code for Securities
Transactions by Directors of Listed Issuers as set out in Appendix C3 to the Listing
Rules as part of its securities trading rules and procedures.
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For our Directors’ interest in our Shares within the meaning of Part XV of the SFO, see
“Appendix VI. Statutory and General Information — 3. Further Information about Our
Directors and Substantial Shareholders — C. Disclosure of Interests — (b) Disclosure of
Interests of Directors and Chief Executive” in Appendix VI to this prospectus.
Each of our Directors confirms that he or she (i) has obtained the legal advice referred
to under Rule 3.09D of the Listing Rules in May 2025, and (ii) understands his or her
obligations as a director of a listed issuer under the Listing Rules.
Each of the independent non-executive Directors has confirmed (i) his independence as
regards each of the factors referred to in Rules 3.13(1) to (8) of the Listing Rules, (ii) he has
no past or present financial or other interest in the business of the Company or its subsidiaries
or any connection with any core connected person of the Company under the Listing Rules as
of the Latest Practicable Date, and (iii) that there are no other factors that may affect his
independence at the time of his appointments.
JOINT COMPANY SECRETARIES
Mr. QIN Jun (΋͛), is the Secretary to the Board, Chief Strategy Officer (CSO) and
our joint company secretary. For biographical details of Mr. Qin Jun (ࠏsee “— Senior
Management.”
Ms. LEUNG Wing Han Sharon (૑㣤ᄫɾɻ), has over 15 years of experience in
company secretarial work, with expertise in listing rules, company ordinances, and offshore
company compliance. She is a director of the company secretarial services division at Tricor
Services Limited, providing company secretarial and compliance services to a range of clients,
including multinational corporations. Ms. Leung is a Chartered Secretary, Chartered
Governance Professional, and a fellow member of both the Hong Kong Chartered Governance
Institute and The Chartered Governance Institute in the United Kingdom. She is also a member
of the Hong Kong Institute of Certified Public Accountants.
COMPLIANCE WITH THE CORPORATE GOVERNANCE CODE
We aim to implement a high standard of corporate governance, which we believe is
crucial to safeguard the interests of our Shareholders. To accomplish this, we expect to comply
with the Corporate Governance Code set out in Appendix C1 of the Listing Rules after the
Listing, save that Mr. Qin Yinglin will serve as both our Chairman of the Board and President
as discussed below.
Pursuant to code provision C.2.1 of the Corporate Governance Code, companies listed on
the Stock Exchange are expected to comply with, but may choose to deviate from the
requirement that the responsibilities between the chairman of the board and the chief executive
officer should be segregated and should not be performed by the same individual. We do not
have a separate Chairman of the Board and President and Mr. Qin Yinglin currently performs
these two roles. The Board believes that vesting the roles of both Chairman of the Board and
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President in the same person has the benefit of ensuring consistent leadership within our Group
and enables more effective and efficient overall strategic planning for our Group. The Board
considers that the balance of power and authority for the present arrangement will not be
impaired, and this structure will enable our Company to make and implement decisions
promptly and effectively.
COMPETING INTERESTS
As of the Latest Practicable Date, none of our Directors (other than Independent
Non-executive Directors) had interests in any business, which competes or is likely to compete,
either directly or indirectly with our business.
COMMITTEES UNDER OUR BOARD OF DIRECTORS
In accordance with relevant PRC laws, regulations, our Articles of Association and the
corporate governance practice in the Listing Rules, we have formed five board committees,
namely the Audit Committee, the Remuneration and Appraisal Committee, the Nomination
Committee, the Strategy Committee and the Sustainable Development Committee.
Audit Committee
The Audit Committee of our Company consists of three Directors, namely, Ms. Qian Ying,
Mr. Y an Lei, and Mr. Chow Ming Sang. Mr. Chow Ming Sang serves as the chairman of the
committee. The primary duties of the Audit Committee of our Company include (but are not
limited to):
 Supervising and evaluating the work of external auditors;
 Acting as the primary liaison between our Company and external auditors,
overseeing and coordinating internal and external audits, and reviewing the
arrangements set by our Company for employees to raise concerns about potential
misconduct in financial reporting, internal control, or other matters. The Audit
Committee should ensure there are appropriate arrangements for independent and
fair investigation of such matters and for taking appropriate follow-up actions;
 Reviewing the Company’s financial information and its disclosure, including its
completeness, and examining significant opinions on financial reporting contained
in statements and reports;
 Overseeing and evaluating the Company’s financial reporting system, risk
management, and internal control systems; and
 Handling other matters required by laws, regulations, the securities regulatory rules
of the jurisdictions where our Shares are listed, our Articles of Association, or as
authorized by our Board.
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Remuneration and Appraisal Committee
The Remuneration and Appraisal Committee of our Company consists of three Directors,
namely, Mr. Cao Zhinian, Mr. Feng Genfu, and Mr. Y an Lei. Mr. Y an Lei serves as the chairman
of the committee. The primary duties of the Remuneration and Appraisal Committee of our
Company include (but are not limited to):
 Formulating and reviewing remuneration policies for Directors and senior
management, ensuring transparency and fairness;
 Evaluating executive Directors’ performance and approving their service contracts;
 Recommending the evaluation of executive Directors’ performance and approving
their service contracts;
 Considering market comparisons, time commitments, and responsibilities in setting
remuneration;
 Approving compensation for loss or termination of office, ensuring alignment with
contractual terms;
 Ensuring no Director is involved in deciding their own remuneration;
 Managing equity incentive plans and employee stock ownership plans; and
 Handling other matters as required by laws, regulations, and our Articles of
Association.
Nomination Committee
The Nomination Committee of our Company consists of three Directors, namely, Ms.
Qian Ying, Mr. Feng Genfu, and Mr. Y an Lei. Mr. Feng Genfu serves as the chairman of the
committee. The primary duties of the Nomination Committee of our Company include (but are
not limited to):
 Formulating and recommending criteria and procedures for selecting Directors and
senior management, and advising our Board on these standards;
 Identifying and nominating qualified candidates for Directors and senior
management positions, and advising the Board on appointments and removals;
 Reviewing the Board’s performance, structure, size, and composition, including
skills, knowledge, and diversity, and recommending changes to align with the
Company’s strategy;
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 Developing and maintaining a Board diversity policy and disclosing it in the
Company’s corporate governance report;
 Evaluating the independence of independent non-executive Directors and advising
on succession planning for key roles; and
 Handling other matters required by laws, rules, and regulations of the jurisdictions
where our Shares are listed, our Articles of Association, or as authorized by our
Board.
Strategy Committee
The Strategy Committee of our Company consists of three Directors, namely, Mr. Qin
Yinglin, Ms. Y ang Ruihua, and Mr. Chow Ming Sang. Mr. Qin Yinglin serves as the chairman
of the committee. The primary duties of the Strategy Committee of our Company include (but
are not limited to):
 Reviewing and providing recommendations on the long-term strategic development
of our Company;
 Evaluating and advising on major investment and financing proposals that require
Board approval as stipulated in our Articles of Association;
 Assessing and advising on significant capital operations and asset management
projects that require Board approval as stipulated in our Articles of Association;
 Evaluating and advising on other significant matters affecting the development of
our Company;
 Monitoring the implementation of the above matters; and
 Handling other matters authorized by our Board.
Sustainable Development Committee
The Sustainability Committee of our Company consists of three Directors, namely, Mr.
Qin Yinglin, Mr. Chow Ming Sang, and Mr. Feng Genfu. Mr. Qin Yinglin serves as the
chairman of the committee. The primary duties of the Sustainability Committee of our
Company include (but are not limited to):
 Advising the Board on major decisions related to the sustainable development of our
Company, including environmental, social, and governance (ESG) matters;
 Overseeing the implementation and progress of our Company’s sustainability
strategies and plans;
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 Monitoring our Company’s performance in addressing key issues such as climate
change, public health and safety, and social responsibility, and advising the Board
accordingly;
 Keeping abreast of significant information related to sustainability matters affecting
our business, and providing recommendations to the Board on sustainability-related
issues;
 Identifying sustainability risks relevant to our Company, assessing their impact, and
advising the Board on risk management strategies;
 Reviewing the Company’s annual Social Responsibility Report, sustainability policy
documents, and other sustainability-related disclosure materials, and making
recommendations to the Board; and
 Handling other matters delegated by the Board.
BOARD DIVERSITY POLICY
Our Company has adopted a board diversity policy (the “ Board Diversity Policy ”)
setting out the approach to achieve diversity on our Board.
The Nomination Committee of our Company reviews and assesses our Board composition
on behalf of our Board and recommends the appointment of new Directors, taking into account
a number of aspects, including but not limited to gender, age, cultural and educational
background, ethnicity, professional experience, skills, knowledge, industry and regional
experience, and length of service. All Board appointments will be based on meritocracy, and
candidates will be considered against objective criteria, having due regard for the benefits of
diversity on our Board. The Nomination Committee will disclose the composition of our Board
annually in the corporate governance report and monitor the implementation of the Board
Diversity Policy. The Nomination Committee will review the Board Diversity Policy and assess
its effectiveness, and where necessary, make any revisions that may be required and
recommend any such revisions to our Board for consideration and approval.
Our Board has a balanced mix of experiences and industry background. Our Directors
have a diverse education background including economics, law, accounting, business
administration and management, as well as different industry backgrounds and professional
qualifications. We have three Independent Non-executive Directors with different industry
backgrounds, representing more than one third of the members of our Board. Furthermore, our
Board has two female Directors, and has a wide age range comprising members from their 40s
to 60s. Considering our Company’s business model and the backgrounds and abilities of our
Directors, the composition of our Board satisfies the Board Diversity Policy.
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The Nomination Committee is responsible for ensuring the diversity of our Board and will
use its best efforts to identify and recommend suitable candidates for our Board’s
consideration, subject to our Directors being satisfied with the qualification and experience of
the relevant candidates after a reasonable review process based on the relevant criteria, and
fulfilling their fiduciary duties to act in the best interests of our Company and our Shareholders
as a whole when making the relevant appointments.
COMPLIANCE ADVISER
In accordance with Rule 3A.19 of the Listing Rules, our Company has appointed
Somerley Capital Limited as our compliance adviser. Pursuant to Rule 3A.23 of the Listing
Rules, our Company will consult with and seek advice from the compliance adviser on a timely
basis in the following circumstances:
(a) before the publication of any regulatory announcement, circular or financial report;
(b) where a transaction, which might be a notifiable or connected transaction under
Chapter 14 or 14A of the Listing Rules, is contemplated including share issues and
share repurchases;
(c) where our Company proposes to use the proceeds of the Listing in a manner
different from that detailed in this prospectus or where the business activities,
developments or results of our Group deviate from any forecast, estimate, or other
information in the listing document; and
(d) where the Stock Exchange makes an inquiry of the listed issuer under Rule 13.10 of
the Listing Rules.
The term of appointment of the compliance adviser of our Company shall commence on
the Listing Date and end on the date on which our Company complies with Rule 13.46 of the
Listing Rules in respect of the financial results for the first full financial year commencing
after the Listing Date and such appointment shall be subject to extension by mutual agreement.
COMPENSATION AND REMUNERATION OF DIRECTORS AND SENIOR
MANAGEMENT
The aggregate remuneration (including directors’ fees, salary, allowances and benefits in
kind, retirement scheme contributions, discretionary bonuses and share-based payments) for
our Directors for the years ended December 31, 2022, 2023 and 2024 and the nine months
ended September 30, 2025 were RMB9.7 million, RMB5.8 million, RMB8.4 million and
RMB10.1 million, respectively.
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The aggregate remuneration (including salary and other emoluments, retirement scheme
contributions, discretionary bonuses and share-based payments) for our Company’s five
highest paid individuals for the years ended December 31, 2022, 2023 and 2024 and the nine
months ended September 30, 2025 were RMB26.3 million, RMB18.4 million, RMB18.7
million and RMB17.7 million, respectively.
During the Track Record Period, no remuneration was paid by us to, or receivable by, our
Directors or the five highest-paid individuals as an inducement to join or upon joining our
Company. No compensation was paid by us to, or receivable by, our Directors or the five
highest-paid individuals during the Track Record Period for the loss of any office in connection
with the management of the affairs of any subsidiary of our Company. Save as disclosed above,
no other payments have been made or are payable in respect of the years ended December 31,
2022, 2023 and 2024 and the nine months ended September 30, 2025, by any member of our
Group to any of our Directors or the five highest-paid individuals.
The remuneration of our Directors and senior management is determined with reference
to factors including the completion status of our Company’s financial indicators and business
objectives, scope of work and responsibilities of senior management, completion status of
various performance indicators for Directors and senior management and operational
performance regarding the business innovation and profit-generating capabilities of directors
and senior management. Under the arrangements currently in force, we estimate the aggregate
remuneration, excluding discretionary bonus, of our Directors for the year ending December
31, 2026 to be approximately RMB15.5 million.
EMPLOYEE SHARE INCENTIVE SCHEMES
Share Incentive Plan for Executive Directors, Senior Management and Key Employees
For details of our share incentive plans, see “Appendix VI. Statutory and General
Information — 4. Our Incentive Plan.”
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OVERVIEW
As of the Latest Practicable Date, our Controlling Shareholders Group, comprising Mr.
Qin Yinglin, Ms. Qian Ying and Muyuan Group, collectively held approximately 54.91% of our
total share capital and controlled 55.62% of the voting rights in our Company. Immediately
following the completion of the Global Offering (assuming the Over-allotment Option is not
exercised and excluding A Shares issuable upon the conversion of the outstanding Convertible
Bonds), the Controlling Shareholders Group will continue to hold approximately 52.29% of our
total share capital and control 52.93% of the voting rights in our Company in aggregate. Under
PRC law, treasury shares do not carry voting rights. Accordingly, the voting rights attached to
the treasury shares repurchased by our Company on the A-share market are excluded when
calculating the voting rights of the Controlling Shareholders. Therefore, they will remain as our
Controlling Shareholders Group immediately after the Listing.
Apart from the operations of our Group, Muyuan Group primarily engages in organic
fertiliser manufacturing, construction services, equipment manufacturing, and logistics and
transportation. The remaining businesses of Muyuan Group are distinct from those of our
Group, which operates within the hog farming industry and principally engages in hog
breeding, feed producing, slaughtering, and meat processing.
For a simplified corporate structure chart of our Group, see “History, Development and
Corporate Structure — Our Shareholding and Corporate Structure.”
NON-COMPETITION UNDERTAKING
Non-Competition Undertaking Given by Mr. Qin Yinglin, Ms. Qian Ying and Muyuan
Group
On March 25, 2011, Mr. Qin Yinglin, Ms. Qian Ying and Muyuan Group provided a
long-term non-compete undertaking to our Company, pursuant to which they undertakes,
among others, that:
(1) they, or other enterprises or economic organizations that they severally or jointly
control (excluding the Company) will not within or outside the PRC directly or
indirectly engage in business activities that compete with or pose a competitive
threat to the main business or primary products of our Company, including but not
limited to: (i) engaging in feed processing, hog breeding, hog farming and
slaughtering, meat product processing and sales; (ii) investing in, acquiring,
merging with, or through trusteeship, contracting, leasing, or operating any
enterprises or business organizations engaging in feed processing, hog breeding, hog
farming and slaughtering, meat product processing and sales; (iii) providing any
form of support or assistance in terms of funds, business, and technology to
enterprises or business organizations that have a competitive relationship with our
Company;
RELATIONSHIP WITH OUR CONTROLLING SHAREHOLDERS
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(2) if our Company expands into new business areas in the future, our Company will
have priority, and they and other enterprises or economic organizations solely or
jointly controlled by them (excluding our Company) will not develop similar
businesses; and
(3) if any of them violates the above undertakings, as a result of which our Company
suffers a loss, they will be liable for the damages suffered by our Company.
CONFIRMATION IN RELATION TO ANY COMPETING INTEREST
Each of our Controlling Shareholders has confirmed that he/she/it does not have any
interests in any business (apart from the business of the Group) that competes or is likely to
compete, directly or indirectly, with our principal business, which is required to be disclosed
under Rule 8.10 of the Listing Rules.
INDEPENDENCE FROM OUR CONTROLLING SHAREHOLDERS
Having considered the following factors, our Directors are of the view that we are able
to conduct our business independently from our Controlling Shareholders after the Global
Offering.
Management Independence
Our business has been managed and conducted by our Board and senior management. Our
Board consists of eight Directors, comprising three Executive Directors, two Non-executive
Directors and three Independent Non-executive Directors, and we also have eleven senior
management members (of which three are Executive Directors). Each of our Directors and
senior management possesses relevant management, financial or industry experience to
contribute to the management of our business. For further information on the qualifications and
experience of our Directors and senior management, see “Directors and Senior Management.”
RELATIONSHIP WITH OUR CONTROLLING SHAREHOLDERS
– 301 –


--- page 313 ---
Save as disclosed below, none of our Directors or members of our senior management
holds a directorship or other position in Muyuan Group or close associates of our Controlling
Shareholders:
Name Position in our Company
Name of the Corporate
Controlling Shareholder or its
Close Associates Position
Ms. Qian
Ying /H1118/H1118/H1118/H1118
Non-executive Director Muyuan Group Executive
director and
the general
manager
Shanghai Zhending
Enterprise Management
Consulting Co., Ltd. ( ɪ
ࠢ
ʮ̡)
Executive
director and
the general
manager
Jinding Capital Management
(Shenzhen) Co., Ltd. ( ᎀ
ཻ༟͉၍ଣ(ଉέ)ʮ
̡)
Executive
director and
the general
manager
Mr. Cao
Zhinian /H1118
Vice Chairman of the
Board, Executive
Director, Executive
Vice President,
Person in charge of
Finance
Henan Neixiang Rural
Commercial Bank Co.,
Ltd. (ʫඊ༵Ӏਠุვ
ʮ̡)
Director
Mr. Qin
Jun /H1118/H1118/H1118/H1118/H1118
Board Secretary, Chief
Strategy Officer
Shanghai Lingyue
Investment Management
Co., Ltd. (ҳ༟
ʮ̡)
Director
Mr. Y uan
Hebin /H1118/H1118/H1118
Chief Legal Officer Shanghai Lingyue
Investment Management
Co., Ltd. (ҳ༟
ʮ̡)
Director
Cnex Fire V ehicle
Manufacturing Co., Ltd.
(ࠢ
ʮ̡)
Director
Neixiang County Shengduo
Watershed Water
Ecological Environment
Treatment Co., Ltd. ( ʫඊ
ط
ʮ̡)
Director
RELATIONSHIP WITH OUR CONTROLLING SHAREHOLDERS
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--- page 314 ---
Notwithstanding the fact that one Executive Director, namely Mr. Cao Zhinian, one
Non-executive Director, namely Ms. Qian Ying, and two members of our senior management
team, namely Mr. Qin Jun and Mr. Y uan Hebin, collectively, the “ Overlapping Directors and
Senior Management ”), hold overlapping directorship or other positions in our Controlling
Shareholders or their close associates, we are of the view that our Company can be managed
independently for the following reasons:
(1) Ms. Qian Ying is a Non-executive Director and is mainly responsible for supervising
corporate governance and reviewing strategies and risks of our Company and will
not be involved in the day-to-day operation and management of our Company. The
day-to-day management and operations of our Company will be dealt with by a team
of full-time management members who have been serving our Group for a long time
and are familiar with our business;
(2) Mr. Cao Zhinian, Mr. Qin Jun and Mr. Y uan Hebin are not involved in the day-to-day
management and operations when serving their positions in the close associates of
Muyuan Group and are not receiving remuneration from those positions;
(3) our daily management and operations are carried out independently by our senior
management team, all of whom have substantial experience in the industry in which
our Company is engaged, and will therefore be able to make business decisions that
are in the best interests of our Company. For details of the industry experience of
our senior management team, see “Directors and Senior Management”;
(4) each Director is aware of his/her fiduciary duties as a director which require, among
other things, that he/she acts for the benefit and in the interest of our Company and
does not allow any conflict between his/her duties as a Director and his/her personal
interests;
(5) in the event that there is a potential conflict of interest arising out of any transaction
to be entered into between our Company and a Director and/or his/her associate,
he/she shall abstain from voting and shall not be counted towards the quorum for the
voting. Hence, no Director will be able to influence our Board in making decisions
on matters in which he or she is, or may be interested;
(6) we have three Independent Non-executive Directors and certain matters of our
Company, must always be referred to the Independent Non-executive Directors for
review. We have adopted a series of corporate governance measures to manage
conflicts of interest, if any, between our Company and our Controlling Shareholders
which would support our independent management. See “— Corporate Governance
Measures”;
RELATIONSHIP WITH OUR CONTROLLING SHAREHOLDERS
– 303 –


--- page 315 ---
(7) we have appointed Somerley Capital Limited as our compliance adviser, which will
provide advice and guidance to our Company in respect of compliance with the
applicable laws and Listing Rules, including various requirements relating to
Directors’ duties and corporate governance; and
(8) as an A-share listed company, we have formulated and adopted a comprehensive
internal control and management system in compliance with the relevant
requirements of the rules of the Shenzhen Stock Exchange. The Articles of
Association has also included relevant provisions to manage conflict of interest,
pursuant to which our Directors are prohibited from voting in any Board resolution
approving any contract or arrangement or any other proposal in which he/she or any
of his/her close associates has a material interest, and shall not be counted in the
quorum present at the particular Board meeting.
Based on the above, our Directors believe that our Board as a whole and together with our
senior management are able to perform the managerial role in our Company independently
from our Controlling Shareholders and their respective close associates after the Listing.
Operational Independence
Our Directors are of the view that we can continue operating independently from our
Controlling Shareholders after the Listing. Despite the controlling interest in our Company
retained by our Controlling Shareholders after the Listing, we hold and enjoy the benefit of all
relevant permits and licenses necessary for carrying out our business in all material respect,
and we have sufficient capital, facilities, equipment and employees to operate our business
independently from our Controlling Shareholders. We also have full powers to make all
decisions regarding, and to carry out, our own business operations independently from our
Controlling Shareholders. In addition, our access to, and relationship with, our key customers
and suppliers are independent from our Controlling Shareholders.
We have entered into a number of transactions with our Controlling Shareholders, the
details of which are set out in the section headed “Connected Transactions” in this prospectus.
These transactions did not and are not expected to constitute a significant percentage of our
Group’s total revenue and are not material to the operation and conduct of our Group’s
principal business. Therefore, our Directors believe that these continuing connected
transactions do not affect our operational independence.
In light of the above, our Directors are satisfied that we have been operating
independently from our Controlling Shareholders and their respective associates during the
Track Record Period and will continue to be able to operate independently upon Listing.
RELATIONSHIP WITH OUR CONTROLLING SHAREHOLDERS
– 304 –


--- page 316 ---
Financial Independence
We have adopted our own independent internal control, accounting, funding, reporting
and financial management systems, and we also have an independent accounting and finance
department responsible for discharging relevant financial and treasury function with relevant
finance personnel.
Moreover, we open and manage our bank accounts independently and do not share any
bank account with our Controlling Shareholders. We are also capable of obtaining financing
from third parties, if necessary, without reliance on our Controlling Shareholders in view of our
Group’s strong financial position, steady cash flow generation and level of liquid assets, as
well as our ability to raise funds on a standalone basis. We do not expect to rely on our
Controlling Shareholders and their respective close associates for financing after the Listing as
we expect that our working capital will be funded by cash flows generated from operating
activities, the cash and cash equivalent on hand and internally generated funds as well as the
proceeds from the Global Offering.
Mr. Qin Yinglin, Ms. Qian Ying and Muyuan Group Connected Persons have provided
guarantees for certain bank loans and bills we obtained for financing our development and
operations (the “ CS Guarantees ”). We expect the CS Guarantees to continue following the
Listing until the repayment of the underlying bank loans or bills that are subject to the CS
Guarantees. The CS Guarantees are provided to certain independent commercial banks as
security for our bank loans or bills. As of September 30, 2025, the outstanding guaranteed loans
and guarantees on bills with the CS Guarantees amounted to RMB37.1 billion. Muyuan Group
has also from time to time provided borrowings to us, for financing our development and
operations (the “ CS Borrowings ”, together with the CS Guarantees, the “ CS Guarantees and
Borrowings ”) during the Track Record Period. As a result of our development strategy changes
from high-speed business expansion to high-quality development, we reduced our CS
Borrowings. As of December 31, 2022 and 2023, we had outstanding CS Borrowings of RMB1
billion and RMB1.9 billion, respectively. As of December 31, 2024 and September 30, 2025,
we had no outstanding CS Borrowings.
Notwithstanding the CS Guarantees and Borrowings, we are capable of obtaining
financing from independent third parties without relying on any guarantee or security provided
by our Controlling Shareholders or their respective associates. As of September 30, 2025, we
held a total of RMB23.4 billion in bank loans and bills that were neither guaranteed nor secured
by our Controlling Shareholders or their respective associates. Moreover, we have maintained
a robust liquidity position. As of September 30, 2025, our current assets amounted to RMB60.6
billion, including cash at bank and on hand amounted to RMB19.0 billion. In the past, without
CS Guarantees, we have also successfully issued Preference A Shares in 2017, non-public
offering of A Shares to Independent Third Parties in 2019, and Convertible Bonds in 2021,
raising funds amounted to approximately RMB2.5 billion, RMB5.0 billion and RMB9.6
billion, respectively. See “History, Development and Corporate Structure.”
RELATIONSHIP WITH OUR CONTROLLING SHAREHOLDERS
– 305 –


--- page 317 ---
The underlying bank loans and bills that are subject to the CS Guarantees were negotiated
on normal commercial terms and were guaranteed by our Controlling Shareholders or their
close associates due to such financing institutions internal lending policies. We consider that
the premature discharge of all outstanding CS Guarantees before the Listing would be unduly
onerous for our Group and not in the best interests of our Group and Shareholders as a whole.
Releasing such guarantees would require discussion with and the internal vetting procedures of
the relevant banks, a time-consuming process that could impact our normal operations as
early-repaying these loans would disturb our Group’s financing pace.
Following the Listing, we expect to pursue further fundraising activities in both onshore
and offshore markets to the extent as our Directors consider necessary, depending on factors
such as market conditions, business needs, and financial position, while ensuring compliance
with applicable regulatory requirements. Given our proven ability to secure independent
financing and our established relationships with financial institutions, we believe that after the
Listing, we will continue obtaining financing on terms comparable to our existing loans
without requiring guarantees from our Controlling Shareholders or their close associates.
Based on the above, our Directors believe that we are able to operate independently of our
Controlling Shareholders and their close associates from a financial perspective without undue
reliance on our Controlling Shareholders or their close associates.
CORPORATE GOVERNANCE MEASURES
Our Directors acknowledge the importance of good corporate governance in protection of
our Shareholders’ interests. In order to further manage any potential conflicts of interest with
the Controlling Shareholders and their respective close associates, we have adopted the
following measures:
(1) as part of our preparation for the Global Offering, we have amended our Articles of
Association to comply with the Listing Rules, and in particular, our Articles of
Association provide that, a Director shall not vote on any resolution approving any
contract or arrangement or any other proposal in which such Director or any of
his/her close associates have a material interest nor shall such Director be counted
in the quorum present at the meeting in respect of the resolution considering the
approval of such contract or arrangement or proposal. In addition, where a general
meeting of our Shareholders is to be held for considering proposed transactions in
which any of our Controlling Shareholders or their respective close associates has
a material interest, the relevant Controlling Shareholders will abstain from voting on
the relevant resolutions;
(2) our Company has formulated and adopted policies and mechanisms in relation to (i)
internal controls and decision-making procedures for related party transactions and
connected transactions, (ii) the prevention of appropriation of funds by Controlling
Shareholders, actual controllers and other related parties, (iii) provision of external
guarantee, and (iv) internal audit;
RELATIONSHIP WITH OUR CONTROLLING SHAREHOLDERS
– 306 –


--- page 318 ---
(3) if our Group and our Controlling Shareholders or any of their associates intend to
engage in any connected transaction, our Company will comply with the relevant
requirements relating to connected transactions under the Listing Rules;
(4) as required by the Listing Rules, our Independent Non-executive Directors shall
review any continuing connected transactions annually and confirm in our annual
reports that such transactions have been entered into in our ordinary and usual
course of business, are either on normal commercial terms or on terms no less
favorable to us than those available to or from Independent Third Parties and on
terms that are fair and reasonable and in the interests of our Shareholders as a whole;
(5) we will keep a balanced composition of Executive and Independent Non-executive
Directors on the Board. We have appointed three Independent Non-executive
Directors and we believe our Independent Non-executive Directors possess
sufficient experience and are free of any business or other relationship that could
interfere in any material manner with the exercise of their independent judgment.
We also believe that our Independent Non-executive Directors are able to provide
impartial opinions to safeguard the interests of our Shareholders as a whole;
(6) where our Independent Non-executive Directors request or are requested to review
any conflict of interests circumstances between our Group and our Controlling
Shareholders and their respective close associates, our Controlling Shareholders
and/or our other Directors shall provide our Independent Non-executive Directors
with all necessary information for consideration and our independent non-executive
Directors shall be provided with access to independent advisers at the expense of our
Company;
(7) where our Directors reasonably request the advice of independent professionals,
such as financial advisers, the appointment of such independent professionals will
be made at our Company’s expenses; and
(8) we have appointed Somerley Capital Limited as our compliance adviser to provide
advice and guidance to us in respect of compliance with the applicable laws and
regulations and the Listing Rules, including various requirements relating to
corporate governance, upon Listing.
RELATIONSHIP WITH OUR CONTROLLING SHAREHOLDERS
– 307 –


--- page 319 ---
We will engage in certain transactions with our connected persons after the Listing, which
will constitute continuing connected transactions under Chapter 14A of the Listing Rules.
OUR CONNECTED PERSONS
The following persons, with whom we have entered into certain transaction in our
ordinary course of business, will become our connected persons as defined under the Listing
Rules upon completion of the Listing:
Connected persons Connected relationship
Muyuan Group Connected Persons /H1118/H1118/H1118/H1118/H1118/H1118Muyuan Group is a member of our
Controlling Shareholders.
Mr. Qin Yinglin and Ms. Qian Ying /H1118/H1118/H1118/H1118Mr. Qin Yinglin and Ms. Qian Ying are
members of our Controlling Shareholders.
Mr. Qin Yinglin is an Executive Director.
Ms. Qian Ying is a Non-executive Director
and the spouse of Mr. Qin Yinglin.
Henan Neixiang Rural Commercial Bank
Co., Ltd. (΅
ʮ̡,“ Neixiang RCB ”) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
As of the Latest Practicable Date, Neixiang
RCB was held as to 30.00% by Muyuan
Group and thus an associate of Muyuan
Group.
SUMMARY OF OUR CONTINUING CONNECTED TRANSACTIONS
Transaction Counterparty
Category of
continuing
connected
transaction
Applicable
Listing Rule Waiver sought
Fully-exempt Connected Transactions
1. /H1118/H1118Financial Assistance
to our Group
Mr. Qin Yinglin, Ms.
Qian Ying and/or
Muyuan Group
Connected Persons
Fully exempt 14A.90 N/A
2. /H1118/H1118Sales of products
and goods
Muyuan Group
Connected Persons
Fully exempt 14A.76(1) N/A
3. /H1118/H1118Provision of
services
Muyuan Group
Connected Persons
Fully exempt 14A.76(1) N/A
4. /H1118/H1118/H1118Short-term Property
Rental from
Muyuan Group
Muyuan Group
Connected Persons
Fully exempt 14A.76(1) N/A
CONNECTED TRANSACTIONS
– 308 –


--- page 320 ---
Transaction Counterparty
Category of
continuing
connected
transaction
Applicable
Listing Rule Waiver sought
5. /H1118/H1118/H1118Short-term Property
Rental to Muyuan
Group
Muyuan Group
Connected Persons
Fully exempt 14A.76(1) N/A
Partially-exempt Connected Transactions
6. /H1118/H1118/H1118Procurement of
products and
goods
Muyuan Group
Connected Persons
Partially
exempt
14A.76(2)
14A.105
Announcement
7. /H1118/H1118/H1118Procurement of
services
Muyuan Group
Connected Persons
Partially
exempt
14A.76(2)
14A.105
Announcement
8. /H1118/H1118/H1118Procurement of
financial services
Muyuan Group
Connected Persons
Partially
exempt
14A.76(2)
14A.105
Announcement
FULLY-EXEMPT CONTINUING CONNECTED TRANSACTIONS
We have entered into the following transactions with Mr. Qin Yinglin, Ms. Qian Ying
and/or Muyuan Group Connected Persons on normal commercial terms, which will continue
after the Listing.
Financial Assistance Provided by Mr. Qin Yinglin, Ms. Qian Ying and/or Muyuan Group
Connected Persons
Mr. Qin Yinglin, Ms. Qian Ying and Muyuan Group and its subsidiaries have provided
guarantees for certain bank loans and bills we obtained (the “ CS Guarantees ”), and Muyuan
Group has provided borrowings to us, for financing our development and operations (the “ CS
Borrowings ”, together with the CS Guarantees, the “ CS Guarantees and Borrowings ”). We
expect the CS Guarantees and Borrowings to continue following the Listing. For further details
of the CS Guarantees and Borrowings, see “Relationship with Our Controlling Shareholders —
Independence from Our Controlling Shareholders — Financial Independence”.
The CS Guarantees and Borrowings, being a form of financial assistance (as defined
under the Listing Rules), are not secured by the assets of our Group. Our Directors are of the
view that the CS Guarantees and Borrowings are conducted on normal commercial terms and
are in the interest of our Company and our Shareholders as a whole. Therefore, pursuant to
Rule 14A.90 of the Listing Rules, the CS Guarantees and Borrowings will be fully exempted
from the reporting, annual review, announcement, circular (including independent financial
advice), and independent Shareholders’ approval requirements under Chapter 14A of the
Listing Rules.
CONNECTED TRANSACTIONS
– 309 –


--- page 321 ---
Sales of Products and Goods
We have entered into and will continue to enter into after the Listing certain agreements
with Muyuan Group, for itself and on behalf of Muyuan Group Connected Persons, pursuant
to which we sell to Muyuan Group Connected Persons various products and goods, mainly
including meat products and pig manure. The pricing of such products and goods are
determined by our Group and Muyuan Group Connected Persons on normal commercial terms,
negotiated on an arm’s length basis, subject to, among others, the quantities, the quality and
reliability of the products, the prevailing market conditions and the principle of fairness.
As the applicable percentage ratios calculated under Chapter 14A of the Listing Rules will
be less than 0.1%, our sales of products and goods to Muyuan Group Connected Persons will
be fully exempt from all of the reporting, annual review, announcement, circular and
independent shareholders’ approval requirements under Chapter 14A of the Listing Rules
pursuant to Rule 14A.76(1) of the Listing Rules.
Provision of Services
We have entered into and will continue to enter into after the Listing certain agreements
with Muyuan Group, for itself and on behalf of Muyuan Group Connected Persons, pursuant
to which, our Group supplies to Muyuan Group Connected Persons certain services, mainly
including inspecting, equipment rental and platform services. The prices of the services are
determined based on normal commercial terms after arm’s length negotiations between the
relevant parties, with reference to, among others, the costs, the quantities, the quality and
reliability of such services and the prevailing market conditions.
As the applicable percentage ratios calculated under Chapter 14A of the Listing Rules will
be less than 0.1%, services provided by our Group to Muyuan Group Connected Persons will
be fully exempt from all of the reporting, annual review, announcement, circular and
independent shareholders’ approval requirements under Chapter 14A of the Listing Rules
pursuant to Rule 14A.76(1) of the Listing Rules.
Short-term Property Rental from Muyuan Group
We have entered into and will continue to enter into after the Listing certain agreements
with Muyuan Group, for itself and on behalf of Muyuan Group Connected Persons, pursuant
to which, our Group rent from Muyuan Group Connected Persons certain properties, mainly
including offices and parking lots. The prices of the rentals are determined based on normal
commercial terms after arm’s length negotiations between the relevant parties, with reference
to, among others, the prevailing market rents of similar properties in similar region, the
conditions of the property, including but not limited to its location and the facilities associated
with the property. These short-term property rentals will not be recognized as right-of-use
assets and are treated as our continuing connected transactions.
CONNECTED TRANSACTIONS
– 310 –


--- page 322 ---
As the applicable percentage ratios calculated under Chapter 14A of the Listing Rules will
be less than 0.1%, property rentals by our Group from Muyuan Group Connected Persons will
be fully exempt from all of the reporting, annual review, announcement, circular and
independent shareholders’ approval requirements under Chapter 14A of the Listing Rules
pursuant to Rule 14A.76(1) of the Listing Rules.
Short-term Property Rental to Muyuan Group
We have entered into and will continue to enter into after the Listing certain agreements
with Muyuan Group, for itself and on behalf of Muyuan Group Connected Persons, pursuant
to which, our Group rent to Muyuan Group Connected Persons certain properties, mainly for
office and business operation use. The rents charged by our Group during the leasing term are
determined based on normal commercial terms after arm’s length negotiations between the
relevant parties, and the leasing shall be equivalent to the prevailing market rates of properties
of comparable size and quality situated in the same locality available to or offered by
Independent Third Parties, which are in the best interests of our Company and our Shareholders
as a whole.
As the applicable percentage ratios calculated under Chapter 14A of the Listing Rules will
be less than 0.1%, property rentals by Muyuan Group Connected Persons from our Group will
be fully exempt from all of the reporting, annual review, announcement, circular and
independent shareholders’ approval requirements under Chapter 14A of the Listing Rules
pursuant to Rule 14A.76(1) of the Listing Rules.
PARTIALLY-EXEMPT CONTINUING CONNECTED TRANSACTION
Procurement of Products and Goods
Principal Terms
On January 26, 2026, our Company, for itself and on behalf of its subsidiaries, entered
into a framework agreement (the “ Procurement of Products and Goods Framework
Agreement ”) with Muyuan Group, for itself and on behalf of Muyuan Group Connected
Persons, pursuant to which our Group will procure from Muyuan Group Connected Persons
various products and goods, including but not limited to engineering and mechanical
equipment materials, vehicles and spare parts, finished oil, petrochemical products, organic
fertilizers, labor protection supplies, beverages, and agricultural products (the “ Procured
Products ”).
The Procurement of Products and Goods Framework Agreement will become effective on
the Listing Date and end on December 31, 2026. Both parties or their respective subsidiaries
will enter into separate underlying agreements which will set out the specific terms and
conditions according to the principles provided in the Procurement of Products and Goods
Framework Agreement.
CONNECTED TRANSACTIONS
–3 1 1–


--- page 323 ---
Pricing Policy
The amount to be paid by our Group to Muyuan Group Connected Persons under the
Procurement of Products and Goods Framework Agreement generally adopts a market-based
method and will be determined through fair negotiations, taking into account the factors
including (i) the market price of relevant products and (ii) their cost and profit margin.
Reasons for the Transaction
During the Track Record Period, we have procured the Procured Products from Muyuan
Group Connected Persons and we expect that we will continue to procure these products after
the Listing. Our Group has a long-term and stable business relationship with Muyuan Group
Connected Persons. Muyuan Group Connected Persons are familiar with the products and
goods we require and supply these for our operational needs, maintenance, and employee
welfare purposes. We are not and will not be bound to collaborate with Muyuan Group
Connected Persons, and we will only procure the required products and goods from Muyuan
Group Connected Persons if we consider it is in the interests of our Company and Shareholders
as a whole. Such collaboration with Muyuan Group Connected Persons not only ensures a
reliable supply chain but also provides opportunities to optimize our procurement processes
and cost efficiency.
Historical Amounts
For the years ended December 31, 2022, 2023 and 2024 and the nine months ended
September 30, 2025, the historical transaction amounts with respect to our procurement of the
above products from Muyuan Group Connected Persons were RMB749.22 million,
RMB785.79 million, RMB914.50 million, and RMB988.00 million respectively.
Annual Cap
The following table sets forth the proposed annual cap for the annual transaction amounts
to be paid by our Group to Muyuan Group Connected Persons under the Procurement of
Products and Goods Framework Agreement:
For the year ending
December 31,
2026
(RMB in million)
Total amount to be paid by us to Muyuan Group
Connected Persons /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,745.00
CONNECTED TRANSACTIONS
– 312 –


--- page 324 ---
The proposed annual cap is determined based on:
(i) the historical amounts of the transactions between the Group and Muyuan Group
Connected Persons during the Track Record Period in respect of the procurement of
such products and for the ten months ended October 31, 2025, the transaction
amount with respect to our procurement of the Procured Products has reached
RMB1,099.62 million;
(ii) our Group’s projected operational requirements and anticipated demand for these
products, and the major increases in the proposed annual cap 2026 is for
procurement of finished oil, liquefied natural gas, petrochemical products from
Muyuan Group Connected Persons considering our business plans for 2026; and
(iii) other factors including but not limited to the expected market price of similar
products on normal commercial terms, alongside the expected increase in
transaction amount for 2026.
The annual cap 2026 considered the Group’s business operation plans for 2026 and the
expected market condition and trend. In particular, the anticipated increase in procurement of
finished oil from Muyuan Group Connected Persons considering the quality of finished oil the
Company previously procured from such persons was of relatively high-quality with lower
price and the Group has been increasing the procurement of finished oils from Muyuan Group
Connected Persons. Additionally, the Group expects further increase in procurement of such
finished oil products in 2026 from Muyuan Group Connected Persons to support the Group’s
business operation plan, which contributes to the further increase in the annual cap set for
2026.
In addition, based on our ongoing procurement relationship and negotiations with
Muyuan Group Connected Persons, we have evaluated their supply capacity and market
position. Muyuan Group Connected Persons have demonstrated consistent ability to meet our
quality and quantity requirements for agricultural products, industrial materials and related
services. This established supply chain relationship supports our operational continuity and
cost efficiency. The anticipated procurement volume reflect our Group’s normal business
development needs while maintaining flexibility to source from alternative suppliers when
commercially advantageous. All procurement decisions will continue to be made based on
standard commercial considerations including price competitiveness, quality assurance and
supply reliability.
Listing Rules Implications
As the highest applicable percentage ratio of the transactions under the Procurement of
Products and Goods Framework Agreement for the year ending December 31, 2026, calculated
for the purpose of Chapter 14A of the Listing Rules, is higher than 0.1% but below 5% on an
annual basis, such transactions will, upon Listing, constitute continuing connected transactions
CONNECTED TRANSACTIONS
– 313 –


--- page 325 ---
of our Company subject to the annual reporting requirement under Rules 14A.49 and 14A.71
of the Listing Rules and the announcement requirement under Rule 14A.35 of the Listing Rules
but exempt from the independent Shareholders’ approval requirements under Rule 14A.36 of
the Listing Rules.
Procurement of Services
Principal Terms
On January 26, 2026, our Company, for itself and on behalf of its subsidiaries, entered
into a framework agreement (the “ Procurement of Services Framework Agreement ”) with
Muyuan Group, for itself and on behalf of Muyuan Group Connected Persons, pursuant to
which our Group will procure various services, including but not limited to construction
services, logistics, accommodation, catering, conference services, property management,
equipment rentals, and other business platform services (the “ Procured Services ”). The
Procurement of Services Framework Agreement will become effective on the Listing Date and
end on December 31, 2026. Both parties or their respective subsidiaries will enter into separate
underlying agreements which will set out the specific terms and conditions for the procurement
of services according to the principles provided in the Procurement of Services Framework
Agreement.
Pricing Policy
The amount to be paid by us to Muyuan Group Connected Persons under the Procurement
of Services Framework Agreement generally adopts a market-based method and will be
determined through fair negotiations, taking into account factors including: (i) the nature and
scope of services required; (ii) the service quality standards and performance requirements; and
(iii) the prevailing market rates for similar services provided by Independent Third Parties.
Reasons for the Transaction
Our Group has been procuring such services from Muyuan Group Connected Persons
during the Track Record Period in the ordinary and usual course of our business. Our Group
and Muyuan Group Connected Persons have established a long-term and stable business
relationship, and these service providers have acquired a comprehensive understanding of our
business and operational requirements for the services that we need. Given the diverse range
of services required, including construction, logistics, and property management, Muyuan
Group Connected Persons are well-positioned to meet our demands with a stable and
high-quality supply of services on terms which are similar to or better than those offered by
Independent Third Parties. Therefore, we believe it is in the best interest of the Group and our
Shareholders as a whole to continue to procure such services from these providers.
CONNECTED TRANSACTIONS
– 314 –


--- page 326 ---
Historical Amounts
For the years ended December 31, 2022, 2023 and 2024 and the nine months ended
September 30, 2025, the historical transaction amounts with respect to our procurement of
services were RMB3,440.21 million, RMB2,702.28 million, RMB1,662.20 million, and
RMB2,684.89 million, respectively.
Annual Cap
The following table sets forth the proposed annual cap for the annual transaction amounts
to be paid by us to Muyuan Group Connected Persons under the Procurement of Services
Framework Agreement:
For the year ending
December 31,
2026
(RMB in million)
Total amount to be paid by us to Muyuan Group
Connected Persons /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,620.00
The proposed annual cap is determined based on:
(i) the historical amounts of the transactions between our Group and Muyuan Group
Connected Persons during the Track Record Period in respect of the procurement of
the above services;
(ii) the existing service agreements and the expected demand of our Group for such
services due to our business operation plan, market opportunities, and operational
needs. For the ten months ended October 31, 2025, the transaction amount with
respect to our procurement of the Procured Services has reached RMB3,232.90
million;
(iii) compared to the historical transaction amounts, the proposed increases in the annual
cap for the financial year 2026 is primarily attributable to the construction of our
supreme breeding platform with reproductive sows of over 100 thousand in
Zhengzhou, the total consideration for which is expected to be around RMB2
billion, and the Group’s plan of overall upgrading and renovation of our hog houses;
and
(iv) other factors including but not limited to the expected market prices and the
customary practice in construction service industry of conducting bulk settlements
of service fees as the financial year approaches its end. Therefore, it is expected
more settlements will occur as the financial year 2025 approaches its end. The
Company expects fewer upgrading and construction projects in 2026 than in 2025.
CONNECTED TRANSACTIONS
– 315 –


--- page 327 ---
To ensure we can promptly seize market opportunities and meet our operational
requirements, we have agreed with Muyuan Group Connected Persons on a higher annual caps
to secure a stable supply of services as compared to historical transaction amounts.
Listing Rules Implications
As the highest applicable percentage ratio of the transactions under the Procurement of
Services Framework Agreement for the year ending December 31, 2026, calculated for the
purpose of Chapter 14A of the Listing Rules, is higher than 0.1% but below 5% on an annual
basis, such transactions will, upon Listing, constitute continuing connected transactions of our
Company subject to the annual reporting requirement under Rules 14A.49 and 14A.71 of the
Listing Rules and the announcement requirement under Rule 14A.35 of the Listing Rules but
exempt from the independent Shareholders’ approval requirements under Rule 14A.36 of the
Listing Rules.
Procurement of Financial Services
Principal Terms
On December 27, 2025, our Company, for itself and on behalf of its subsidiaries, entered
into a framework agreement (the “ Procurement of Financial Services Framework
Agreement ”) with Neixiang RCB, pursuant to which, Neixiang RCB will provide us with
certain financial services including deposit, settlement and other related financial services.
Pricing Policy
Deposit interest rates are implemented according to the benchmark rates and floating
ranges issued by the People’s Bank of China. The deposit, settlement and other related
financial services made with Neixiang RCB under the Procurement of Financial Services
Framework Agreement will bear the similar interest or service fee rate, adopt the same pricing
mechanism and be on the similar terms and conditions as would apply to a similar deposit,
loan, financial service and/or products made by any other customer of Neixiang RCB.
Reasons for the transactions
When we procure deposit and other related services, we select service providers
comprising connected persons and Independent Third Parties, and determine the relevant terms
of procurements through our internal selection and approval process. We are not obliged to use
the deposit and other related services provided by Neixiang RCB and retain the discretion to
select the deposit and other related services providers based on our business needs as well as
the fees and quality of the services offered by the service providers. Currently we deposit our
funds with Neixiang RCB as well as other Independent Third Party banks.
CONNECTED TRANSACTIONS
– 316 –


--- page 328 ---
Neixiang RCB is a joint-stock limited liability company established on November 30,
2017 and is a licensed banking institution authorized to conduct operations approved by the
China Banking Regulatory Commission. We have established a long and stable relationship
with Neixiang RCB and it would be conducive for us to maintain the continuity of financial
services received by us by continuing our co-operation with Neixiang RCB.
Historical Amounts
Set out below are the historical amounts of the transactions with respect to our
procurement of financial services from Neixiang RCB for the years ended December 31, 2022,
2023 and 2024 and nine months ended September 30, 2025:
For the years ended December 31,
For the
nine months
ended
September 30,
2022 2023 2024 2025
(RMB in million)
Maximum daily balance of
deposit /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,276.50 2,819.30 947.95 1,582.22
Interest income from
deposits /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111810.48 10.46 9.55 6.30
Settlement fees /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11180.11 0.07 0.25 0.002
Annual Caps
The following table sets forth the proposed annual caps for the annual transaction
amounts to be paid by us to Muyuan Group Connected Persons under the Procurement of
Services Framework Agreement:
For the years ending
December 31,
2026
(RMB in million)
Maximum daily balance of deposit /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,000.00
Interest Income from deposits /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111820.00
Settlement fees /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11180.25
The proposed annual caps are determined based on (i) the historical daily deposit balances
during the Track Record Period; (ii) our Group’s projected business operation and development
plan. In addition, against the background of declining deposit interest rates, Neixiang RCB can
offer a relatively better deposit interest rates as compared to other banks.
CONNECTED TRANSACTIONS
– 317 –


--- page 329 ---
Listing Rules Implications
As the highest applicable percentage ratio of the transactions under the Procurement of
Financial Services Framework Agreement for the year ending December 31, 2026, calculated
for the purpose of Chapter 14A of the Listing Rules, is higher than 0.1% but below 5% on an
annual basis, such transactions will, upon Listing, constitute continuing connected transactions
of our Company subject to the annual reporting requirement under Rules 14A.49 and 14A.71
of the Listing Rules and the announcement requirement under Rule 14A.35 of the Listing Rules
but exempt from the independent Shareholders’ approval requirements under Rule 14A.36 of
the Listing Rules.
Though both the Procurement of Products and Goods Framework Agreement and the
Procurement of Services Framework Agreement are entered into between the Company and
Muyuan Group, they are not aggregated for the purpose of classification of connected
transactions under Rule 14A.82 considering the transactions under the two framework
agreements are of different nature and are unrelated. The Procured Products are not for the
purpose of the Procured Services, as the Procured Services include construction services,
logistics, accommodation, catering, conference services, property management, equipment
rentals, and other business platform services, which are of different nature and unrelated to the
Procured Products (which include engineering and mechanical equipment materials, vehicles
and spare parts, finished oil, petrochemical products, organic fertilizers, labor protection
supplies, beverages, and agricultural products). Additionally, the pricing for the Procured
Products takes into consideration of the cost and profit margin of the Procured Products while
the pricing for the Procured Services considers the fees of prevailing market rates for similar
services provided by Independent Third Parties.
INTERNAL CONTROL PROCEDURES ADOPTED BY THE COMPANY IN RESPECT
OF THE IMPLEMENTATION OF CONTINUING CONNECTED TRANSACTION
FRAMEWORK AGREEMENTS
Our Group adopts the following internal control measures to ensure that the transactions
will be carried out in accordance with the terms of the Procurement of Products and Goods
Framework Agreement and Procurement of Services Framework Agreement, including the
pricing policies, and in compliance with all the applicable requirements under the Listing
Rules:
 We have adopted a connected transactions management policy to ensure that
connected transactions will be conducted fairly, on normal commercial terms, and in
the interests of our Company and our Shareholders as a whole.
 Prior to the execution of the underlying agreements under the continuing connected
transactions, the operation department of the relevant business sector of our Group
will thoroughly understand the true condition of the transaction target and the
integrity record, credit status, and performance capability of the counterparty;
carefully assess the necessity and rationality of the transaction, the sufficiency of the
CONNECTED TRANSACTIONS
– 318 –


--- page 330 ---
pricing basis, the fairness of the transaction price, and the impact on our Company;
pay special attention to issues such as unclear ownership of the transaction target,
uncertain performance capability of the counterparty, and unclear transaction price;
and where necessary, appoint professional intermediaries to assess or audit the value
of the transaction.
 The finance team of our Group will regularly examine the pricing of the transactions
under the continuing connected transactions to ensure that those transactions are
conducted in accordance with the pricing terms therein.
 Our Company will provide information and supporting documents to the
Independent Non-executive Directors and the auditors in order for them to conduct
an annual review of the continuing connected transactions entered into by our
Company. Our Independent Non-executive Directors and auditors will conduct an
annual review of the continuing connected transactions under the framework
agreements and provide annual confirmations in accordance with Rules 14A.55 and
14A.56 of the Listing Rules.
W AIVER
In respect of the transactions of Procurement of Products and Goods, Procurement of
Services, and Procurement of Financial Services as described above, we have applied for, and
the Stock Exchange has granted us, a waiver from strict compliance with the announcement
requirements under the Listing Rules pursuant to Rule 14A.105 of the Listing Rules.
DIRECTORS’ CONFIRMATION
Our Directors (including Independent Non-executive Directors) are of the view that: (i)
the continuing connected transactions set out above have been and will be entered into in our
ordinary and usual course of business on normal commercial terms or better, on terms that are
fair and reasonable, and in the interests of our Company and our Shareholders as a whole, and
(ii) the proposed annual caps for these transactions are fair and reasonable and in the interests
of our Company and the Shareholders as a whole.
JOINT SPONSORS’ CONFIRMATION
The Joint Sponsors have (i) reviewed the relevant documents and information provided
by our Company in relation to the above partially-exempt continuing connected transactions;
(ii) obtained necessary representations and confirmations from our Company and the Directors,
and (iii) participated in the due diligence and discussions with the management of our Group.
Based on the above, the Joint Sponsors are of the view that the aforesaid partially-exempt
continuing connected transactions, for which waivers have been sought, have been entered into
in the ordinary and usual course of our business on normal commercial terms or better terms,
are fair and reasonable and in the interests of our Company and our Shareholders as a whole,
and that the proposed annual caps in respect of the partially-exempt continuing connected
transactions are fair and reasonable and in the interests of our Company and our Shareholders
as a whole.
CONNECTED TRANSACTIONS
– 319 –


--- page 331 ---
So far as our Directors are aware, as of the Latest Practicable Date and immediately
following the completion of the Global Offering, assuming the Over-allotment Option is not
exercised, each of the following persons will have an interest or short position (as applicable)
in our Shares or underlying Shares which would be required to be disclosed to our Company
and the Stock Exchange under the provisions of Divisions 2 and 3 of Part XV of the SFO, or,
directly or indirectly, be interested in 10% or more of the issued voting shares of our Company:
Name of
substantial
Shareholder Nature of interest
Description
of Shares
Number of
Shares directly
or indirectly
held (excluding
A Shares
issuable upon
the conversion of
the outstanding
Convertible
Bonds)
Approximate
percentage of
interest in the
total issued
share capital of
our Company as
of the Latest
Practicable Date
(excluding A
Shares issuable
upon the
conversion of the
outstanding
Convertible
Bonds)
Approximate
percentage of
interest in the
total issued
share capital of
our Company
after the Global
Offering
(excluding A
Shares issuable
upon the
conversion of the
outstanding
Convertible
Bonds)
Number of
Shares held
immediately
after the Global
Offering
(assuming that
the Convertible
Bonds are fully
converted at the
price of
RMB44.26)
Approximate
percentage of
shareholding in
the total Shares
of our Company
immediately
after the Global
Offering
(assuming that
the Convertible
Notes are fully
converted at the
price of
RMB44.26)
Mr. Qin
Yinglin /H1118/H1118/H1118
Beneficial owner (1) A Shares 2,086,287,906 38.19% 36.37% 2,101,406,004 35.30%
Interest in
controlled
corporation
(2)(3)
A Shares 918,348,676 16.81% 16.01% 940,616,930 15.80%
Interest of
spouse (2)
A Shares 64,445,240 1.18% 1.12% 67,087,262 1.13%
Ms. Qian Ying /H1118Beneficial owner (4) A Shares 64,445,240 1.18% 1.12% 67,087,262 1.13%
Interest in
controlled
corporation
(2)(3)
A Shares 918,348,676 16.81% 16.01% 940,616,930 15.80%
Interest of
spouse (2)
A Shares 2,086,287,906 38.19% 36.37% 2,101,406,004 35.30%
Muyuan
Group. /H1118/H1118/H1118
Beneficial
owner (3)(5)
A Shares 848,762,153 15.54% 14.80% 871,030,407 14.63%
Interest in
controlled
corporation
(3)
A Shares 69,586,523 1.27% 1.21% 69,586,523 1.17%
SUBSTANTIAL SHAREHOLDERS
– 320 –


--- page 332 ---
Notes:
(1) On December 13, 2017 and December 19, 2017, Mr. Qin Yinglin and Muyuan Group entered into a voting
rights entrustment agreement and its supplementary agreement (collectively, the “ Agreements ”). Under the
Agreements, Mr. Qin Yinglin entrusted to Muyuan Group all shareholder voting rights, director nomination
rights, and other shareholder rights (excluding dividend rights and other shareholder property rights) attached
to 448,667,502 A Shares held by him, representing 1,922,091,579 A Shares as of the Latest Practicable Date
due to capital increases of the Company. As of the Latest Practicable Date, Mr. Qin Yinglin held Convertible
Bonds with an outstanding principal amount of RMB669,127,000. In the event of full conversion of
Convertible Bonds, Mr. Qin Yinglin shall hold an aggregate of 2,101,406,004 A Shares, assuming a conversion
price of RMB44.26 per Share.
(2) As of the Latest Practicable Date, Muyuan Group was held by Mr. Qin Yinglin as to 85% and by Ms. Qian Ying
as to 15%. Mr. Qin Yinglin and Ms. Qian Ying are spouses. As such, Mr. Qin Yinglin will be deemed to be
interested in the A Shares held by Muyuan Group and each of Mr. Qin Yinglin and Ms. Qian Ying is deemed
to be interested in the interest of each other for purpose of Part XV of the SFO.
(3) Interest in controlled corporation also includes the 69,586,523 A Shares repurchased by our Company as
treasury shares as of the Latest Practicable Date.
(4) As of the Latest Practicable Date, Ms. Qian Ying held the Convertible Bonds with an outstanding principal
amount of RMB116,935,900. In the event of full conversion of Convertible Bonds, Ms. Qian Ying shall hold
an aggregate of 67,087,262 A Shares, assuming a conversion price of RMB44.26 per Share.
(5) Muyuan Group held Convertible Bonds with an outstanding principal amount of RMB985,592,900. In the
event of full conversion of Convertible Bonds, Muyuan Group shall hold an aggregate of 871,030,407 A
Shares, assuming a conversion price of RMB44.26 per Share.
Save as disclosed above and in Appendix VI to this prospectus, our Directors are not
aware of any person who will, immediately following the Global Offering (and the offering of
any additional H Shares pursuant to the Over-allotment Option), have an interest or short
position in the Shares or underlying Shares of our Company which would be required to be
disclosed to our Company and the Stock Exchange under the provisions of Divisions 2 and 3
of Part XV of the SFO, or will, directly or indirectly, be interested in 10% or more of the issued
voting shares of any other members of our Group.
SUBSTANTIAL SHAREHOLDERS
– 321 –


--- page 333 ---
BEFORE THE GLOBAL OFFERING
As of the Latest Practicable Date, the total issued share capital of our Company was
RMB5,462,771,266, comprising 5,462,771,266 A Shares of nominal value RMB1.00 each, all
of which are listed on the Shenzhen Stock Exchange.
Description of Shares Number of Shares
Percentage of
issued share
capital
A Shares* /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185,462,771,266 100.00%
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185,462,771,266 100.00%
Note:
* Including 69,586,523 A Shares being held as treasury Shares repurchased by our Company pursuant to
the repurchase mandates approved by Shareholders, accounting for approximately 1.27% of the total
number of A Shares in issue as of the Latest Practicable Date.
UPON COMPLETION OF THE GLOBAL OFFERING
Immediately following completion of the Global Offering, assuming that the Over-
allotment Option is not exercised and excluding A Shares issuable upon the conversion of the
outstanding Convertible Bonds, the entire share capital of our Company would be as follows:
Description of Shares Number of Shares
Percentage of
issued share
capital
A Shares* /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185,462,771,266 95.22%
H Shares issued pursuant to the Global Offering /H1118/H1118273,951,400 4.78%
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185,736,722,666 100.00%
SHARE CAPITAL
– 322 –


--- page 334 ---
Immediately following completion of the Global Offering, assuming that the Over-
allotment Option is fully exercised, and excluding A Shares issuable upon the conversion of the
outstanding Convertible Bonds, the entire share capital of our Company would be as follows:
Description of Shares Number of Shares
Percentage of
issued share
capital
A Shares* /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185,462,771,266 94.55%
H Shares issued pursuant to the Global Offering /H1118/H1118315,044,100 5.45%
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185,777,815,366 100.00%
Note:
* Including 69,586,523 A Shares being held as treasury Shares repurchased by our Company pursuant to
the repurchase mandates approved by Shareholders, accounting for approximately 1.27% of the total
number of A Shares in issue as of the Latest Practicable Date.
OUR SHARES
Our H Shares in issue upon completion of the Global Offering and our A Shares are
ordinary shares in the share capital of our Company and are considered as one class of Shares.
However, apart from qualified domestic institutional investors and persons who are entitled to
hold our H Shares pursuant to relevant PRC laws and regulations or upon approval of any
competent authority, or (if our H Shares are eligible securities for that purpose) through
Shenzhen-Hong Kong Stock Connect or Shanghai-Hong Kong Stock Connect pursuant to
relevant PRC laws and regulations, our H Shares may not be subscribed by or traded between
legal or natural persons of the PRC.
Shenzhen-Hong Kong Stock Connect has established a stock connect mechanism between
the PRC and Hong Kong. Our A Shares can be subscribed for and traded by PRC investors,
qualified foreign institutional investors or qualified foreign strategic investors and must be
traded in RMB. As our A Shares are eligible securities under the Northbound Trading Link,
they can also be subscribed for and traded by Hong Kong and other overseas investors pursuant
to the rules and limits of Shenzhen-Hong Kong Stock Connect. If our H Shares are eligible
securities under the Southbound Trading Link, they can also be subscribed for and traded by
PRC investors in accordance with the rules and limits of Shanghai-Hong Kong Stock Connect
or Shenzhen-Hong Kong Stock Connect.
SHARE CAPITAL
– 323 –


--- page 335 ---
RANKING
Our H Shares and our A Shares are regarded as one class of Shares under our Articles of
Association and will rank pari passu with each other in all other respects and, in particular, will
rank equally for all dividends or distributions declared, paid or made after the date of this
prospectus. All dividends in respect of our H Shares are to be paid by us in Hong Kong dollars
whereas all dividends in respect of our A Shares are to be paid by us in RMB. In addition to
cash, dividends may also be distributed in the form of Shares. Holders of our H Shares will
receive share dividends in the form of H Shares, and holders of our A Shares will receive share
dividends in the form of A Shares.
NO CONVERSION OF OUR A SHARES INTO H SHARES FOR LISTING AND
TRADING ON THE HONG KONG STOCK EXCHANGE
Our A Shares and our H Shares are generally neither interchangeable nor fungible, and the
market prices of our A Shares and our H Shares may be different after the Global Offering. The
Guidelines on Application for “Full Circulation” of Domestic Unlisted Shares of H-share
Companies ( H΅͡ሗ“ஷ”ˏ) announced by the CSRC are
not applicable to companies dual listed in the PRC and on the Hong Kong Stock Exchange. As
of the Latest Practicable Date, there were no relevant rules or guidelines from the CSRC
providing that A shares holders may convert A shares held by them into H shares for listing and
trading on the Hong Kong Stock Exchange.
APPROV AL FROM HOLDERS OF A SHARES REGARDING THE GLOBAL
OFFERING
We have obtained approval from our holders of A Shares to issue H Shares and seek the
listing of H Shares on the Hong Kong Stock Exchange. Such approval was obtained at the
general meeting of our Company held on May 16, 2025 upon, among other things, the
following major terms:
(i) Size of the offer
The number of H Shares to be offered under the Global Offering shall not exceed 8% of
the total share capital of our Company as enlarged by the H Shares to be issued pursuant to the
Global Offering (before the exercise of the Over-allotment Option). The number of H Shares
to be issued pursuant to the exercise of the Over-allotment Option shall not exceed 15% of the
total number of H Shares to be offered pursuant to the Global Offering.
(ii) Method of offering
The method of offering shall be by way of a public offer for subscription in Hong Kong
and an international offering to institutional and professional investors.
SHARE CAPITAL
– 324 –


--- page 336 ---
(iii) Target investors
The H Shares shall be issued to overseas professional organizations, institutions
individual investors and other eligible investors.
(iv) Price determination basis
The issue price of the H Shares will be determined considering the interests of existing
shareholders, investor acceptance, domestic and international capital markets, and issuance
risks, based on international practices and order demand and book-building results.
(v) Valid period
The issue of H Shares and listing of H Shares on the Hong Kong Stock Exchange shall
be completed within 24 months from the date when the Shareholders’ meeting was held on May
16, 2025. If the Company obtains the filing or approval documents from relevant regulatory
authorities (including the CSRC, SFC and the Stock Exchange) for the H-share listing within
the valid period, the resolution’s valid period will automatically extend to the later of the
completion date of the H-share listing, the completion date of the H-share issuance under the
exercise of the Over-allotment Option (if any), or the date of completion of the aforementioned
authorized matters.
There is no other approved offering plan for any other shares except for the Global
Offering.
SHAREHOLDERS’ GENERAL MEETINGS
For details of the circumstance under which our Shareholders’ general meeting is
required, see “Appendix V . Summary of the Articles of Association — “Shareholders and
Shareholders’ General Meetings.”
SHARE CAPITAL
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THE CORNERSTONE INVESTMENTS
We have entered into cornerstone investment agreements (each a “ Cornerstone
Investment Agreement ”, and together the “ Cornerstone Investment Agreements ”) with the
cornerstone investors set out below (each a “ Cornerstone Investor ”, and together the
“Cornerstone Investors ”), pursuant to which the Cornerstone Investors have agreed to,
subject to certain conditions, subscribe for such number of Offer Shares (rounded down to the
nearest whole board lot of 100 H Shares) which may be purchased at the Offer Price with an
aggregate amount of approximately HK$5,341.9 million, calculated based on the exchange rate
set out in the section headed “Information about this Prospectus and the Global Offering —
Exchange Rate Conversion” in this prospectus (exclusive of brokerage, SFC transaction levy,
AFRC transaction levy and Stock Exchange trading fee) (the “ Cornerstone Investment ”).
Based on the Offer Price of HK$39.00 per Offer Share, being the maximum Offer Price,
the total number of Offer Shares to be subscribed for by the Cornerstone Investors would be
136,972,800 H Shares, representing approximately (i) 50.00% of the H Shares offered pursuant
to the Global Offering (assuming the Over-allotment Option is not exercised); (ii) 2.39% of our
total issued share capital immediately upon completion of the Global Offering (assuming the
Over-allotment Option is not exercised); and (iii) 2.37% of our total issued share capital
immediately upon completion of the Global Offering and the full exercise of the Over-
allotment Option.
The Company is of the view that, (i) the Cornerstone Investment will ensure a reasonable
size of solid commitment at the beginning of the marketing period of the Global Offering and
will provide confidence to the market; and (ii) the Cornerstone Investment demonstrates our
Cornerstone Investors’ confidence in the Company and its business prospect and it will help
raise the profile of the Company. The Company became acquainted with each of the
Cornerstone Investors through the business network of the Group, the Overall Coordinators or
the other CMIs.
The Cornerstone Investment will form part of the International Offering, and save as
otherwise obtained consent from the Stock Exchange, the Cornerstone Investors and their
respective close associates will not subscribe for any Offer Shares under the Global Offering
other than pursuant to the Cornerstone Investment Agreements. The Offer Shares to be
subscribed for by the Cornerstone Investors will rank pari passu in all respects with the fully
paid H Shares in issue following the completion of the Global Offering and to be listed on the
Stock Exchange. The Offer Shares to be subscribed for by the Cornerstone Investors will be
counted towards the public float of the Company under Rule 19A.13A(2) of the Listing Rules.
Immediately following the completion of the Global Offering, (i) none of the Cornerstone
Investors will become a substantial shareholder of the Company; (ii) none of the Cornerstone
Investors will have any Board representation in the Company solely by virtue of its cornerstone
investment, and (iii) equity interests in the Company being beneficially owned by the three
largest public Shareholders will be less than 50% for the purpose of Rule 8.08(3) of the Listing
Rules.
CORNERSTONE INVESTORS
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--- page 338 ---
Among the Cornerstone Investors, FIL Investment, Perseverance Asset Management,
Shanghai Gaoyi and HTCI (in connection with Gaoyi OTC Swaps), Ping An Life Insurance,
Dajia Life, UBS AM Singapore, Midea Development Holding BVI and Millennium are existing
minority Shareholders of the Company or their close associates (in the case of Millennium, its
existing interest in the Company is held through OTC swaps), with each of such Cornerstone
Investors (and/or their close associates) respectively holding less than 1% of the total issued
share capital of the Company as of the Latest Practicable Date. The Stock Exchange has
granted a waiver from strict compliance with the requirements under Rule 10.04 and consent
under Paragraph 1C(2) of Appendix F1 to the Listing Rules to permit H Shares in the
International Offering to be placed to certain existing minority Shareholders. For further
details, please refer to “Waivers and Exemptions — Allocation of H Shares to Existing
Minority Shareholders and/or their Close Associates”.
To the best knowledge of the Company, (i) each of the Cornerstone Investors is an
independent third party; (ii) none of the Cornerstone Investors is accustomed to taking
instructions from the Company, the Directors, chief executive of the Company, the Controlling
Shareholders, substantial Shareholders or existing Shareholders or any of its subsidiaries or
their respective close associates in relation to the acquisition, disposal, voting, or other
disposition of H Shares registered in its name or otherwise held by it; and (iii) none of the
subscription for the relevant Offer Shares by the Cornerstone Investors is financed by the
Company, the Directors, chief executive of the Company, the Controlling Shareholders,
substantial Shareholders or existing Shareholders or any of its subsidiaries or their respective
close associates for the purpose of subscription of the Offer Shares.
To the best knowledge of the Company and as confirmed by each of the Cornerstone
Investors, they made their own independent decisions to enter into the Cornerstone Investment
Agreements, and their subscriptions under the Cornerstone Investment would be financed by
their own internal resources or (in the case of the Cornerstone Investor which is funds or
investment manager) the assets managed for its investors. Save for Charoen Pokphand Foods,
Wilmar, RBC GAM, Huatai Capital Investment Limited, Ping An Life Insurance, and UBS AM
Singapore, none of the Cornerstone Investors or their shareholder(s) are listed on any stock
exchanges. The Cornerstone Investors have also confirmed that all necessary approvals have
been obtained with respect to the Cornerstone Investment and that no specific approval from
any stock exchange (if relevant) or their shareholders is required for the Cornerstone
Investment. Other than a guaranteed allocation of the relevant Offer Shares at the final Offer
Price, the Cornerstone Investors do not have any preferential rights in the Cornerstone
Investment Agreements compared with other public Shareholders. Other than the Cornerstone
Investment Agreements, as confirmed by each of the Cornerstone Investors, there are no side
agreements or arrangements between us and the Cornerstone Investors or any benefit, direct or
indirect, conferred on the Cornerstone Investors by virtue of or in relation to the Listing, other
than a guaranteed allocation of the relevant Offer Shares at the Offer Price.
CORNERSTONE INVESTORS
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The total number of Offer Shares to be subscribed for by the Cornerstone Investors under
the Cornerstone Investment may be affected by reallocation of the Offer Shares between the
International Offering and the Hong Kong Public Offering in the event of over-subscription
under the Hong Kong Public Offering, as described in the paragraphs headed “Structure of the
Global Offering — The Hong Kong Public Offering — Reallocation” in this prospectus. The
number of Offer Shares to be acquired by each Cornerstone Investor may be reduced on a pro
rata basis in accordance with the terms of the Cornerstone Investment Agreements to satisfy the
public demands under the Hong Kong Public Offering, after taking into account the
requirements under Appendix F1 to the Listing Rules as well as the discretion of the Overall
Coordinators (for themselves and on behalf of the International Underwriters) to exercise the
Over-allotment Option. Further, the Cornerstone Investors have agreed that in the event (1) that
the requirements under Rule 8.08(3) of the Listing Rules, which stipulates that no more than
50% of the Shares in public hands can be beneficially owned by the three largest public
shareholders of the Company, or (2) that the minimum allocation to investors in the placing
tranche (other than Cornerstone Investors) under paragraph 3.2 of Practice Note 18 to the
Listing Rules, may not be complied with on the Listing Date, the number of the H Shares to
be subscribed for by the Cornerstone Investors may be adjusted to ensure compliance with such
rules. Details of the actual number of Offer Shares to be allocated to each of the Cornerstone
Investors will be disclosed in the allotment results announcement to be issued by the Company
on or around Thursday, February 5, 2026.
Pursuant to the Cornerstone Investment Agreements, save for Charoen Pokphand Foods,
Sinochem HK, FIL Investment, RBC GAM, Perseverance Asset Management and UBS AM
Singapore, the Overall Coordinators (for themselves and on behalf of the International
Underwriters) has the discretion to effect a delayed delivery of the Offer Shares to be
subscribed for by the Cornerstone Investors on a date later than the Listing Date, subject to the
conditions contained therein. Such delayed delivery arrangement is in place to facilitate the
over-allocation in the International Offering. There will be no delayed delivery if there is no
over-allocation in the International Offering. Where delayed delivery takes place, each of the
Cornerstone Investor has agreed that it shall nevertheless pay for the relevant Offer Shares
before the Listing. As such, there will be no deferred settlement of the investment amount for
the Offer Shares to be subscribed for by the Cornerstone Investors pursuant to the Cornerstone
Investment Agreement.
CORNERSTONE INVESTORS
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THE CORNERSTONE INVESTORS
The table below sets out details of the Cornerstone Investment:
Based on the Offer Price of HK$39.00, being the maximum Offer Price
Cornerstone Investor
Subscription
amount (1)
Number of
Offer Shares
to be
acquired (2)
Assuming the
Over-Allotment Option
is not exercised
Assuming the
Over-Allotment Option
is fully exercised
Approximate
%o ft h e
Offer Shares
Approximate
%o ft h e
issued share
capital
Approximate
%o ft h e
Offer Shares
Approximate
%o ft h e
issued share
capital
Charoen Pokphand Foods /H1118 US$200 million 39,992,200 14.60% 0.70% 12.69% 0.69%
Wilmar /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118US$70 million 13,997,200 5.11% 0.24% 4.44% 0.24%
– Wii Pte. Ltd. /H1118/H1118/H1118/H1118/H1118/H1118/H1118US$50 million 9,998,000 3.65% 0.17% 3.17% 0.17%
– HPRY /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118US$20 million 3,999,200 1.46% 0.07% 1.27% 0.07%
Sinochem HK /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118US$65 million 12,997,400 4.74% 0.23% 4.13% 0.22%
Hong Kong Henan Agri
International /H1118/H1118/H1118/H1118/H1118/H1118/H1118US$50 million 9,998,000 3.65% 0.17% 3.17% 0.17%
FIL Investment /H1118/H1118/H1118/H1118/H1118/H1118/H1118US$80 million 15,996,800 5.84% 0.28% 5.08% 0.28%
RBC GAM /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118US$30 million 5,998,800 2.19% 0.10% 1.90% 0.10%
Perseverance Asset
Management /H1118/H1118/H1118/H1118/H1118/H1118/H1118US$32.6 million 6,518,700 2.38% 0.11% 2.07% 0.11%
Shanghai Gaoyi and HTCI
(in connection with
Gaoyi OTC Swaps) /H1118/H1118/H1118/H1118US$27.4 million 5,478,900 2.00% 0.10% 1.74% 0.09%
Ping An Life Insurance /H1118/H1118/H1118 US$30 million 5,998,800 2.19% 0.10% 1.90% 0.10%
Dajia Life /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118US$30 million 5,998,800 2.19% 0.10% 1.90% 0.10%
UBS AM Singapore /H1118/H1118/H1118/H1118/H1118US$20 million 3,999,200 1.46% 0.07% 1.27% 0.07%
Midea Development
Holding BVI /H1118/H1118/H1118/H1118/H1118/H1118/H1118US$30 million 5,998,800 2.19% 0.10% 1.90% 0.10%
Millennium /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118US$10 million 1,999,600 0.73% 0.03% 0.63% 0.03%
Jane Street /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118US$10 million 1,999,600 0.73% 0.03% 0.63% 0.03%
Total/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118US$685 million 136,972,800 50.00% 2.39% 43.48% 2.37%
(1) Calculated based on the exchange rate set out in the section headed “Information about this Prospectus and the
Global Offering — Exchange Rate Conversion” in this prospectus. The actual investment amount may vary due
to the exchange rate prescribed in the relevant Cornerstone Investment Agreement.
(2) Rounded down to the nearest whole board lot of 100 H Shares.
(3) Assuming no other changes are made to the issued share capital of our Company between the Latest Practicable
Date and the date of exercise of Over-allotment Option.
The information about our Cornerstone Investors set forth below has been provided by the
Cornerstone Investors in connection with the Cornerstone Investment.
CORNERSTONE INVESTORS
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Charoen Pokphand Foods
Charoen Pokphand Foods Public Company Limited (“ CPF”) is a company listed on The
Stock Exchange of Thailand (stock code: CPF). CPF and its subsidiaries, associates and joint
ventures operate a fully integrated agro-industrial and food businesses. CPF Group has
production bases in 17 countries including Thailand, Vietnam, China (including Taiwan), the
UK, the US, Russia, Cambodia, India, the Philippines, Türkiye, Malaysia, Laos, Sri Lanka,
Belgium, along with joint ventures in Poland, Canada and Brazil. Additionally, CPF Group
distributes meat and food products to over 50 countries across 5 continents.
This investment is made in view of the Company’s future growth potential and the
possible business opportunities that may arise.
Wilmar
Wii Pte Ltd is a wholly-owned subsidiary and also the Financial Treasury Centre of
Wilmar International Limited (stock code: F34.SI) listed and trading on the Singapore
Exchange (“ Wilmar ”). Wilmar, founded in 1991 and headquartered in Singapore, is today
Asia’s leading agribusiness group. Wilmar is ranked amongst the largest listed companies by
market capitalisation on the Singapore Exchange.
At the core of Wilmar’s strategy is an integrated agribusiness model that encompasses the
entire value chain of the agricultural commodity business, from origination, to processing,
branding, merchandising and distribution of a wide range of edible food and industrial
products. The Group’s business activities include oil palm cultivation, oilseed crushing, edible
oils refining, flour and rice milling, sugar milling and refining, manufacturing of consumer
products, ready-to-eat meals, central kitchen products, specialty fats, oleochemicals, biodiesel
and fertilisers as well as food park operations. It has over 1,000 manufacturing plants and an
extensive distribution network covering China, India, Indonesia and some 50 other countries
and regions. Through scale, integration and the logistical advantages of its business model,
Wilmar is able to extract margins at every step of the value chain, thereby reaping operational
synergies and cost efficiencies.
Supported by a multinational workforce of about 100,000 people, Wilmar embraces
sustainability in its global operations, supply chain and communities.
HPRY Holdings Limited (“ HPRY”) is an investment vehicle wholly-owned by Mr. Kuok
Khoon Hong. Mr. Kuok is the chairman and chief executive officer of the board of directors
of Wilmar and a substantial shareholder of Wilmar.
Yihai Kerry Arawana Holdings Co., Ltd. (300999.SZ), an affiliate of Wilmar, has been a
raw materials and key ingredient supplier of the Group since 2016, with such transactions
having been entered into on normal commercial terms and arm’s length basis.
CORNERSTONE INVESTORS
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Sinochem HK
Sinochem Hong Kong (Group) Company Limited (“ Sinochem HK ”) was incorporated in
Hong Kong in 1989, with its ultimate controlling company being Sinochem Holdings Co., Ltd.
(“Sinochem Holdings ”), which in turn is under the supervision of the State-owned Assets
Supervision and Administration Commission of the State Council of the People’s Republic of
China ( ʕശɛ͏΍ձ਷਷ਕ৫). As Sinochem Holdings’ wholly-owned overseas investment
holding platform, Sinochem HK primarily engages in offshore financing, equity investment,
global cash concentration management and asset management.
Sinochem Holdings was established through the joint restructuring of Sinochem Group
Co., Ltd. and China National Chemical Corporation Ltd. on May 8, 2021. Sinochem Holdings
operates across eight major areas: life sciences, materials sciences, petrochemicals,
environmental science, rubber and tires, machinery and equipment, city operations and
industrial finance. It has become one of the world’s leading chemical conglomerates and has
consistently ranked among the Fortune Global 500 in recent years.
The cornerstone investment will further strengthen the business relationship and provide
the opportunity for synergies between the Company and Sinochem Group.
Hong Kong Henan Agri International
Hong Kong Henan Agri International Co., Limited (“ Hong Kong Henan Agri
International ”) is a limited liability company incorporated in Hong Kong, primarily engaged
in investment holding. Hong Kong Henan Agri International Co., Limited is wholly owned by
Henan Agricultural Investment Capital Co., Ltd (ʮ̡). Henan Agricultural
Investment Capital Co., Ltd is a wholly owned subsidiary of Henan Agricultural Investment
Group Co., Ltd. (ʮ̡)( “ Henan Agricultural Group ”). Henan
Agricultural Group is controlled by the State-owned Assets Supervision and Administration
Commission of Henan Provincial People’s Government (਷Ϟ༟ପ္ຖ၍ଣ։
ึ).
Henan Agricultural Group has established a broad set of relationships with multiple major
agricultural companies, including the Group. The cornerstone investment will further
strengthen the business relationship between the Company and Henan Agricultural Group.
RBC GAM
RBC Asia Pacific ex-Japan Equity Fund, RBC China Equity Fund, RBC China Equity
Fund (40 Act) and RP — Fonds Institutionnel — Actions marchés émergents are discretionary
funds sub-advised by RBC Global Asset Management (Asia) Limited (the cornerstone
investor), which is a member company of RBC Global Asset Management (“ RBC GAM ”), the
asset management division of Royal Bank of Canada. RBC GAM is a provider of global
investment management services and solutions to institutional, high-net-worth and individual
investors through separate accounts, pooled funds, mutual funds, hedge funds, exchange-traded
CORNERSTONE INVESTORS
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--- page 343 ---
funds and specialty investment strategies. As of September 30, 2025, the RBC GAM group of
companies manage approximately US$560 billion in assets under management and have
approximately 1,700 employees located across Canada, the United States, Europe and Asia.
RBC Global Asset Management (U.S.) Inc., a wholly owned subsidiary of Royal Bank of
Canada, is the sole beneficial owner of 100% of the outstanding shares of the RBC China
Equity Fund (40 Act). To the best of its knowledge, no single ultimate beneficial owner is
holding 30% or more interests in (i) RBC Asia Pacific ex-Japan Equity Fund, or (ii) RBC China
Equity Fund, or (iii) RP — Fonds Institutionnel — Actions marchés émergents.
FIL Investment
FIL Investment Management (Hong Kong) Limited (“ FIL Investment ”) has entered into
a Cornerstone Investment Agreement with the Company and the Joint Sponsors in the capacity
as fiduciary and agent for the following entities: Fidelity Asian V alues PLC, Fidelity China
Focus Open Mother Fund, Fidelity China Special Situations PLC, a sub-fund of Fidelity Funds
— Asian Smaller Companies, a sub-fund of Fidelity Funds — China Focus, a sub-fund of
Fidelity Funds — China Consumer, a sub-fund of Fidelity Funds — Emerging Asia, a sub-fund
of Fidelity Funds — Greater China II, a sub-fund of Fidelity Funds — Greater China, a
sub-fund of Fidelity Funds — China Innovation, a sub-fund of Fidelity Funds — Pacific,
Fidelity Australia: Fidelity China Fund, Fidelity China Fund, a sub-fund of Fidelity Global
Investment Fund — Hong Kong Equity Fund and certain other third-party funds and accounts
all of which are advised or sub-advised on a discretionary basis by FIL Investment
Management (Hong Kong) Limited and its related group of companies collectively known as
Fidelity International. Each of the above mentioned funds and accounts are independent third
parties of the Company.
Perseverance Asset Management
Perseverance Asset Management International (Singapore) Pte. Ltd. (“ Perseverance
Asset Management ”) acts as the investment advisor or investment manager on a discretionary
basis of no more than six investment funds and/or separated managed accounts (collectively the
“Perseverance Funds ”). No single ultimate beneficial owner holds 30% or more interest in
each of the Perseverance Funds. Perseverance Asset Management is a private limited company
incorporated in Singapore in October 2018, and holds a Capital Markets Services License for
fund management with Monetary Authority of Singapore. Perseverance Asset Management is
wholly owned by Perseverance Asset Management International, which is principally engaged
in investment management and investment advisory services and an Independent Third Party.
Certain investments funds for which Perseverance Asset Management acts as the investment
advisor or investment manager invested in Zijin Gold International Company Limited (stock
code: 2259.HK), Contemporary Amperex Technology Co., Limited (stock code: 3750.HK) and
Acotec Scientific Holdings Limited (stock code: 6669.HK) as cornerstone investor.
Perseverance Asset Management is an affiliate of Shanghai Gaoyi (as defined below).
Perseverance Asset Management is entering into the cornerstone investment agreement with
the Company in its capacity as an investment advisor or investment manager and on behalf of
the Perseverance Funds.
CORNERSTONE INVESTORS
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Shanghai Gaoyi and Huatai Capital Investment Limited (in connection with Gaoyi OTC
Swaps)
Huatai Capital Investment Limited (“ HTCI ”) will act as the single counterparty of a
back-to-back total return swap transaction (the “ Huatai Back-to-back TRS ”) to be entered
into by HTCI and Huatai Securities Co., Ltd. (“ Huatai Securities ”) (stock code: 6886.HK) in
connection with a total return swap transaction (the “ Huatai Client TRS ”) fully funded by the
ultimate clients (the “ Ultimate Clients (Gaoyi) ”), by which HTCI will ultimately pass the full
economic return and loss of the Offer Shares allocated to HTCI to the Ultimate Clients (Gaoyi).
HTCI will hold the Offer Shares on a non-discretionary basis to hedge the Huatai Back-to-back
TRS in connection with the Huatai Client TRS, and will pass on the full economic return and
loss of the Offer Shares ultimately to the Ultimate Clients (Gaoyi) through the Huatai
Back-to-back TRS and the Huatai Client TRS, subject to customary fees and commissions.
HTCI will not take part in any economic return or bear any economic loss in relation to the
Offer Shares, save as customary fees and commission. The Ultimate Clients (Gaoyi) may, after
expiration of the lock-up period beginning from the date of the cornerstone investment
agreement entered into among HTCI, the Company, the Joint Sponsors and the Overall
Coordinators, and ending on the date which is six months from the Listing Date, request to
early terminate the Huatai Client TRS at their own discretion. Upon the final maturity or early
termination of the Huatai Client TRS by the Ultimate Clients (Gaoyi), HTCI will accordingly
terminate the Huatai Back-to-back TRS and dispose of the Offer Shares on the secondary
market and the Ultimate Clients (Gaoyi) will receive a final settlement amount of the Huatai
Client TRS in cash in accordance with the terms and conditions of the Huatai Back-to-back
TRS and the Huatai Client TRS. HTCI will not exercise the voting right of the Offer Shares
during the tenor of the Huatai Back-to-back TRS.
To the best of HTCI’s knowledge after having made all reasonable inquiries, each of the
Ultimate Clients (Gaoyi) is an independent third party of (i) the Company, the connected
persons or associates thereof, and (ii) HTCI and the companies which are members of the same
group of Huatai Financial Holdings (Hong Kong) Limited.
During the life of the Huatai Back-to-back TRS and the Huatai Client TRS, HTCI may
continue to hold the Offer Shares in its custodian account, or to hold some or all of the Offer
Shares in a prime brokerage account for stock borrowing purpose, which is consistent with
market practice to lower its finance cost, provided that the economic interests are ultimately
passed to the Ultimate Clients (Gaoyi).
The Ultimate Clients (Gaoyi) are certain investment funds managed by Shanghai Gaoyi
Asset Management Partnership (Limited Partnership) ( ɪऎ৷ᆇ༟ପ၍ଣΥྫΆุ(Υྫ))
(“Shanghai Gaoyi ”) on a discretionary basis. Shanghai Gaoyi is a limited partnership
established in the PRC, which is engaged in asset management and investment management
with a primary focus on investments in secondary market. Certain investment funds managed
by Shanghai Gaoyi entered into delta-one OTC swap transactions in connection with the
cornerstone investment in Zijin Gold International Company Limited (stock code: 2259.HK),
Nanjing Leads Biolabs Co., Ltd. (stock code: 9887.HK) and Contemporary Amperex
CORNERSTONE INVESTORS
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Technology Co., Limited (stock code: 3750.HK) and bear all economic return and loss.
Shanghai Gaoyi holds the Qualification of Private Investment Fund Manager (၍
ࣸaccredited by the Asset Management Association of China (ุ՘
ึ). The managing partner of Shanghai Gaoyi is Shanghai Gaoyi Investment Management Co,
Ltd. (ʮ̡)( “ Gaoyi Investment ”). As confirmed by Shanghai Gaoyi,
there is no single ultimate beneficial owner holding 30% or more interests in respect of each
of the Ultimate Clients (Gaoyi).
Ping An Life Insurance
Ping An of China Asset Management (Hong Kong) Company Limited ( ʕ਷̻τ༟ପ၍
ଣ(ಥ)ʮ̡)( “ Ping An Asset HK ”), established in May 2006, is an indirect wholly-
owned subsidiary and the major entity responsible for the overseas investment management
business of Ping An Insurance (Group) Company of China, Ltd. (“ Ping An Group ”), a limited
company incorporated in the PRC whose shares are listed on the Hong Kong Stock Exchange
(Stock Code: 2318) and the Shanghai Stock Exchange (Stock Code: 601318). Ping An Asset
HK acts as the investment manager for Ping An Life Insurance Company of China, Ltd. (“ Ping
An Life Insurance ”) on a fully discretionary basis. It has entered into a cornerstone investment
agreement on behalf of Ping An Life Insurance. Ping An Life Insurance, a subsidiary of Ping
An Group, will hold the Offer Shares on behalf of its participating life insurance policyholders,
all of whom are individuals, none of whom holds 30% or more of the interests in the
participating life insurance account of Ping An Life Insurance.
Ping An Life Insurance was established in 2002 and is a key subsidiary of Ping An Group.
Ping An Life Insurance is one of China’s leading life insurance companies, offering life, health,
and accident insurance products. It serves customers through multiple sales channels including
individual insurance agents, bank-insurance partnerships, and telemarketing.
Dajia Life
Dajia Life Insurance Co., Ltd. (“ Dajia Life ”) is a professional life insurance company and
a subsidiary of Dajia Insurance Group, which is ultimately controlled by China Insurance
Security Fund Company Limited (“ China Insurance Company ”). China Insurance Company
is wholly owned by the Ministry of Finance of the People’s Republic of China. Established in
June 2010 and headquartered in Beijing, Dajia Life has a registered capital of RMB30.79
billion and mainly engages in various personal insurance businesses such as life insurance,
health insurance, accident insurance, reinsurance business of the above-mentioned businesses,
and other businesses approved by the National Financial Regulatory Administration. Currently,
Dajia Life has a total of 19 provincial-level branches in operation.
CORNERSTONE INVESTORS
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UBS AM Singapore
UBS Asset Management (Singapore) Ltd. (“ UBS AM Singapore ”), a company
incorporated in Singapore in December 1993, has entered into a cornerstone investment
agreement with the Company and the Joint Sponsors, in its capacity as the investment manager
for and on behalf of the following funds: (i) UBS (Lux) Equity Fund — Greater China (USD);
(ii) UBS (Lux) Equity Fund — China Opportunity (USD); (iii) UBS (HK) Fund Series — China
Opportunity Equity (USD); (iv) UBS (Lux) Equity SICA V — All China (USD); (v) UBS (Lux)
Investment SICA V — China A Opportunity (USD); (vi) UBS (CAY) China A Opportunity; and
(vii) certain other segregated accounts and mandates. To the best of UBS AM Singapore’s
knowledge, no single ultimate beneficial owner holds 30% or more interest in those funds.
UBS AM Singapore is a wholly owned subsidiary of UBS Asset Management AG, an
investment management company, which is wholly ultimately owned by UBS Group AG,
which is a company organized under Swiss law as a corporation that has issued shares of
common stock to investors. UBS Group AG’s shares are listed on the SIX Swiss Exchange
(stock code: UBSG) and the New Y ork Stock Exchange (stock code: UBS).
Midea Development Holding BVI
Midea Development Holding (BVI) Limited (“ Midea Development Holding BVI ”) is a
private company incorporated in the British Virgin Islands and ultimately controlled by Ms. Lu
Deyan, an Independent Third Party.
The company’s principal place of business is in Hong Kong, and its scope of business is
investment holding and to achieve capital appreciation through business operations.
Millennium
Millennium Capital Management (Singapore) Pte. Ltd. (“ Millennium Capital ”) is the
principal investment manager of Integrated Core Strategies (Asia) Pte. Ltd. (“ Millennium
ICSA ”), the cornerstone investor. Millennium Capital is one of the investment management
entities in the Millennium Group (Millennium Capital, together with its affiliated entities, are
collectively referred to herein as “ Millennium ”). Millennium is a global, diversified
alternative investment management firm and seeks to pursue a diverse range of investment
strategies across industry sectors, asset classes and geographies. Millennium ICSA is
incorporated in Singapore and Millennium Capital is licensed by the Monetary Authority of
Singapore. No ultimate beneficial owner holds more than 30% interests in Millennium ICSA.
CORNERSTONE INVESTORS
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Jane Street
Jane Street Asia Trading Limited (“ JSAT”) is a private company limited by shares formed
in Hong Kong and engages in securities investment and trading activities. Its ultimate
controlling shareholder is Jane Street Group, LLC which is a limited liability company
incorporated in Delaware. There is no individual holding an economic interest of 30% or more
in Jane Street Group, LLC.
CLOSING CONDITIONS
The subscription obligation of each of the Cornerstone Investors under the respective
Cornerstone Investment Agreements is subject to, among other things, the following closing
conditions:
(a) the underwriting agreements for the Hong Kong Public Offering and the
International Offering being entered into and having become effective and
unconditional (in accordance with their respective original terms or as subsequently
waived or varied by agreement of the parties thereto) by no later than the time and
date as specified in these underwriting agreements, and neither of the aforesaid
underwriting agreements having been terminated;
(b) the Offer Price having been agreed upon between the Company and the Overall
Coordinators (for themselves and on behalf of the underwriters of the Global
Offering);
(c) the Listing Committee of the Stock Exchange having granted the approval for the
listing of, and permission to deal in, the H Shares (including the H Shares subscribed
for by each of the Cornerstone Investors) as well as other applicable waivers and
approvals (including waivers and approvals related to the subscription of the H
Shares by each of the Cornerstone Investors), and such approval, permission or
waiver having not been revoked prior to the commencement of dealings in the H
Shares on the Stock Exchange;
(d) no laws shall have been enacted or promulgated by any governmental authority
which prohibits the consummation of the transactions contemplated in the Global
Offering or in the Cornerstone Investment Agreements and there shall be no orders
or injunctions from a court of competent jurisdiction in effect precluding or
prohibiting consummation of such transactions; and
(e) the respective representations, warranties, undertakings, acknowledgements and
confirmations of the Cornerstone Investor under the Cornerstone Investment
Agreement are (as of the date of the respective Cornerstone Investment Agreement)
and will be (as of the Closing (as defined in the respective Cornerstone Investment
Agreement) and the delayed delivery date (as applicable)) true, accurate and
complete in all respects and not misleading and that there is no breach of such
Cornerstone Investment Agreement on the part of the Cornerstone Investor.
CORNERSTONE INVESTORS
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RESTRICTIONS ON DISPOSALS BY THE CORNERSTONE INVESTORS
Each of the Cornerstone Investors has agreed that it will not, whether directly or
indirectly, at any time during the period of six months from and including the Listing Date (the
“Lock-up Period ”), dispose of any of the Offer Shares they have subscribed for pursuant to
the relevant Cornerstone Investment Agreement, save for in certain limited circumstances, such
as transfers to any of its wholly-owned subsidiaries who will be bound by the same obligations
of such Cornerstone Investor, including the Lock-up Period restriction.
CORNERSTONE INVESTORS
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You should read the following discussion and analysis in conjunction with our
historical financial information, included in the Accountants’ Report in Appendix I,
together with the respective accompanying notes. The historical financial information of
our Group has been prepared in accordance with the requirements of all applicable China
Accounting Standards for Business Enterprises (“CASBE”), which are also referred to as
China Accounting Standards, issued by the MOF of the PRC. The Reporting Accountants
had conducted their work on the historical financial information of the Group in
accordance with Hong Kong Standard on Investment Circular Reporting Engagements
200 “Accountants’ Reports on Historical Financial Information in Investment Circulars”
issued by the Hong Kong Institute of Certified Public Accountants (the “HKICP A”).
The following discussion and analysis contain forward-looking statements that
reflect our current views with respect to future events and financial performance. These
statements are based on our assumptions and analysis in light of our experience and
perception of historical trends, current conditions and expected future developments, as
well as other factors we believe are appropriate under the circumstances. However ,
whether actual outcomes and developments will meet our expectations and predictions
depends on a number of risks and uncertainties, many of which we cannot control or
foresee. In evaluating our business, you should carefully consider all of the information
provided in this prospectus, including the sections headed “Risk Factors” and
“Business,” and elsewhere in this prospectus. For further details, see “Forward-Looking
Statements.”
OVERVIEW
We are a technology-driven leading pork company, pioneering smart hog farming. With
over 30 years of deep-rooted expertise, we have become a leader in the hog farming industry
adopting a vertically-integrated business model spanning the entire hog value chain, including
hog breeding, hog farming, feed production, slaughtering and meat production. According to
Frost & Sullivan, since 2021, we have ranked first globally in the hog farming industry in terms
of production capacity and sales volume of hogs for four consecutive years. Our global market
share, measured by sales volume of hogs, increased from 2.6% in 2021 to 5.6% in 2024,
exceeding the total of the players ranked second to fourth in 2024. While continuing to solidify
our leadership in the hog farming industry, since 2019, we have strategically entered the hog
slaughtering and processing industry to enhance our integrated business model. According to
Frost & Sullivan, we ranked fifth globally and first in China in the hog slaughtering and
processing industry in terms of slaughter volume in 2024, and our slaughtering and meat
product business reported the highest revenue CAGR from 2021 to 2024 among large-scale hog
slaughtering and processing companies in China.
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Our revenue decreased by 11.2% from RMB124,826.2 million in 2022 to RMB110,860.7
million in 2023. Our revenue subsequently increased by 24.4% from RMB110,860.7 million in
2023 to RMB137,946.9 million in 2024. Our revenue also increased by 15.5% from
RMB96,775.1 million in the nine months ended September 30, 2024 to RMB111,790.0 million
in the nine months ended September 30, 2025. In 2022, 2023, 2024 and the nine months ended
September 30, 2024 and 2025, we recorded a net profit of RMB14,933.4 million, a net loss of
RMB4,167.9 million, a net profit of RMB18,925.0 million, a net profit of RMB11,245.7
million and a net profit of RMB15,112.1 million respectively. In 2022, 2023, 2024 and the nine
months ended September 30, 2024 and 2025, we recorded a net profit margin of 12.0%, a net
loss margin of 3.8%, a net profit margin of 13.7%, a net profit margin of 11.6% and a net profit
margin of 13.5%, respectively. Our EBITDA (non-CASBE measure) decreased by 58.5% from
RMB29,792.0 million in 2022 to RMB12,354.2 million in 2023, and subsequently increased by
199.1% from RMB12,354.2 million in 2023 to RMB36,945.3 million in 2024. Our EBITDA
(non-CASBE measure) increased by 15.5% from RMB24,663.1 million in the nine months
ended September 30, 2024 to RMB28,490.2 million in the nine months ended September 30,
2025. Our EBITDA margin (non-CASBE measure) decreased from 23.9% in 2022 to 11.1% in
2023, subsequently increased from 11.1% in 2023 to 26.8% in 2024. Our EBITDA margin
(non-CASBE measure) remained stable at 25.5% in the nine months ended September 30, 2024
and 2025. See “— Non-CASBE Financial Measure.”
BASIS OF PRESENTATION
The historical financial information has been prepared in accordance with the
requirements of all applicable China Accounting Standards for Business Enterprises, which are
also referred to as China Accounting Standards, issued by the MOF. Further details of the
material accounting policy information are set out in Note II to the Accountants’ Report in
Appendix I to this prospectus. MOF has issued a number of new and revised CASBEs. For the
purpose of preparing the historical financial information, we have adopted all applicable new
and revised CASBEs to the Track Record Period, except for any new standards or
interpretations that are not yet effective for the accounting period beginning January 1, 2025.
The historical financial information also complies with the disclosure requirements of
“Regulation on the Preparation of Information Disclosures by Companies Issuing Securities,
No. 15: General Requirements for Financial Reports” as revised by the China Securities
Regulatory Commission in 2023 and the applicable disclosure provisions of the Rules
Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited. The
accounting policies set out in the Accountants’ Report in Appendix I to this prospectus have
been applied consistently to all periods presented in the historical financial information.
The historical financial information is presented in Renminbi except when otherwise
indicated.
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MAJOR FACTORS AFFECTING OUR RESULTS OF OPERATIONS
Our results of operations and financial condition have been and will continue to be,
materially affected by a number of factors and developments, some of which are outside our
control, including:
Fluctuations in Market Selling Prices of Hogs
As we derive a significant majority of revenue from our hog business, our overall
profitability is significantly affected by the financial performance of our hog business. The
revenue from our hog business has been and is expected to be significantly affected by price
fluctuations of hogs in China. According to Frost & Sullivan, the market selling prices of hogs
in China experienced fluctuations, which decreased from RMB18.5 per kg in 2022
(approximately RMB2,300 per head) to RMB15.1 per kg in 2023 (approximately RMB2,100
per head), and subsequently increased to RMB16.7 per kg in 2024 (approximately RMB2,200
per head). According to Frost & Sullivan, China’s average market selling prices of hogs are
expected to follow a more stable pattern in the future, driven by the trend of scaled-up farming,
rational capacity management and an industry-wide focus on cost efficiency. See “Industry
Overview — Market Selling Prices of Hogs in China.”
The fluctuations of market selling prices of hogs in China are resulted from (i) the
changes in the supply of hogs in China, affected by various factors, such as biological
production cycle, animal diseases, government policies and weather conditions, as well as (ii)
the changes in consumer demand for hogs and meat products. The demand for our products is
typically relatively higher before traditional festivals, such as China’s Spring Festival, Mid
Autumn Festival and National Day. According to Frost & Sullivan, prior to 2022, a full hog
cycle in China lasted about four to five years. In a typical cycle, high market selling prices
encourage producers to expand the quantity of breeding hogs, boosting supply; once the market
becomes saturated, market selling prices fall, producers cut capacity, and the next up-cycle
begins. In short, market selling prices of hogs move mainly with the supply-demand dynamics.
With the hog prices in downswing in 2023, the revenue from our hog business decreased by
9.6% from RMB119.7 billion in 2022 to RMB108.2 billion in 2023 and our gross profit margin
of our hog business decreased from 18.4% in 2022 to 2.9% in 2023. With the market selling
prices of hogs in upswing in 2024, the revenue from hog business increased by 25.9% from
RMB108.2 billion in 2023 to RMB136.2 billion in 2024, and our gross profit margin of our hog
business increased from 2.9% in 2023 to 19.2% in 2024. The revenue from hog business further
increased by 14.8% from RMB95.4 billion in the nine months ended September 30, 2024 to
RMB109.5 billion in the same period of 2025, primarily due to an increase in sales volume of
our hogs, including finished hogs and piglets partially offset by a decrease in average selling
price of finished hogs, and our gross profit margin of our hog business increased from 17.7%
in the nine months ended September 30, 2024 to 18.4% in the same period of 2025, primarily
due to enhanced cost management measures.
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In addition, the results of operations of our slaughtering and meat product business are
mainly affected by market selling prices of hogs and meat products. Changes in the market
selling prices of meat products are also correlated with market selling prices of hogs, which
would affect the revenue from our slaughtering and meat product business. As a result, it is
crucial for us to closely monitor the changes of market demand and formulate our dynamic
pricing mechanism corresponding to different market conditions.
Our Ability to Effectively Manage Costs and Enhance Operational Efficiency
Our results of operations depend on our efforts to improve operational efficiency, which
is in turn affected by hog health and smart farming. Hog health is an important factor that
determines hog growth rates, survival rates and pork quality. Technology and innovation
permeate every aspect of our hog business, which contributes to our success. Leveraging our
competitive advantage in breeding and nutrition management, as well as the adoption of
advanced technologies and smart devices in hog breeding and hog farming practices, we are
able to mass produce hogs with improving genetic traits and good health. Through improved
biosecurity and hog health management measures, we have achieved industry-leading survival
rates among large-scale hog farms in 2024. These facilities also reduce labor input and improve
production efficiency while ensuring animal welfare. Equipped with advanced technologies
and facilities, our large-scale, modern and standardized farms have contributed and are
expected to continuously contribute to our long-term profit growth.
Our results of operations also depend on our ability to effectively manage costs. Feed
costs constitute a large portion of our operating costs, primarily in relation to our hog business,
accounting for 59.6%, 61.9%, 59.6%, 59.4% and 58.5% of our total operating costs in 2022,
2023, 2024 and the nine months ended September 30, 2024 and 2025, respectively. As corn,
wheat and soybean meal are our primary feed ingredients, price fluctuations of these
commodities directly affect our feed costs. Consequently, the profitability and results of
operations of our hog business are affected by the price fluctuations of the primary feed
ingredients. We have established our own feed production factories and developed feed
formulations to produce feed tailored to the needs of hogs at different stages. Leveraging our
optimized soybean meal feed formulation, we are able to reduce the proportion of soybean
meal used in feed, while maintaining the overall nutrition for our hogs at each period of hog
farming. Our smart feeding system also precisely calculates the amount of feeds that are
necessary for hogs at different growth periods, avoiding wastage. By closely monitoring the
market trend of feed ingredients, we adjust our feed formulations in real time to optimize our
cost structure. We believe our continuous efforts in nutrition area would contribute to the
improvement of our financial performance in the long run.
As a result of our efforts in breeding, nutrition management, hog health management and
feed cost management, our average total unit cost decreased from RMB15.72 per kg in 2022
to RMB14.94 per kg in 2023 and RMB14.01 per kg in 2024, and further decreased to
RMB12.19 per kg in the nine months ended September 30, 2025.
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Our Ability to Scale Production Capacity and Increase our Sales Volume
We believe that our ability to scale hog production capacity enables us to timely capture
the opportunities from hog prices in upswings. According to Frost & Sullivan, we ranked first
in the hog farming industry globally in 2024 in terms of production capacity and sales volume.
In 2022, 2023, 2024 and the nine months ended September 30, 2024 and 2025, our hog
production capacity amounted to 74.3 million heads, 80.0 million heads, 81.0 million heads,
80.9 million heads and 82.6 million heads, respectively. Over the past five years, the sales
volume of our hogs increased by 53.5 million heads, and our ability to scale up production
capacity ranked first globally, according to Frost & Sullivan. Our hog sales volume increased
from 61.2 million heads in 2022 to 63.8 million heads in 2023, further to 71.6 million heads
in 2024. Our hog sales volume also increased from 50.1 million heads in the nine months ended
September 30, 2024 to 69.2 million heads in the same period of 2025. Our established business
scale and ability to scale production capacity empowered us obtain a larger market share and
ensured our market leadership.
We adopt on-demand production for our slaughtering and meat product business. The
profitability of our slaughtering and meat product business is affected by our production
capacity and the utilization rate of our slaughtering plants. Since our commencement of
slaughtering and meat product business in 2019, we have established specialized sales teams,
expanded our market reach and sales channels for our meat products. As of September 30,
2025, we had established ten slaughtering and meat product plants across seven provinces in
China with a designed slaughtering capacity for the nine months ended September 30, 2025 of
21.8 million heads, with an utilization rate of 88.1% in nine months ended September 30, 2025.
In 2022, 2023, 2024 and the nine months ended September 30, 2025, the sales volume of our
slaughtering and meat product business was 757 thousand tons, 1,405 thousand tons, 1,416
thousand tons and 2,144 thousand tons, respectively. See “Business — Slaughtering and Meat
Product Business.” We plan to further increase the utilization of our slaughtering capacity to
match the scale of our hog business and expect to generate further synergies between our
business segments.
Product and Business Segment Mix
Our overall profitability is affected by the revenue contributions of our business
segments, which are in turn affected by the underlying product mix in each segment. Our major
business segments include (i) the hog business and (ii) the slaughtering and meat product
business. In 2022, 2023, 2024 and the nine months ended September 30, 2024 and 2025, we
derived 95.9%, 97.6%, 98.7%, 98.5% and 98.0% of our total revenue from the hog business
(before inter-segment elimination), respectively. The gross profit margin of our hog business
was 18.4%, 2.9%, 19.2%, 17.7% and 18.4% in 2022, 2023, 2024 and the nine months ended
September 30, 2024 and 2025, respectively. The gross profit margin for our hog business is also
affected by product mix, which include finished hogs, piglets and breeding hogs of varying
pricing and profit margins. For instance, the gross profit margin of piglets is generally higher
than that of finished hogs. In the Track Record Period, sales of finished hogs accounted for a
vast majority of our revenue and gross profits from the hog business.
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We started our slaughtering and meat product business in 2019. Our meat products can be
divided into three main categories, namely, carcasses, pork cuts and by-products. Our meat
products are offered in different sizes and portions according to customers’ requirements. For
example, we introduced skinless, bone-in meat products specifically designed for barbecue
catering businesses, which have been successfully replicated in a number of markets. Pork cuts
are typically of higher margins compared to carcasses. We plan to proactively expand our sales
channels and increase the sales volume of pork cuts with higher margins.
We believe that our slaughtering and meat product business is complementary and
synergetic to our hog business. The sales volume of our slaughtering and meat product business
increased from 757 thousand tons in 2022 to 1,405 thousand tons in 2023, further increased to
1,416 thousand tons in 2024. The sales volume of our slaughtering and meat product business
also increased from 916 thousand tons in the nine months ended September 30, 2024 to 2,144
thousand tons in the nine months ended September 30, 2025. The gross profit margin of our
slaughtering and meat product business improved throughout the Track Record Period at
(0.5)%, 0.2%, 1.0%, 0.2% and 2.2% in 2022, 2023, 2024 and the nine months ended September
30, 2024 and 2025, respectively. As we continue to scale up our slaughtering and meat product
business, the enhanced synergy between hog business and slaughtering and meat product
business is expected to improve our financial performance in general.
Customer Demand and Consumption Patterns for Our Products
Our results of operations are affected by the demands for hogs and meat products. Our
main products include finished hogs, breeding hogs, piglets and meat products. Customers of
our hog business mainly include hog dealers as well as slaughtering plants, whilst we primarily
sell our meat products to wholesale market customers and direct sales customers, including
retailers, restaurants, canteens and food processors. The consumer demand and consumption
patterns for our products are determined by a large number of factors, including consumer
preferences, evolving tastes and spending habits, consumer perception of food safety, quality
of meat products, prices of our products and substitute products. Such would also affect the
sales volume of our hogs as well as meat products.
We believe that the demand for pork in China will sustain the momentum of growth in the
future. According to Frost & Sullivan, pork has been the main source of meat protein in China,
consistently representing approximately 60% of total meat consumption. See “Industry
Overview — Overview of Global Pork Consumption — Global Pork Consumption by
Countries.” We believe the continued development of China’s economy and improvement in
standards of living will keep driving the growth in sales of pork, which will benefit the
financial performance of both our hog business and slaughtering and meat product business.
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MATERIAL ACCOUNTING POLICY INFORMATION
Some of our accounting policies require us to apply estimates and assumptions as well as
complex judgments relating to accounting items. The estimates and assumptions we use and the
judgments we make in applying our accounting policies have a significant impact on our
financial position and results of operations. Our management continually evaluates such
estimates, assumptions and judgments based on historical experiences and other factors,
including expectations of future events that are believed to be reasonable under the
circumstances. There has not been any material deviation between our management’s estimates
or assumptions and actual results and we have not made any material changes to these
estimates or assumptions during the Track Record Period. We do not expect any material
changes in these estimates and assumptions in the foreseeable future.
Set forth below are discussions of the accounting policies that we believe are of critical
importance to us or involve the most significant estimates, assumptions and judgments used in
the preparation of our financial statements. Other material accounting policy information,
estimates, assumptions and judgments, which are important for understanding our financial
condition and results of operations, are set forth in detail in Notes II to the Accountants’ Report
in Appendix I to this prospectus.
Revenue Recognition
Revenue is recognized when the customers obtain control over relevant goods, if the
contract with customers meets all of the following criteria: (i) the parties to the contract have
approved the contract and are committed to perform their respective obligations; (ii) the parties
to the contract can identify each party’s rights regarding the goods to be transferred; (iii) the
parties to the contract can identify the payment terms for the goods to be transferred; (iv) the
contract has commercial substance (i.e. the risk, timing or amount of the entity’s future cash
flows is expected to change as a result of the contract); and (v) it is probable that we will
collect the consideration to which it will be entitled in exchange for the goods that will be
transferred to the customer.
Performance obligation is our commitment to transfer distinct goods to customers as
specified in related contracts. A good that is promised to a customer is distinct if both of the
following criteria are met: (i) the customer can benefit from the good either on its own or
together with other resources that are readily available to the customer; and (ii) our promise
to transfer the good to the customer is separately identifiable from other promises in the
contract.
Where a contract has two or more performance obligations, we determine the stand-alone
selling price at contract inception of the distinct good or service underlying each performance
obligation in the contract and allocates the transaction price in proportion to those stand-alone
selling prices. We recognize as revenue the amount of the transaction price that is allocated to
each performance obligation. The stand-alone selling price is the price at which we separately
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sell goods or provide services to customers. If the stand-alone selling price cannot be directly
observable, we will comprehensively consider all the relevant information that is reasonably
available to us and use the observable inputs to estimate the stand-alone selling price to the
maximum extent.
We satisfy a performance obligation over time if one of the following criteria is met;
otherwise, the performance obligation is satisfied at a point in time:
— the customer simultaneously receives and consumes the benefits provided by our
performance as we perform;
— the customer can control the asset created or enhanced during our performance; or
— our performance does not create an asset with an alternative use to it and we have
an enforceable right to payment for performance completed to date.
For performance obligation satisfied at a point in time, we recognize revenue at the point
in time at which the customer obtains control of relevant goods or services. To determine
whether a customer has obtained control of goods, we consider the following indicators: (i) we
have a present right to payment for the goods and the customer is presently obliged to pay for
the goods; (ii) we have transferred physical possession of the goods and the customer has
physical possession of the goods; (iii) we have transferred the legal title of the goods and the
customer has legal title to the goods; (iv) we have transferred the significant risks and rewards
of ownership of the goods and the customer has the significant risks and rewards of ownership
of the goods; (v) the customer has accepted the goods; (vi) other indicators of that the customer
obtains control of relevant goods.
We determine whether it is a principal or an agent, based on whether it obtains control of
the specified good or service before that good or service is transferred to a customer. We are
a principal if it controls the specified good or service before that good or service is transferred
to a customer and recognize revenue in the gross amount of consideration which we have
received (or which is receivable). Otherwise, we are an agent and recognize revenue in the
amount of any fee or commission to which it expects to be entitled. The fee or commission is
the net amount of consideration that we retain after paying the other party the consideration,
or is determined according to the established amount or proportion.
A contract asset is our right to consideration in exchange for goods or services that we
have transferred to a customer when that right is conditional on something other than the
passage of time. We recognize loss allowances for expected credit loss on contract assets.
Accounts receivable is our right to consideration that is unconditional (only the passage of time
is required). A contract liability is our obligation to transfer goods or services to a customer
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for which we have received consideration (or an amount of consideration is due) from the
customer. The recognition of revenue from sales of goods is as follows:
Sales of Hogs
Hogs are usually collected by customers from our premises. According to the sales
contract, the control of the hogs is transferred to the customers when the hogs have been
weighted. The revenue will be recognized based on the weight information on the weight note
and the agreed unit prices.
Sales of Meat Products
For orders collected by customers from our premises, revenue is recognized when the
customers sign the delivery note. For orders that we are responsible for the delivery, revenue
is recognized when the goods are delivered to the location designated by the customers and the
delivery note is signed by the customers.
Biological Assets
Biological assets of our Group include consumable biological assets and productive
biological assets.
Consumable biological assets include suckling piglets, piglets under nursing period, hogs
under finishing period and others. Consumable biological assets are recognized in inventories.
See Note II.10 to the Accountants’ Report in Appendix I to this prospectus.
Productive biological assets include immature breeding hogs and mature breeding hogs.
Mature breeding hogs are reproductive boars and reproductive sows.
Productive biological assets are initially measured at cost. The cost of purchased
productive biological assets comprises purchase price, relevant taxes, transportation costs,
insurance costs and other expenditures directly attributable to the purchase of the assets. The
cost of self-breeding productive biological assets comprises those costs necessarily incurred
before the assets become available for intended production and operating purposes, including
feed costs, labor costs, an appropriate allocation of the depreciation cost of fixed assets and
mature productive biological assets and an appropriate allocation of other indirect costs.
The subsequent costs of mature productive biological assets, including feed costs, labor
costs and depreciation costs, are collected and included in the cost of piglets.
We accrue depreciation of productive biological assets using straight-line method. We
determine the useful life and estimated net residual value of a productive biological asset and
the depreciation method on a reasonable basis according to the asset’s nature, usage and the
pattern in which the associated economic benefits are expected to be realized. We review the
useful life and estimated net residual value of a productive biological asset and the depreciation
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method applied at least at each financial year-end. If the expected useful life or estimated net
residual value is different from the previous estimate, or the pattern in which the economic
benefits associated with the asset is realized has changed significantly, the useful life,
estimated net residual value or the depreciation method shall be revised or changed
accordingly. Such revisions or changes shall be accounted for as changes in accounting
estimates. The useful life, expected net residual value and depreciation method of the mature
productive biological assets of our Group are as follows:
Estimated
useful life
Estimated
net residual
value rate
Depreciation
rate per month
(years)
Breeding hogs /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182.5 30% 2.33%
We carry out an examination on productive biological assets at least at each financial
year-end. If there is clear evidence that the recoverable amount of a productive biological asset
is lower than its carrying amount due to reasons such as natural disasters, pest-outbreaks,
diseases or changes in market conditions, impairment losses in respect of that biological asset
shall be recognized and charged to profit or loss for the current period. The impairment amount
is the difference between the carrying amount and the recoverable amount.
Once an impairment loss is provided for a productive biological asset, it should not be
reversed in a subsequent period.
When the intended use of a productive biological asset changes, the transfer cost shall be
recorded at the carrying amount at the date of transfer.
Fixed Assets
Recognition of Fixed Assets
The cost of a purchased fixed asset comprises the purchase price, related taxes and any
directly attributable expenditure for bringing the asset to working condition for its intended
use. See Note II.13 of Appendix I to this prospectus.
Where the parts of an item of fixed assets have different useful lives or provide benefits
to our Group in a different pattern, thus necessitating use of different depreciation rates or
methods, each part is recognized as a separate fixed asset.
Any subsequent costs including the cost of replacing part of an item of fixed assets are
recognized as assets when it is probable that the economic benefits associated with the costs
will flow to us and the carrying amount of the replaced part is derecognized. The costs of the
day-to-day maintenance of fixed assets are recognized in profit or loss as incurred.
FINANCIAL INFORMATION
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Fixed assets are presented in the balance sheet at cost less accumulated depreciation and
impairment provision.
Depreciation of Fixed Assets
The cost of a fixed asset, less its estimated residual value and accumulated impairment
losses, is depreciated using the straight-line method over its estimated useful life, unless the
fixed asset is classified as held for sale.
The estimated useful lives, residual value rates and depreciation rates of each class of
fixed assets are as follows:
Method of depreciation
Estimated
useful life
Residual
value rate
Depreciation
rate per
year
(years)
Plant & buildings /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Straight-line method 10-20 5% 4.75%-
9.50%
Machinery & equipment /H1118/H1118/H1118Straight-line method 3-20 5% 4.75%-
31.67%
Motor vehicles /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Straight-line method 6 5% 15.83%
Others /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Straight-line method 3-10 5% 9.50%-
31.67%
Useful lives, estimated residual values and depreciation methods are reviewed at least at
each year-end.
Financial Instruments
Financial instruments include cash at bank and on hand, investments in equity securities
other than those classified as long-term equity investments, receivables, payables, loans and
borrowings, debentures payable and share capital.
Recognition and Initial Measurement of Financial Assets and Financial Liabilities
A financial asset or financial liability is recognized in the balance sheet when we become
a party to the contractual provisions of a financial instrument.
A financial asset or financial liability is measured initially at fair value. For financial
assets and financial liabilities measured at fair value through profit or loss, any related directly
attributable transaction costs are charged to profit or loss; for other categories of financial
assets and financial liabilities, any related directly attributable transaction costs are included
in their initial costs. Accounts receivable that do not have a significant financing component
FINANCIAL INFORMATION
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--- page 360 ---
or do not account for the significant financing component in one-year-or-less contracts under
the practical expedient are initially measured at the transaction price in accordance with
Note II.22 to the Accountants’ Report in Appendix I to this prospectus.
Classification and Subsequent Measurement of Financial Assets
Classification of Financial Assets
The classification of financial assets is generally based on the business model under
which a financial asset is managed and its contractual cash flow characteristics. On initial
recognition, a financial asset is classified as measured at amortized cost, at fair value through
other comprehensive income (“FVOCI”), or at fair value through profit or loss (“FVTPL”).
Financial assets are not reclassified subsequent to their initial recognition unless we
change its business model for managing financial assets, in which case all affected financial
assets are reclassified on the first day of the first reporting period following the change in the
business model.
A financial asset is measured at amortized cost if it meets both of the following conditions
and is not designated as at FVTPL:
— it is held under a business model whose objective is to hold assets to collect
contractual cash flows; and
— its contractual terms give rise on specified dates to cash flows that are solely
payments of principal and interest on the principal amount outstanding.
A financial asset is measured at FVOCI if it meets both of the following conditions and
is not designated as at FVTPL:
— it is held under a business model whose objective is achieved by both collecting
contractual cash flows and selling financial assets; and
— its contractual terms give rise on specified dates to cash flows that are solely
payments of principal and interest on the principal amount outstanding.
On initial recognition of an equity investment that is not held for trading, we may
irrevocably elect to present subsequent changes in the investment’s fair value in other
comprehensive income. This election is made on an investment-by-investment basis and the
instrument meets the definition of equity from the perspective of the issuer.
FINANCIAL INFORMATION
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All financial assets not classified as measured at amortized cost or FVOCI as described
above are measured at FVTPL. On initial recognition, we may irrevocably designate a financial
asset that otherwise meets the requirements to be measured at amortized cost or at FVOCI as
at FVTPL if doing so eliminates or significantly reduces an accounting mismatch that would
otherwise arise.
The business model refers to how we manage our financial assets in order to generate cash
flows. That is, our business model determines whether cash flows will result from collecting
contractual cash flows, selling financial assets or both. We determine the business model for
managing the financial assets according to the facts and based on the specific business
objective for managing the financial assets determined by our key management personnel.
In assessing whether the contractual cash flows are solely payments of principal and
interest, we consider the contractual terms of the instrument. For the purposes of this
assessment, ‘principal’ defined as the fair value of the financial asset on initial recognition.
‘Interest’ is defined as consideration for the time value of money and for the credit risk
associated with the principal amount outstanding during a particular period of time and for
other basic lending risks and costs, as well as a profit margin. Our Group also assesses whether
the financial asset contains a contractual term that could change the timing or amount of
contractual cash flows such that it would not meet this condition.
Subsequent Measurement of Financial Assets
— Financial assets at FVTPL
These financial assets are subsequently measured at fair value. Net gains and losses,
including any interest or dividend income, are recognized in profit or loss unless the financial
assets are part of a hedging relationship.
— Financial assets at amortized cost
These assets are subsequently measured at amortized cost using the effective interest
method. A gain or loss on a financial asset that is measured at amortized cost and that is not
part of a hedging relationship should be recognized in profit or loss when the financial asset
is derecognized, amortized under the effective interest method or when an impairment gain or
loss is recognized.
— Equity investments at FVOCI
These assets are subsequently measured at fair value. Dividends are recognized as income
in profit or loss. Other net gains and losses are recognized in other comprehensive income. On
derecognition, gains and losses accumulated in other comprehensive income are reclassified to
retained earnings.
FINANCIAL INFORMATION
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Classification and Subsequent Measurement of Financial Liabilities
Financial liabilities are classified as measured at FVTPL or as financial liabilities
measured at amortized cost.
— Financial Liabilities at FVTPL
A financial liability is classified as at FVTPL if it is classified as held-for-trading
(including derivative financial liabilities) or if it is designated as such on initial recognition.
Financial liabilities at FVTPL are subsequently measured at fair value; and net gains and
losses, are recognized in profit or loss, unless the financial liabilities are part of a hedging
relationship.
— Financial Liabilities at Amortized Cost
These financial liabilities are subsequently measured at amortized cost using the effective
interest method.
Offsetting
Financial assets and financial liabilities are generally presented separately in the balance
sheet and are not offset. However, a financial asset and a financial liability are offset and the
net amount is presented in the balance sheet when both of the following conditions are
satisfied:
— We currently have a legally enforceable right to set off the recognized amounts;
— We intend either to settle on a net basis, or to realize the financial asset and settle
the financial liability simultaneously.
Derecognition of Financial Assets and Financial Liabilities
A financial asset is derecognized when one of the following conditions is met:
— our contractual rights to the cash flows from the financial asset expire;
— the financial asset has been transferred and our Group transfers substantially all of
the risks and rewards of ownership of the financial asset; or
— the financial asset has been transferred; and although our Group neither transfers nor
retains substantially all of the risks and rewards of ownership of the financial asset,
it does not retain control over the transferred asset.
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Where a transfer of a financial asset in its entirety meets the criteria for derecognition,
the difference between the two amounts below is recognized in profit or loss:
— the carrying amount of the financial asset transferred measured at the date of
derecognition;
— the consideration received from the transfer.
We derecognize a financial liability (or part of it) only when our contractual obligation
(or part of it) is extinguished.
Impairment
We recognize loss allowances for expected credit loss (ECL) on financial assets measured
at amortized cost.
We do not use ECL model on financial assets measured at fair value, including equity
investments at FVOCI and derivative financial assets.
Measurement of ECLs
ECLs are a probability-weighted estimate of credit losses. Credit losses are measured as
the present value of all cash shortfalls (i.e. the difference between the cash flows due to our
Group in accordance with the contract and the cash flows that our Group expects to receive).
The maximum period considered when estimating ECLs is the maximum contractual
period (including extension options) over which our Group is exposed to credit risk.
Lifetime ECLs are the ECLs that result from all possible default events over the expected
life of a financial instrument.
12-month ECLs are the portion of ECLs that result from default events that are possible
within the 12 months after the balance sheet date (or a shorter period if the expected life of the
instrument is less than 12 months).
Loss allowances for bills receivable and accounts receivable arising from ordinary
business activities such as sale of goods and provision of services are always measured at an
amount equal to lifetime ECLs. ECLs on these financial assets are estimated using a provision
matrix based on our historical credit loss experience, adjusted for factors that are specific to
the debtors and an assessment of both the current and forecast general economic conditions at
the balance sheet date.
FINANCIAL INFORMATION
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Except for bills receivable and accounts receivable, we measure loss allowances at an
amount equal to 12-month ECLs for the following financial instruments and at an amount equal
to lifetime ECLs for all other financial instruments:
— Financial instruments that have been determined to have low credit risk at the
balance sheet date;
— Financial instruments for which credit risk has not increased significantly since
initial recognition.
Provisions for Bad and Doubtful Debts Arising from Receivables
Categories of groups for collective assessment based on credit risk characteristics and
basis for determination
Bills receivable /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Based on the different credit risk characteristics of
acceptors, we classify bills receivable into two
groups: bank acceptance bills and commercial
acceptance bills.
Accounts receivable /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Based on the credit risk characteristics of different
counterparties, we classify accounts receivable into
two groups: accounts receivable due from related
parties within the consolidation scope and accounts
receivable due from other customers.
Other receivables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Based on the nature of receivables and the credit risk
characteristics of different counterparties, we classify
other receivables into three groups, specifically:
dividends receivable, receivables due from related
parties within the consolidation scope and other parts
of other receivables.
Criteria for Individual Assessment
Bills receivable, accounts receivable and other receivables are usually assessed
collectively as a group based on credit risk characteristics to make provisions. When a
counterparty is significantly different from other counterparties in a group in terms of credit
risk characteristics, or if there has been a significant change in its credit risk characteristics,
the individual approach is adopted for receivables due from this counterparty. For example,
when a counterparty is in serious financial difficulties and the expected credit loss ratio of
receivables due from this counterparty is significantly higher than the average expected credit
loss ratio of the relevant ageing range, it should be individually assessed for provisioning
purposes.
FINANCIAL INFORMATION
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--- page 365 ---
Financial Instruments that have Low Credit Risk
The credit risk on a financial instrument is considered low if the financial instrument has
a low risk of default, the borrower has a strong capacity to meet its contractual cash flow
obligations in the near term and adverse changes in economic and business conditions in the
longer term may, but will not necessarily, reduce the ability of the borrower to fulfil its
contractual cash flow obligations.
Significant Increases in Credit Risk
In assessing whether the credit risk of a financial instrument has increased significantly
since initial recognition, we compare the risk of default occurring on the financial instrument
assessed at the balance sheet date with that assessed at the date of initial recognition.
When determining whether the credit risk of a financial asset has increased significantly
since initial recognition, we consider reasonable and supportable information that is relevant
and available without undue cost or effort, including forward-looking information. In
particular, the following information is taken into account:
— failure to make payments of principal or interest on their contractual due dates;
— an actual or expected significant deterioration in a financial instrument’s external or
internal credit rating (if available);
— an actual or expected significant deterioration in the operating results of the debtor;
and
— existing or forecast changes in the technological, market, economic or legal
environment that have a significant adverse effect on the debtor’s ability to meet its
obligation to us.
We assume that the credit risk on a financial asset has increased significantly if it is more
than 30 days past due.
Credit-Impaired Financial Assets
At each balance sheet date, we assess whether financial assets carried at amortized cost
and debt investments at FVOCI are credit-impaired. A financial asset is ‘credit-impaired’ when
one or more events that have a detrimental impact on the estimated future cash flows of the
financial asset have occurred. Evidence that a financial asset is credit-impaired includes the
following observable data:
— significant financial difficulties of the issuer or debtor;
FINANCIAL INFORMATION
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--- page 366 ---
— a breach of contract, such as a default or delinquency in interest or principal
payments;
— for economic or contractual reasons relating to the debtor’s financial difficulties, we
having granted to the debtor a concession that it would not otherwise consider;
— it is probable that the debtor will enter bankruptcy or other financial reorganization;
or
— the disappearance of an active market for the financial asset because of financial
difficulties of the issuer or debtor.
Presentation of Allowance for ECL
ECLs are remeasured at each balance sheet date to reflect changes in the financial
instrument’s credit risk since initial recognition. Any change in the ECL amount is recognized
as an impairment gain or loss in profit or loss. Loss allowances for financial assets measured
at amortized cost are deducted from the gross carrying amount of the assets.
Write-Off
The gross carrying amount of a financial asset is written off (either partially or in full)
to the extent that there is no realistic prospect of recovery. A write-off constitutes a
derecognition event. This generally occurs when we determine that the debtor does not have
assets or sources of income that could generate sufficient cash flows to repay the amounts
subject to the write-off. However, financial assets that are written off could still be subject to
enforcement activities in order to comply with our procedures for recovery of amounts due.
Subsequent recoveries of an asset that was previously written off are recognized as a
reversal of impairment in profit or loss in the period in which the recovery occurs.
Inventories
Categories
Inventories include raw materials, finished goods, consumable biological assets, low
value consumables and packaging materials.
Measurement Method of Cost of Inventories
When we obtain main raw materials, low value consumables and packaging materials, the
initial measurement is based on the actual cost, including procurement costs, processing costs
and other costs. Cost of main raw materials recognized is calculated using the weighted
average method.
FINANCIAL INFORMATION
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Consumable biological assets include suckling piglets, piglets under nursing period, hogs
under finishing period and others.
The cost of consumable biological assets includes feed costs, labor costs, fixed assets
depreciation expenses and other indirect costs that should be allocated before they reach the
saleable state.
The cost of suckling piglets includes the depreciation expenses and feeding cost of
reproductive sows and reproductive boars and the feeding cost of suckling piglets themselves.
The cost of piglets under nursing period includes the cost of suckling piglets and the feeding
cost consumed at the nursing period. The cost of hogs under finishing period includes the cost
of piglets under nursing period and the feeding cost consumed at the finishing period.
Cost of consumable biological assets recognized is calculated using the weighted average
method at the end of each month.
Basis for Determining Net Realizable V alue of Inventories and Criteria and Method for
Provision for Inventories
At the balance sheet date, inventories are carried at the lower of cost and net realizable
value. Any excess of the cost over the net realizable value of inventories is recognized as a
provision for inventories and is recognized in profit or loss. The net realizable value of
materials held for production is measured based on the net realizable value of the finished
goods in which they will be incorporated. If there is clear evidence that the net realizable value
of a consumable biological asset is lower than its carrying amount due to reasons such as
natural disasters, pest-outbreaks, diseases or changes in market conditions, a provision for
decline in value in respect of that biological asset shall be recognized and charged to profit or
loss for the current period. The provision amount is the difference between the carrying amount
and the net realizable value.
Provisions for inventories are usually assessed by each item. When the circumstances that
previously caused inventories to be written-down below cost no longer exist, the amount of the
write-down shall be reversed. The reversal shall be limited to the amount originally provided
for the decline in value of inventories. The amount of the reversal is included in profit or loss
for the current period.
Inventory Count System
We maintain a perpetual inventory system.
FINANCIAL INFORMATION
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--- page 368 ---
CONSOLIDATED INCOME STATEMENT
The following table sets forth a summary of our consolidated income statement for the
periods indicated:
Y ear ended December 31,
Nine months ended
September 30,
2022 2023 2024 2024 2025
(RMB in million)
(Unaudited)
Revenue /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118124,826.2 110,860.7 137,946.9 96,775.1 111,790.0
Operating costs /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(102,987.1) (107,414.8) (111,666.5) (80,065.4) (90,855.5)
Gross profit /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111821,839.1 3,445.9 26,280.4 16,709.7 20,934.5
Taxes and surcharges /H1118/H1118/H1118/H1118/H1118/H1118(185.3) (189.5) (223.2) (162.3) (202.6)
Selling and distribution
expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(758.7) (982.6) (1,095.7) (789.2) (943.7)
General and administrative
expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(4,201.4) (3,876.3) (3,331.7) (2,688.3) (2,741.5)
Research and development
expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(1,142.4) (1,657.7) (1,747.2) (1,267.6) (1,263.3)
Financial expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(2,907.7) (3,054.1) (2,975.4) (2,285.1) (1,951.0)
Other income /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,188.6 2,805.6 3,010.4 2,552.4 2,028.7
Investment income/(losses) /H1118/H1118/H111846.9 (6.4) 99.6 42.2 95.8
Gains/(losses) from changes in
fair value /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 0.1 (1.4) 6.0
Credit (losses)/reversal /H1118/H1118/H1118/H1118/H1118(23.1) (4.2) 0.3 9.2 (13.0)
Impairment losses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– (202.5) (12.9) (12.5) (2.9)
(Losses)/gains from asset
disposals /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(2.3) (10.1) 5.8 7.5 1.8
Operating profit/(loss) /H1118/H1118/H1118/H1118/H111814,853.7 (3,731.9) 20,010.5 12,114.6 15,948.8
Non-operating income /H1118/H1118/H1118/H1118/H1118/H1118376.9 157.2 84.4 64.4 82.2
Non-operating expenses /H1118/H1118/H1118/H1118/H1118(300.6) (595.4) (1,198.5) (965.6) (934.6)
Profit/(loss) before income
tax /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111814,930.0 (4,170.1) 18,896.4 11,213.4 15,096.4
Income tax credits /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183.4 2.2 28.6 32.3 15.7
Net profit/(loss) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111814,933.4 (4,167.9) 18,925.0 11,245.7 15,112.1
FINANCIAL INFORMATION
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NON-CASBE FINANCIAL MEASURE
To supplement our consolidated financial statements, we also use EBITDA (non-CASBE
measure) in evaluating our operating results, which is not required by or presented in
accordance with CASBE as an additional financial measure to supplement our historical
financial information as set forth in the Accountants’ Report in Appendix I to this prospectus.
We believe that the non-CASBE measure provides useful information to investors and others
in understanding and evaluating our results of operations in the same manner as they help our
management. However, our presentation of EBITDA (non-CASBE measure) may not be
comparable to similarly titled measures presented by other companies. The use of such
non-CASBE measures has limitations as an analytical tool, and you should not consider it in
isolation from, or as a substitute for an analysis of, our results of operations or financial
condition as reported under CASBE.
We define EBITDA (non-CASBE measure) as net profit/(loss) adjusted by adding back (i)
income tax credits, (ii) interest expenses, and (iii) depreciation and amortization, and interest
income. The following table sets forth our EBITDA (non-CASBE measure) :
Y ear ended December 31,
Nine months ended
September 30,
2022 2023 2024 2024 2025
(RMB in millions, except for percentages)
(Unaudited)
Reconciliation of net
profit/(loss) to EBITDA
(non-CASBE measure )
Net profit/(loss) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111814,933.4 (4,167.9) 18,925.0 11,245.7 15,112.1
Add:
— Income tax credits /H1118/H1118/H1118/H1118/H1118/H1118(3.4) (2.2) (28.6) (32.3) (15.7)
— Interest expenses /H1118/H1118/H1118/H1118/H1118/H1118/H11182,889.9 3,239.4 3,177.5 2,430.1 2,024.7
— Depreciation and
amortization /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111812,131.7 13,534.7 15,108.9 11,204.3 11,506.4
— Interest income /H1118/H1118/H1118/H1118/H1118/H1118/H1118(159.6) (249.8) (237.5) (184.7) (137.3)
EBITDA ( non-CASBE
measure ) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111829,792.0 12,354.2 36,945.3 24,663.1 28,490.2
EBITDA margin (non-
CASBE measure) (%) /H1118/H1118/H111823.9 11.1 26.8 25.5 25.5
FINANCIAL INFORMATION
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DESCRIPTION OF MAJOR COMPONENTS OF OUR RESULTS OF OPERATIONS
Revenue
We primarily generate revenue from the sales of products in (i) the hog business and (ii)
the slaughtering and meat product business. During the Track Record Period, revenue from the
hog business accounted for a majority of our total revenue. In 2022, 2023, 2024 and the nine
months ended September 30, 2024 and 2025, we derived 95.9%, 97.6%, 98.7%, 98.5% and
98.0% of our total revenue from the hog business (before inter-segment elimination),
respectively.
We started our slaughtering and meat product business in 2019. We offer meat products
which primarily include carcasses, pork cuts and by-products. Our slaughtering and meat
product business benefits from a reliable supply of our self-produced finished hogs. We believe
that establishing the slaughtering and meat product business is an organic development from
our hog business, allowing us to capture greater market opportunities along the value chain,
despite the higher margins from direct sales of hogs during the Track Record Period. Our
strategic decision to expand into the slaughtering and meat product business was primarily
because (i) our integrated operation model creates a closed-loop value chain, significantly
improving operational efficiency, cost control, and product traceability from farm to
end-product; (ii) it allows us to directly meet the growing consumer and retail demand for
chilled, pre-packaged and branded pork products, which enjoys higher profit margin; and (iii)
it is consistent with national policies advocating for vertical integration in the industry.
FINANCIAL INFORMATION
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Revenue by Business Segment
The following table sets forth a breakdown of our revenue by business segment, in
absolute amounts and as percentages of our total revenue, for the periods indicated:
Y ear ended December 31, Nine months ended September 30,
2022 2023 2024 2024 2025
Amount % Amount % Amount % Amount % Amount %
(RMB in millions, except for percentages)
(Unaudited)
Hog business /H1118/H1118/H1118/H1118/H1118/H1118/H1118119,744.0 95.9 108,224.3 97.6 136,229.3 98.7 95,356.7 98.5 109,516.0 98.0
— Finished hogs /H1118/H1118/H1118/H1118/H1118115,896.5 92.8 106,975.5 96.5 131,306.7 95.2 91,096.0 94.1 103,391.1 92.5
— Piglets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,860.1 2.3 705.6 0.6 3,080.0 2.2 2,639.4 2.7 4,872.0 4.4
— Breeding hogs /H1118/H1118/H1118/H1118/H1118987.4 0.8 543.2 0.5 1,842.6 1.3 1,621.3 1.7 1,252.9 1.1
Slaughtering and meat
product business /H1118/H1118/H111814,718.1 11.8 21,862.3 19.7 24,273.6 17.6 15,881.0 16.4 31,812.7 28.5
Inter-segment
elimination (1) /H1118/H1118/H1118/H1118/H1118(15,634.2) (12.5) (22,793.0) (20.5) (24,435.8) (17.7) (15,632.4) (16.1) (32,708.6) (29.3)
Subtotal /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118118,827.9 95.2 107,293.6 96.8 136,067.1 98.6 95,605.3 98.8 108,620.1 97.2
Others (2) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185,998.3 4.8 3,567.1 3.2 1,879.8 1.4 1,169.8 1.2 3,169.9 2.8
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118124,826.2 100.0 110,860.7 100.0 137,946.9 100.0 96,775.1 100.0 111,790.0 100.0
Notes:
(1) The amounts of inter-segment elimination during the Track Record Period indicated the elimination of revenue
arising from the intra-group sales transactions between the hog business and the slaughtering and meat product
business. In accordance with relevant PRC tax laws and regulations, the revenue from our hog business is
exempt from V A T, whilst our slaughtering and meat product business is entitled to input V A T in relation to its
procurement of hogs. As such, the corresponding operating costs in relation to our slaughtering and meat
product business are recorded based on the sales amount of these intra-group transactions after deducting input
VAT.
(2) Others mainly comprise revenue from feed ingredients trading mainly including corn, wheat and soybean meal,
and other operating activities such as sales of feed and pig manure.
FINANCIAL INFORMATION
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The following table sets forth a breakdown of our sales volume and average selling price
(excluding tax) by product type under each business segment for the periods indicated:
Y ear ended December 31, Nine months ended September 30,
2022 2023 2024 2024 2025
Sales
Volume
Average
Selling
Price
Sales
Volume
Average
Selling
Price
Sales
Volume
Average
Selling
Price
Sales
Volume
Average
Selling
Price
Sales
Volume
Average
Selling
Price
(thousand)
(RMB per
head/ton) (thousand)
(RMB per
head/ton) (thousand)
(RMB per
head/ton) (thousand)
(RMB per
head/ton) (thousand)
(RMB per
head/ton)
Hog business (heads) /H1118 61,201 1,956.6 63,816 1,695.9 71,602 1,902.6 50,144 1,901.7 69,234 1,581.8
— Finished hogs (1) /H1118/H1118/H111855,296 2,095.9 62,267 1,718.0 65,477 2,005.4 45,132 2,018.4 57,323 1,803.7
— Piglets /H1118/H1118/H1118/H1118/H1118/H1118/H11185,558 514.5 1,367 516.2 5,659 544.2 4,607 572.9 11,571 421.0
— Breeding hogs /H1118/H1118/H1118/H1118346 2,854.4 181 2,997.8 465 3,961.2 405 3,999.8 340 3,687.4
Slaughtering and meat
product business
(tons) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118757 19,443.9 1,405 15,563.4 1,416 17,143.5 916 17,330.8 2,144 14,835.1
Note:
(1) The sales of finished hogs include the internal sales of finished hogs to our slaughtering and meat product
business, which amounted to 7,368 thousand heads, 13,266 thousand heads, 12,565 thousand heads, 7,977
thousand heads and 19,135 thousand heads in 2022, 2023, 2024 and the nine months ended September 30, 2024
and 2025, respectively.
Revenue by Geographical Region
The following table sets forth a breakdown of our revenue by geographical region, in
absolute amounts and as percentages of our total revenue, for the periods indicated:
Y ear ended December 31, Nine months ended September 30,
2022 2023 2024 2024 2025
Amount % Amount % Amount % Amount % Amount %
(RMB in millions, except for percentages)
(Unaudited)
PRC /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118124,826.2 100.0 110,860.7 100.0 137,946.9 100.0 96,775.1 100.0 111,786.0 100.0
Others (1) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–– –– –– –– 4 . 0 0 . 0
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118124,826.2 100.0 110,860.7 100.0 137,946.9 100.0 96,775.1 100.0 111,790.0 100.0
Note:
(1) Other geographical regions primarily refer to Vietnam, which was related to the provision of service and sales
of equipment to a local hog farming operator.
FINANCIAL INFORMATION
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Operating Costs
Our operating costs mainly include (i) feed costs, (ii) employee remuneration and (iii)
depreciation expenses.
The following table sets forth the operating costs by nature, in absolute amounts and as
percentages of our operating costs, for the periods indicated:
Y ear ended December 31, Nine months ended September 30,
2022 2023 2024 2024 2025
Amount % Amount % Amount % Amount % Amount %
(RMB in millions, except for percentages)
(Unaudited)
Feed costs /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111861,418.6 59.6 66,489.5 61.9 66,587.8 59.6 47,584.7 59.4 53,170.6 58.5
Employee remuneration /H1118/H111811,696.9 11.4 12,001.3 11.2 13,141.7 11.8 9,199.1 11.5 11,720.6 12.9
Depreciation expenses (1) /H1118 11,435.0 11.1 12,394.8 11.5 14,488.9 13.0 10,397.9 13.0 12,043.1 13.3
Medicines and vaccines
expenditures /H1118/H1118/H1118/H1118/H1118/H11185,007.9 4.9 5,554.9 5.2 5,709.8 5.1 4,083.7 5.1 3,870.2 4.3
Fuel and energy expenses /H1118 2,868.4 2.8 2,948.8 2.7 3,457.2 3.1 2,445.2 3.1 3,495.4 3.8
Others (2) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111810,560.3 10.2 8,025.5 7.5 8,281.1 7.4 6,354.8 7.9 6,555.6 7.2
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118102,987.1 100.0 107,414.8 100.0 111,666.5 100.0 80,065.4 100.0 90,855.5 100.0
Notes:
(1) Depreciation expenses mainly relate to depreciation cost of fixed assets, which include plants & buildings,
machinery & equipment and motor vehicles, as well as depreciation of breeding hogs.
(2) Others mainly include maintenance fees and other miscellaneous costs.
FINANCIAL INFORMATION
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Gross Profit and Gross Margin
The following table sets forth a breakdown of our gross profit and gross margin by
business segment for the periods indicated:
Y ear ended December 31, Nine months ended September 30,
2022 2023 2024 2024 2025
Gross
Profit
Gross
Margin
(%)
Gross
Profit
Gross
Margin
(%)
Gross
Profit
Gross
Margin
(%)
Gross
Profit
Gross
Margin
(%)
Gross
Profit
Gross
Margin
(%)
(RMB in millions, except for percentages)
(Unaudited)
Hog business /H1118/H1118/H1118/H1118/H1118/H1118/H111822,056.7 18.4 3,163.6 2.9 26,165.4 19.2 16,847.9 17.7 20,193.8 18.4
Finished hogs /H1118/H1118/H1118/H1118/H1118/H1118/H111820,948.7 18.1 2,903.7 2.7 24,637.1 18.8 15,402.8 16.9 18,864.8 18.2
Piglets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118809.6 28.3 159.8 22.6 1,051.5 34.1 1,012.5 38.4 1,077.3 22.1
Breeding hogs /H1118/H1118/H1118/H1118/H1118/H1118/H1118298.4 30.2 100.1 18.4 476.8 25.9 432.6 26.7 251.7 20.1
Slaughtering and meat
product business (1) /H1118/H1118/H1118(73.5) (0.5) (2) 35.5 0.2 249.1 1.0 29.6 0.2 711.6 2.2
Inter-segment
elimination (3) /H1118/H1118/H1118/H1118/H1118/H1118(266.8) 1.7 269.3 (1.2) (141.3) 0.6 (147.7) 0.9 (53.9) 0.2
Others (4) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118122.7 2.0 (22.5) (0.6) 7.2 0.4 (20.1) (1.7) 83.0 2.6
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111821,839.1 17.5 3,445.9 3.1 26,280.4 19.1 16,709.7 17.3 20,934.5 18.7
Notes:
(1) The gross profit margin of the slaughtering and meat product business is calculated based on the cost of hogs
purchased from our hog business, which is in line with industry practice and is fair and reasonable to present
the gross profit margin of our slaughtering and meat product business, according to Frost & Sullivan.
(2) The gross loss margin of the slaughtering and meat product business in 2022 was mainly attributable to
relatively high production costs during the initial ramp-up phase.
(3) The amounts of inter-segment elimination during the Track Record Period indicated the elimination of gross
profit arising from the intra-group sales transactions between the hog business and the slaughtering and meat
product business. We recorded a gain for inter-segment elimination in 2023, mainly attributable to a decrease
in market prices of hogs, which resulted in a decrease in gross profit for the hog business. In 2022 and 2024,
with the increase of market price of hogs, the inter-segment elimination actually represents profit. However,
it show as loss within finished hog business due to less inter-segment elimination.
(4) Others mainly include gross profit of feed ingredients trading and other operating activities.
FINANCIAL INFORMATION
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Taxes and Surcharges
Our taxes and surcharges primarily include (i) real estate tax, (ii) land use tax and (iii)
stamp duty. In 2022, 2023, 2024 and the nine months ended September 30, 2024 and 2025, our
taxes and surcharges amounted to RMB185.3 million, RMB189.5 million, RMB223.2 million,
RMB162.3 million and RMB202.6 million, respectively.
Selling and Distribution Expenses
Our selling and distribution expenses primarily include (i) employee remuneration, (ii)
depreciation expenses and (iii) fuel and energy expenses. In 2022, 2023, 2024 and the nine
months ended September 30, 2024 and 2025, our selling and distribution expenses amounted
to RMB758.7 million, RMB982.6 million, RMB1,095.7 million, RMB789.2 million and
RMB943.7 million, respectively.
The following table sets forth a breakdown of our selling and distribution expenses by
nature, in absolute amounts and as percentages of our total selling and distribution expenses,
for the periods indicated:
Y ear ended December 31, Nine months ended September 30,
2022 2023 2024 2024 2025
Amount % Amount % Amount % Amount % Amount %
(RMB in millions, except for percentages)
(Unaudited)
Employee remuneration /H1118/H1118 429.0 56.5 645.7 65.7 761.6 69.5 548.1 69.5 669.0 70.9
Depreciation expenses /H1118/H1118 110.6 14.6 127.5 13.0 128.2 11.7 95.9 12.1 100.7 10.7
Fuel and energy
expenses (1) /H1118/H1118/H1118/H1118/H1118/H1118/H111891.3 12.0 89.9 9.2 78.1 7.1 58.4 7.4 68.1 7.2
Testing fees (2) /H1118/H1118/H1118/H1118/H1118/H111833.9 4.5 17.7 1.8 17.4 1.6 13.0 1.7 15.0 1.6
Material consumption
cost /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111825.7 3.4 18.7 1.9 9.3 0.9 5.7 0.7 6.8 0.7
Lease expenses /H1118/H1118/H1118/H1118/H1118/H11187.4 1.0 6.1 0.6 5.5 0.5 3.9 0.5 5.4 0.6
Others (3) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111860.8 8.0 77 7.8 95.6 8.7 64.2 8.1 78.7 8.3
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118758.7 100.0 982.6 100.0 1,095.7 100.0 789.2 100.0 943.7 100.0
Notes:
(1) Fuel and energy expenses mainly relate to utility expenses and fuel consumed for our sterilization stations.
(2) Testing fees mainly relate to inspection and quarantine.
(3) Others primarily include vehicle expenses, business development expenses, travel expenses and office
expenses.
FINANCIAL INFORMATION
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--- page 376 ---
Our lease expenses amounted to RMB7.4 million, RMB6.1 million, RMB5.5 million,
RMB3.9 million and RMB5.4 million, which account for 1.0%, 0.6%, 0.5%, 0.5% and 0.6% of
our selling and distribution expenses for 2022, 2023, and 2024, and the nine months ended
September 30, 2024 and 2025, respectively. Such lease expenses had negligible impact on
overall financial performance during the Track Record Period.
General and Administrative Expenses
Our general and administrative expenses primarily include (i) employee remuneration,
(ii) share-based payment expenses and (iii) insurance expenses. In 2022, 2023, 2024 and the
nine months ended September 30, 2024 and 2025, our general and administrative expenses
amounted to RMB4,201.4 million, RMB3,876.3 million, RMB3,331.7 million, RMB2,688.3
million and RMB2,741.5 million, respectively.
The following table sets forth a breakdown of our general and administrative expenses by
nature, in absolute amounts and as percentages of our total general and administrative
expenses, for the periods indicated:
Y ear ended December 31, Nine months ended September 30,
2022 2023 2024 2024 2025
Amount % Amount % Amount % Amount % Amount %
(RMB in millions, except for percentages)
(Unaudited)
Employee remuneration /H1118/H11181,315.7 31.3 1,360.7 35.1 1,285.4 38.6 910.2 33.9 1,061.1 38.7
Share-based payment
expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118850.0 20.2 344.0 8.9 35.6 1.1 35.6 1.3 71.7 2.6
Insurance expenses /H1118/H1118/H1118/H1118789.0 18.8 791.0 20.4 658.2 19.8 733.6 27.3 568.0 20.7
Depreciation and
amortization expenses /H1118 391.4 9.3 449.6 11.6 485.1 14.6 369.7 13.8 339.1 12.4
Business development
expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118283.6 6.8 311.7 8.0 278.2 8.3 227.6 8.5 208.8 7.6
Office expenses /H1118/H1118/H1118/H1118/H1118/H1118195.4 4.7 202.9 5.2 159.1 4.8 119.7 4.5 141.7 5.2
Service expenses /H1118/H1118/H1118/H1118/H1118109.9 2.6 141.6 3.7 143.7 4.3 99.1 3.6 105.1 3.8
Others (1) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118266.4 6.3 274.8 7.1 286.4 8.5 192.8 7.1 246.0 9.0
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184,201.4 100.0 3,876.3 100.0 3,331.7 100.0 2,688.3 100.0 2,741.5 100.0
Note:
(1) Others mainly include vehicle expenses, travel expenses and property management fees.
FINANCIAL INFORMATION
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--- page 377 ---
Research and Development Expenses
Our research and development expenses primarily include (i) employee remuneration, (ii)
R&D material consumption expenses and (iii) service expenses. In 2022, 2023, 2024 and the
nine months ended September 30, 2024 and 2025, our R&D expenses amounted to
RMB1,142.4 million, RMB1,657.7 million, RMB1,747.2 million, RMB1,267.6 million and
RMB1,263.3 million, respectively.
The following table sets forth a breakdown of our research and development expenses by
nature, in absolute amounts and as percentages of our total research and development expenses,
for the periods indicated:
Y ear ended December 31, Nine months ended September 30,
2022 2023 2024 2024 2025
Amount % Amount % Amount % Amount % Amount %
(RMB in millions, except for percentages)
(Unaudited)
Employee remuneration /H1118/H1118 842.7 73.8 957.6 57.8 946.1 54.2 720.1 56.8 691.9 54.8
R&D material
consumption expenses /H1118 229.8 20.1 543.0 32.8 507.0 29.0 383.6 30.3 322.1 25.5
Service expenses (1) /H1118/H1118/H1118/H111828.6 2.5 96.9 5.8 184.0 10.5 86.4 6.8 144.0 11.4
Depreciation and
amortization expenses /H1118 23.7 2.1 24.4 1.5 53.1 3.0 38.8 3.1 48.7 3.9
Others (2) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111817.6 1.5 35.8 2.1 57.0 3.3 38.7 3.0 56.6 4.4
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,142.4 100.0 1,657.7 100.0 1,747.2 100.0 1,267.6 100.0 1,263.3 100.0
Notes:
(1) Service expenses mainly relate to external technical services for precision livestock management and
information platform service for smart farming.
(2) Others mainly include travel expenses, vehicle expenses and testing fees.
Financial Expenses
Our financial expenses primarily include interest expenses on loans and debentures. In
2022, 2023, 2024 and the nine months ended September 30, 2024 and 2025, our financial
expenses amounted to RMB2,907.7 million, RMB3,054.1 million, RMB2,975.4 million,
RMB2,285.1 million and RMB1,951.0 million, respectively.
FINANCIAL INFORMATION
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--- page 378 ---
The following table sets forth a breakdown of our financial expenses by nature, in
absolute amounts and as percentages of our total financial expenses, for the periods indicated:
Y ear ended December 31, Nine months ended September 30,
2022 2023 2024 2024 2025
Amount % Amount % Amount % Amount % Amount %
(RMB in millions, except for percentages)
(Unaudited)
Interest expenses on loans
and debentures /H1118/H1118/H1118/H1118/H11182,457.7 84.5 2,772.0 90.8 2,727.3 91.7 2,084.6 91.2 1,773.7 90.9
Interest expenses on lease
liabilities and long-term
payables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118432.2 14.9 467.3 15.3 450.1 15.1 345.5 15.1 251.0 12.9
Net exchange
losses/(gains) /H1118/H1118/H1118/H1118/H1118/H1118133.0 4.6 30.2 1.0 (11.8) (0.4) (1.3) (0.1) 22.9 1.2
Less: Interest income /H1118/H1118/H1118(159.6) (5.5) (249.8) (8.2) (237.5) (8.0) (184.7) (8.1) (137.3) (7.0)
Others /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111844.4 1.5 34.4 1.1 47.3 1.6 41.0 1.9 40.7 2.0
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,907.7 100.0 3,054.1 100.0 2,975.4 100.0 2,285.1 100.0 1,951.0 100.0
Other Income
Our other income includes (i) grants related to daily business activities, which were
mainly unconditional and one-off in nature (ii) refund of charges for withholding individual
income tax and (iii) other tax reliefs. The grants related to daily business activities mainly
relate to our hog business, including insurance subsidy, subsidy for the construction or
environmental protection of hog farming plants, and subsidy for harmless disposal of hogs. The
following table sets forth a breakdown of our other income, in absolute amounts and as
percentages of our total other income, for the periods indicated:
Y ear ended December 31, Nine months ended September 30,
2022 2023 2024 2024 2025
Amount % Amount % Amount % Amount % Amount %
(RMB in millions, except for percentages)
(Unaudited)
Grants related to daily
business activities /H1118/H1118/H11182,167.9 99.1 2,776.4 99.0 2,992.7 99.4 2,537.0 99.4 2,012.6 99.2
Refund of charges for
withholding individual
income tax /H1118/H1118/H1118/H1118/H1118/H1118/H111812.4 0.6 16.9 0.6 10.0 0.3 9.9 0.4 9.7 0.5
Other tax reliefs /H1118/H1118/H1118/H1118/H11188.3 0.3 12.3 0.4 7.7 0.3 5.5 0.2 6.4 0.3
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,188.6 100.0 2,805.6 100.0 3,010.4 100.0 2,552.4 100.0 2,028.7 100.0
FINANCIAL INFORMATION
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Investment Income/(losses)
Our investment income/(losses) primarily include (i) investment income/(losses) from
long-term equity investments accounted for using equity method and (ii) investment income
from purchasing wealth management products. The following table sets forth a breakdown of
our investment income/(losses) for the periods indicated:
Y ear ended December 31,
Nine months ended
September 30,
2022 2023 2024 2024 2025
(RMB in millions)
(Unaudited)
Investment income/(losses)
from long-term equity
investments accounted for
using the equity method /H1118/H1118/H111846.1 (22.0) 72.2 37.5 62.4
Investment income from
financial wealth
management products /H1118/H1118/H1118/H1118/H11181.0 7.4 41.1 14.7 33.7
Others /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(0.2) 8.2 (13.7) (10.0) (0.3)
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111846.9 (6.4) 99.6 42.2 95.8
Gains/(losses) from Changes in Fair Value
Our gains/(losses) from changes in fair value were mainly related to futures products that
we purchased to hedge price risks such as decreasing hog prices. In 2022, 2023 and 2024, we
recorded gains from changes in fair value of nil, nil and RMB0.1 million, respectively. We
recorded losses from changes in fair value of RMB1.4 million in the nine months ended
September 30, 2024, which was subsequently reversed to gains from changes in fair value of
RMB6.0 million in the nine months ended September 30, 2025.
Credit (Losses)/reversal
We recorded expected credit losses on accounts receivable and other receivables. We
recorded credit losses on accounts receivable and other receivables which amounted to
RMB23.1 million and RMB4.2 million in 2022 and 2023, respectively. Such credit losses were
subsequently reversed to a credit reversal of RMB0.3 million in 2024. We recorded a credit
reversal of RMB9.2 million in the nine months ended September 30, 2024, which subsequently
reversed to credit losses of RMB13.0 million in the same period of 2025.
FINANCIAL INFORMATION
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--- page 380 ---
Impairment Losses
We recorded expected impairment losses mainly on inventories of consumable biological
assets and finished goods. Consumable biological assets mainly include our suckling piglets,
piglets under nursing period and hogs under finishing period. If there is clear evidence that the
net realizable value of a consumable biological asset is lower than its carrying amount due to
reasons such as natural disasters, pest-outbreaks, diseases or changes in market conditions, a
provision for decline in value in respect of that biological asset shall be recognized and charged
to profit or loss for the current period. The provision amount is the difference between the
carrying amount and the net realizable value. We recorded impairment losses of nil, RMB202.5
million, RMB12.9 million, RMB12.5 million and RMB2.9 million in 2022, 2023, 2024 and the
nine months ended September 30, 2024 and 2025, respectively. Our impairment losses of
RMB202.5 million in 2023 were mainly attributable to provision for meat products and live
hogs in 2023 as the cost of consumable biological assets exceeded their net realizable value
driven by the low market selling price of live hogs in the same year.
(Losses)/gains from Assets Disposals
Our (losses)/gains from assets disposals were mainly related to the disposal of
non-current assets. In 2022 and 2023, we recorded losses from assets disposals of RMB2.3
million and RMB10.1 million, respectively, which was subsequently reversed to gains from
assets disposals of RMB5.8 million in 2024. In the nine months ended September 30, 2024 and
2025, we recorded gains from assets disposals of RMB7.5 million and RMB1.8 million,
respectively.
Non-Operating Income
Our non-operating income includes (i) grants, which mainly include financial subsidies
that are unrelated to our daily business operations, (ii) gains from disposal of non-current
assets, and (iii) others, which mainly include gains from sales of scrapped materials and
compensation gains from contractual breach by customers. In 2022, 2023, 2024 and the nine
months ended September 30, 2024 and 2025, our non-operating income amounted to
RMB376.9 million, RMB157.2 million, RMB84.4 million, RMB64.4 million and RMB82.2
million, respectively.
Non-Operating Expenses
Our non-operating expenses mainly represent (i) donations and (ii) losses from damage
or scrapping of non-current assets. In 2022, 2023, 2024 and the nine months ended September
30, 2024 and 2025, our non-operating expenses amounted to RMB300.6 million, RMB595.4
million, RMB1,198.5 million, RMB965.6 million and RMB934.6 million, respectively.
FINANCIAL INFORMATION
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Income Tax Credits
In 2022, 2023, 2024 and the nine months ended September 30, 2024 and 2025, our income
tax credits amounted to RMB3.4 million, RMB2.2 million, RMB28.6 million, RMB32.3
million and RMB15.7 million, respectively. See Note IV .54 to the Accountants’ Report in
Appendix I to this prospectus.
PRC
Under the EIT Law and Implementation Regulation of the EIT Law, the EIT rate of our
Company and our PRC subsidiaries is 25% unless subject to tax exemption set out below.
Pursuant to the EIT Law and the Implementation Regulations for the EIT Law, during the
Track Record Period, our income derived from hog farming, as well as hog slaughtering, were
exempted from enterprise income tax.
Our subsidiary, Henan Muyuan Smart Technology Co., Ltd., obtained the high-tech
enterprise certification on December 1, 2022 with a validity period of three years. According
to the preferential tax policies for high-tech enterprises in the EIT Law, the applicable
enterprise income tax rate of Henan Muyuan Smart Technology Co., Ltd. is 15% during each
of the years ended 31 December 2022, 2023 and 2024. The Directors are of the view that Henan
Muyuan Smart Technology Co., Ltd. is highly likely to obtain the renewal of the high-tech
enterprise certification. Therefore, for the nine months ended 30 September 2025, Henan
Muyuan Smart Technology Co., Ltd. has pre-paid income tax at tax rate of 15%.
In accordance with the Announcement on Further Implementing Preferential Income Tax
Policies for Small and Micro Enterprises (Announcement [2022] No. 13), the Announcement
on Income Tax Preferences for Small and Micro Enterprises and Individual Businesses
(Announcement [2023] No. 6), and Announcement on Further Supporting the Development of
Small and Micro Enterprises and Individual Businesses Related to Tax and Fee Policies
(Announcement [2023] No. 12), for small and micro enterprises with an annual taxable income
less than RMB3 million, 25% of the amount is included in the taxable income, and the
applicable enterprise income tax rate is 20%. During the Track Record Period, certain
subsidiaries, namely Shenzhen Muyuan Digital Technology Co., Ltd., Zhengzhou Muyuan
Digital Technology Co., Ltd., Hubei Muxin Detection Technology Co., Ltd., Henan Muyuan
Ecology Environment Technology Co., Ltd., and Muyuan New Energy Industry Development
Co. Ltd. together with its subsidiaries, benefited from these preferential policies.
Net profit/(loss)
In 2022, we recorded net profit of RMB14,933.4 million. In 2023, we recorded net loss
of RMB4,167.9 million. In 2024, the nine months ended September 30, 2024 and 2025, we
recorded net profit of RMB18,925.0 million, RMB11,245.7 million and RMB15,112.1 million,
respectively.
FINANCIAL INFORMATION
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PERIOD-TO-PERIOD COMPARISON OF RESULTS OF OPERATIONS
Nine Months Ended September 30, 2025 Compared with Nine Months Ended September
30, 2024
Revenue
Our revenue increased by 15.5% from RMB96,775.1 million in the nine months ended
September 30, 2024 to RMB111,790.0 million in the same period of 2025, primarily due to an
increase in revenue from the slaughtering and meat product business and the hog business.
 Our revenue from the hog business increased by 14.8% from RMB95,356.7 million
in the nine months ended September 30, 2024 to RMB109,516.0 million in the same
period of 2025, primarily due to an increase in sales volume of our hogs, including
finished hogs and piglets partially offset by a decrease in average selling price of
finished hogs. The number of finished hogs sold increased from 45,132 thousand
heads in the nine months ended September 30, 2024 to 57,323 thousand heads in the
same period of 2025, primarily due to the enhanced production efficiency, which
was underpinned by our enhanced breeding technologies. The enhanced production
efficiency results in higher PSY , and the higher number of finished hogs produced
by the breeding herd results in the increase in sales volume. According to Frost &
Sullivan, our average PSY and survival rate continued to outperform the industry
average in the nine months ended September 30, 2025. The number of piglets sold
also increased from 4,606.7 thousand heads in the nine months ended September 30,
2024 to 11,571.3 thousand heads in the same period of 2025, which was also driven
by the enhanced production efficiency. The average selling price of finished hogs
decreased from RMB16.4 per kg (approximately RMB2,000 per head) in the nine
months ended September 30, 2024 to RMB14.2 per kg (approximately RMB1,800
per head) in the same period of 2025, primarily driven by the decrease in the market
selling prices of finished hogs. In addition, the weight per finished hog remained
relatively stable at 123.0 kg per head and 127.1 kg per head in the nine months
ended September 30, 2024 and 2025, respectively. The increase in supply of finished
hogs as a staple agricultural commodity may exert downward pressure on market
prices, but continue to be sold through established distribution channels, given its
essential nature and consistent consumption base.
According to Frost & Sullivan, the average market selling prices of finished hogs
decreased from RMB16.7 per kg (approximately RMB2,100 per head) in the nine
months ended September 30, 2024 to RMB14.6 per kg (approximately RMB1,900
per head) in the nine months ended September 30, 2025.
FINANCIAL INFORMATION
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 Our revenue from slaughtering and meat product business increased by 100.3% from
RMB15,881.0 million in the nine months ended September 30, 2024 to
RMB31,812.7 million in the same period of 2025, primarily due to an increase in
sales volume of meat products from 916.4 thousand tons in the nine months ended
September 30, 2024 to 2,144.4 thousand tons in the same period of 2025, which was
mainly attributable to (i) an increase in utilization rate from 36.7% in the nine
months ended September 30, 2024 to 88.1% in the same period of 2025, due to
improved operational efficiency and optimization of product quality; and (ii) the
expansion of our customer base. The number of new wholesale market customers
joined was 2,790 in the nine months ended September 30, 2025. According to Frost
& Sullivan, our growth rate in sales volume and utilization rate outperform the
industry average in the nine months ended September 30, 2025.
 Our revenue from other business segments increased by 171.0% from RMB1,169.8
million in the nine months ended September 30, 2024 to RMB3,169.9 million in the
same period of 2025, primarily due to (i) an increase in market prices of feed
ingredients; and (ii) an increase in sales volume of feed ingredients.
Operating Costs
Our operating costs increased by 13.5% from RMB80,065.4 million in the nine months
ended September 30, 2024 to RMB90,855.5 million in the same period of 2025, primarily due
to an increase in operating costs from our principal activities, driven by an increase in sales
volume for both the hog business and the slaughtering and meat product business.
Gross Profit and Gross Profit Margin
Our gross profit increased by 25.3% from RMB16,709.7 million in the nine months ended
September 30, 2024 to RMB20,934.5 million in the same period of 2025. Our gross profit
margin increased from 17.3% in the nine months ended September 30, 2024 to 18.7% in the
same period of 2025, primarily due to the improved gross margin for the hog business.
 The gross profit margin for the hog business increased from 17.7% in the nine
months ended September 30, 2024 to 18.4% in the same period of 2025 primarily
due to enhanced cost management measures. Our average total unit cost decreased
to RMB12.19 per kg in the nine months ended September 30, 2025.
 The gross profit margin for the slaughtering and meat product business increased
from 0.2% in the nine months ended September 30, 2024 to 2.2% in the same period
of 2025, primarily due to (i) our stronger pricing power and more refined pricing
mechanisms; (ii) optimization of product mix; (iii) continuous optimization of our
FINANCIAL INFORMATION
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slaughtering processes, resulting a significant increase in our capacity utilization
from 36.7% in the nine months ended September 30, 2024 to 88.1% in the same
period of 2025; and (iv) enhanced economies of scale from the increase in sales
volume.
 The gross loss margin for other business segments of 1.7% in the nine months ended
September 30, 2024 turned around to a gross profit margin of 2.6% in the same
period of 2025, primarily due to an increase in sales of feed with relatively higher
gross profit margin.
Selling and Distribution Expenses
Our selling and distribution expenses increased by 19.6% from RMB789.2 million in the
nine months ended September 30, 2024 to RMB943.7 million in the same period of 2025,
primarily due to an increase in employee remuneration as a result of an increase in the number
of sales personnel.
General and Administrative Expenses
Our general and administrative expenses remained relatively stable at RMB2,688.3
million and RMB2,741.5 million the nine months ended September 30, 2024 and 2025,
respectively.
Research and Development Expenses
Our research and development expenses remained relatively stable at RMB1,267.6
million and RMB1,263.3 million in the nine months ended September 30, 2024 and 2025,
respectively.
Financial Expenses
Our financial expenses decreased by 14.6% from RMB2,285.1 million in the nine months
ended September 30, 2024 to RMB1,951.0 million in the same period of 2025, primarily due
to a decrease in interest expenses on loans and debentures resulting from partial repayment.
Other Income
Our other income decreased by 20.5% from RMB2,552.4 million in the nine months
ended September 30, 2024 to RMB2,028.7 million in the same period of 2025, primarily due
to a decrease in grants related to daily business activities resulting from a decrease in hog
insurance premium subsidies.
FINANCIAL INFORMATION
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Investment Income
Our investment income increased by 127.0% from RMB42.2 million in the nine months
ended September 30, 2024 to RMB95.8 million in the same period of 2025, primarily due to
(i) an increase in investment income from long-term equity investments accounted for using the
equity method, and (ii) and increase in investment income from purchasing wealth management
products in 2025.
Credit (Losses)/reversal
We recorded credit reversal of RMB9.2 million in the nine months ended September 30,
2024, and subsequently credit losses of RMB13.0 million in the same period of 2025, primarily
due to an increase in provisions for accounts receivables in line with our business expansion.
Impairment Losses
Our impairment losses decreased by 76.8% from RMB12.5 million in the nine months
ended September 30, 2024 to RMB2.9 million in the same period of 2025, primarily due to a
decrease in provisions for inventories of meat products, as such costs no longer exceed their
net realizable value.
Gains from Assets Disposals
Our gains from assets disposals decreased by 76.0% from RMB7.5 million in the nine
months ended September 30, 2024 to RMB1.8 million in the same period of 2025, primarily
due to a decrease in gains from disposal of obsolete facilities and assets.
Non-Operating Income
Our non-operating income increased by 27.6% from RMB64.4 million in the nine months
ended September 30, 2024 to RMB82.2 million in the same period of 2025, primarily due to
an increase in compensation income arising from contractual breaches.
Non-Operating Expenses
Our non-operating expenses remained relatively stable at RMB965.6 million and
RMB934.6 million in the nine months ended September 30, 2024 and 2025, respectively.
Income Tax Credits
Our income tax credits decreased by 51.4% from RMB32.3 million in the nine months
ended September 30, 2024 to RMB15.7 million in the same period of 2025, primarily due to
an increase in tax expense for the period based on tax law and regulations, mainly due to a
significant increase in our net profit.
FINANCIAL INFORMATION
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Net Profit
As a result of the foregoing, we recorded net profit of RMB11,245.7 million and
RMB15,112.1 million in the nine months ended September 30, 2024 and 2025, respectively.
Y ear Ended December 31, 2024 Compared with Y ear Ended December 31, 2023
Revenue
Our revenue increased by 24.4% from RMB110,860.7 million in 2023 to RMB137,946.9
million in 2024 primarily due to an increase in revenue from the hog business.
 Our revenue from the hog business increased by 25.9% from RMB108,224.3 million
in 2023 to RMB136,229.3 million in 2024, primarily due to (i) an increase in market
selling prices of hogs; and (ii) an increase in sales volume of our hogs, including
finished hogs, piglets and breeding hogs alongside. The average selling price of
finished hogs increased from RMB1,718.0 per head in 2023 to RMB2,005.4 per
head in 2024, which was in line with the increase in the market selling prices of hogs
in China from RMB15.1 per kg in 2023 to RMB16.7 per kg in 2024 according to
Frost & Sullivan; and the number of finished hogs sold increased from 62,267
thousand heads in 2023 to 65,477 thousand heads in 2024, driven by our efforts to
expand our customer base. The number of new hog dealers joined was 1,439 in 2024.
 Our revenue from the slaughtering and meat product business increased by 11.0%
from RMB21,862.3 million in 2023 to RMB24,273.6 million in 2024, primarily due
to (i) an increase in market selling prices of pork products, and (ii) an increase in
sales volume of meat products. The average selling price of meat products increased
from RMB15,563.4 per ton in 2023 to RMB17,143.5 per ton in 2024, which was in
line with the increase in the market selling prices of hogs in China; and the sales
volume of meat products increased from 1,405 thousand tons in 2023 to 1,416
thousand tons in 2024, driven by our efforts to expand our customer base. The
number of new wholesale market customers joined was 2,037 in 2024.
 Our revenue from other business segments decreased by 47.3% from RMB3,567.1
million in 2023 to RMB1,879.8 million in 2024, primarily because we focused on
our principal business.
Operating Costs
Our operating costs increased by 4.0% from RMB107,414.8 million in 2023 to
RMB111,666.5 million in 2024, primarily due to (i) an increase in employee remuneration
resulting from improved remuneration package, and (ii) an increase in depreciation expenses
in line with our sales growth. The increase in operating costs was slower than revenue growth
pace in the same year, which was mainly attributable to (i) an increase in hog farming
FINANCIAL INFORMATION
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efficiency driven by breeding and nutrition management efforts, as well as equipment upgrades
and technology iterations as part of our cost management measures, and (ii) a decrease in unit
feed costs driven by a decrease in the market prices of corn, wheat and soybean meal.
Gross Profit and Gross Profit Margin
Our gross profit increased by 662.7% from RMB3,445.9 million in 2023 to RMB26,280.4
million in 2024. Our gross profit margin increased from 3.1% in 2023 to 19.1% in 2024,
primarily due to the improved gross margin for the hog business.
 The gross margin for the hog business increased from 2.9% in 2023 to 19.2% in
2024, primarily due to (i) an increase in market selling prices of hogs, (ii) cost
management measures and (iii) a decrease in unit feed costs driven by a decrease in
market prices of feed ingredients. The average selling price of finished hogs
increased from RMB1,718.0 per head in 2023 to RMB2,005.4 per head in 2024. Our
average total unit cost decreased from RMB14.94 per kg in 2023 to RMB14.01 per
kg in 2024.
 The gross margin for the slaughtering and meat product business increased from
0.2% in 2023 to 1.0% in 2024, primarily due to (i) our stronger pricing power and
enhanced pricing mechanism, (ii) continuous optimization of our slaughtering
processes and cost management efforts, and (iii) enhanced economies of scale from
the increase in sales volume.
 The gross margin for other business segments remained relatively stable at gross
margin of (0.6)% and 0.4% in 2023 and 2024, respectively.
Selling and Distribution Expenses
Our selling and distribution expenses increased by 11.5% from RMB982.6 million in
2023 to RMB1,095.7 million in 2024, primarily due to an increase in employee remuneration
as the number of sales personnel increased from 5,668 as of December 31, 2023 to 5,998 as
of December 31, 2024.
General and Administrative Expenses
Our general and administrative expenses decreased by 14.0% from RMB3,876.3 million
in 2023 to RMB3,331.7 million in 2024, primarily due to (i) a decrease in share-based payment
expenses and (ii) a decrease in insurance expenses.
FINANCIAL INFORMATION
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Research and Development Expenses
Our research and development expenses increased by 5.4% from RMB1,657.7 million in
2023 to RMB1,747.2 million in 2024, primarily due to (i) an increase in service expenses as
we expanded the engagement of technical services for precision livestock management and
increased the adoption of information platform services to enable smart farming, and (ii) an
increase in depreciation and amortization expenses driven by an increase in fixed assets for
R&D purpose, partially offset by a decrease in R&D material consumption expenses.
Financial Expenses
Our financial expenses remained relatively stable at RMB3,054.1 million and
RMB2,975.4 million in 2023 and 2024, respectively.
Other Income
Our other income increased by 7.3% from RMB2,805.6 million in 2023 to RMB3,010.4
million in 2024, primarily due to an increase in gains for harmless disposal of biological assets
mainly including diseased and dead hogs.
Investment Income/(losses)
We recorded investment loss of RMB6.4 million in 2023. We subsequently recorded
investment income of RMB99.6 million in 2024, primarily due to a gain from long-term equity
investment accounted for using equity method in associates.
Credit (Losses)/reversal
We recorded credit loss of RMB4.2 million in 2023. We subsequently recorded a credit
reversal of RMB0.3 million in 2024, primarily due to the settlement of certain receivables.
Impairment Losses
Our impairment losses decreased by 93.6% from RMB202.5 million in 2023 to RMB12.9
million in 2024, primarily due to a decrease in provisions for inventories, mainly consumable
biological assets, as such costs no longer exceeding their net realizable value when market
selling prices of hogs increased.
(Losses)/gains from Assets Disposals
We recorded losses from assets disposals of RMB10.1 million in 2023. We subsequently
recorded a gain of RMB5.8 million in 2024, primarily due to the proceeds from the disposal
of obsolete facilities and assets.
FINANCIAL INFORMATION
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Non-Operating Income
Non-operating income decreased by 46.3% from RMB157.2 million in 2023 to RMB84.4
million in 2024, primarily due to (i) a decrease in gains from sales of scrapped materials, and
(ii) a decrease in compensation gains arising from contractual breaches.
Non-Operating Expenses
Non-operating expenses increased by 101.3% from RMB595.4 million in 2023 to
RMB1,198.5 million in 2024, primarily due to an increase in the disposal losses from damage
or scrapping of non-current assets upon demolition of such assets.
Income Tax Credits
Our income tax credits increased by 1,200.0% from RMB2.2 million in 2023 to RMB28.6
million in 2024, primarily due to an increase in the change of deferred tax assets resulting from
the deductible tax losses recorded by certain non-tax-exempt subsidiaries in 2024.
Net Profit/(loss)
As a result of the foregoing, we recorded net loss of RMB4,167.9 million in 2023 and net
profit of RMB18,925.0 million in 2024, respectively.
Y ear Ended December 31, 2023 Compared with Y ear Ended December 31, 2022
Revenue
Our revenue decreased by 11.2% from RMB124,826.2 million in 2022 to RMB110,860.7
million in 2023 primarily due to a decrease in sales in the hog business.
 Our revenue from the hog business decreased by 9.6% from RMB119,744.0 million
in 2022 to RMB108,224.3 million in 2023, primarily due to a decrease in market
selling prices of finished hogs, partially offset by an increase in sales volume. The
average selling price of finished hogs decreased from RMB2,095.9 per head in 2022
to RMB1,718.0 per head in 2023, which was in line with the decrease in the market
selling prices of hogs in China from RMB18.5 per kg in 2022 to RMB15.1 per kg
in 2023 according to Frost & Sullivan. The number of finished hogs sold increased
from 55,296 thousand heads in 2022 to 62,267 thousand heads in 2023, driven by
our efforts to refine our customer base. The number of new hog dealers joined was
573 in 2023.
FINANCIAL INFORMATION
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 Our revenue from the slaughtering and meat product business increased by 48.5%
from RMB14,718.1 million in 2022 to RMB21,862.3 million in 2023, primarily due
to an increase in sales volume of meat products, as we continued to ramp up this
business by expanding sales channels and diversifying our direct sales. The sales
volume of meat products increased from 757 thousand tons in 2022 to 1,405
thousand tons in 2023, driven by our efforts to refine our customer base. The number
of new wholesale market customers joined was 1,982 in 2023.
 Our revenue from other business segment decreased by 40.5% from RMB5,998.3
million in 2022 to RMB3,567.1 million in 2023, primarily because we focused on
our principal business.
Operating Costs
Our operating costs increased by 4.3% from RMB102,987.1 million in 2022 to
RMB107,414.8 million in 2023, primarily due to an increase in our feed costs from
RMB61,418.6 million in 2022 to RMB66,489.5 million in 2023, driven by an increase in sales
volume of finished hogs. However, our average total unit cost decreased from RMB15.72 per
kg in 2022 to RMB14.94 per kg in 2023 benefitting from our efforts in cost management.
Gross Profit and Gross Profit Margin
Our gross profit decreased by 84.2% from RMB21,839.1 million in 2022 to RMB3,445.9
million in 2023. Our gross profit margin decreased from 17.5% in 2022 to 3.1% in 2023,
primarily due to a decrease in the gross margin for the hog business.
 The gross margin for the hog business decreased from 18.4% in 2022 to 2.9% in
2023, primarily due to a decrease in market selling prices of hogs from RMB18.5 per
kg in 2022 to RMB15.1 per kg with the hog prices in downswing in 2023, partially
offset by our continuous efforts in cost management, resulting in a decrease in
average total unit cost from RMB15.72 per kg in 2022 to RMB14.94 per kg in 2023.
 The gross margin for the slaughtering and meat product business improved from
gross loss margin of 0.5% in 2022 to gross profit margin of 0.2% in 2023, primarily
due to (i) an increase in sales volume of meat products resulting in an improved
utilization rate from 25.4% in 2022 to 45.7% in 2023 and enhanced economies of
scale, and (ii) continuous optimization of our slaughtering processes by adopting
new machineries and technologies. The gross loss margin for the slaughtering and
meat product business of 0.5% in 2022 was mainly attributable to relatively high
production costs during the initial ramp-up phase.
 The gross margin for other business segments decreased from gross profit margin of
2.0% in 2022 to gross loss margin of 0.6% in 2023, primarily due to a decrease in
market prices of feed ingredients.
FINANCIAL INFORMATION
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Selling and Distribution Expenses
Our selling and distribution expenses increased by 29.5% from RMB758.7 million in
2022 to RMB982.6 million in 2023, primarily due to an increase in employee remuneration as
the number of sales personnel increased.
General and Administrative Expenses
Our general and administrative expenses decreased by 7.7% from RMB4,201.4 million in
2022 to RMB3,876.3 million in 2023, primarily due to a decrease in share-based payment
expenses, partially offset by (i) an increase in employee remuneration as we optimized salary
structures, and (ii) an increase in depreciation and amortization expenses resulting from an
increase in fixed assets.
Research and Development Expenses
Our research and development expenses increased by 45.1% from RMB1,142.4 million in
2022 to RMB1,657.7 million in 2023, primarily due to (i) an increase in employee
remuneration, as we expanded our R&D team, and (ii) an increase in R&D material
consumption expenses, which mainly include the raw materials and disease detection materials
required for animal disease prevention research and development projects.
Financial Expenses
Our financial expenses increased by 5.0% from RMB2,907.7 million in 2022 to
RMB3,054.1 million in 2023, primarily due to an increase in interest expenses on loans and
debentures, partially offset by a decrease in net exchange losses, which mainly relate to the
settlement of loans and letters of credits in foreign currency.
Other Income
Our other income increased by 28.2% from RMB2,188.6 million in 2022 to RMB2,805.6
million in 2023, primarily due to an increase in grants related to daily business activities as our
hog business operations expanded.
Investment Income/(losses)
Our investment income of RMB46.9 million in 2022. We subsequently recorded an
investment loss of RMB6.4 million in 2023, primarily due to a loss from long-term equity
investment accounted for using equity method in associates, partially offset by the investment
income from purchasing wealth management products.
FINANCIAL INFORMATION
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Credit Losses
Our credit losses decreased by 81.8% from RMB23.1 million in 2022 to RMB4.2 million
in 2023, primarily due to credit reversals for other receivables, partially offset by an increase
in provisions for accounts receivables.
Impairment Losses
Our impairment losses increased from nil in 2022 to RMB202.5 million in 2023,
primarily due to the impairment on consumable biological assets as their costs exceeded net
realizable value in light of low market selling prices of hogs.
Losses from Assets Disposals
Our losses from assets disposals increased by 339.1% from RMB2.3 million in 2022 to
RMB10.1 million in 2023, primarily due to the disposal of obsolete facilities and assets.
Non-Operating Income
Non-operating income decreased by 58.3% from RMB376.9 million in 2022 to
RMB157.2 million in 2023, primarily due to a decrease in grants.
Non-Operating Expenses
Non-operating expenses increased by 98.1% from RMB300.6 million in 2022 to
RMB595.4 million in 2023, primarily due to (i) an increase in the disposal loss from damage
or scrapping of non-current assets upon demolition of such assets, and (ii) an increase in
donations.
Income Tax Credits
Our income tax credits decreased by 35.3% from RMB3.4 million in 2022 to RMB2.2
million in 2023, primarily due to a decrease in the change of deferred tax assets, which was
resulted from a decrease in the deductible tax losses recorded by certain non-tax-exempt
subsidiaries.
Net Profit/(loss)
As a result of the foregoing, we recorded net profit of RMB14,933.4 million in 2022 and
net loss of RMB4,167.9 million in 2023.
FINANCIAL INFORMATION
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DISCUSSION OF KEY ITEMS OF CONSOLIDATED BALANCE SHEET
The following table sets forth selected information from our summary consolidated
balance sheet as of the dates indicated, which has been extracted from our audited consolidated
financial statements included in Appendix I to this prospectus.
As of December 31,
As of
September 30,
2022 2023 2024 2025
(RMB in millions)
Total current assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111862,578.3 63,582.8 61,318.6 60,554.3
Total non-current assets /H1118/H1118/H1118/H1118/H1118130,369.3 131,821.8 126,330.1 120,201.6
Total assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118192,947.6 195,404.6 187,648.7 180,755.9
Total current liabilities /H1118/H1118/H1118/H1118/H111878,167.1 94,659.0 85,476.5 76,799.0
Total non-current liabilities /H1118/H111826,710.1 26,708.9 24,636.0 23,517.1
Total liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118104,877.2 121,367.9 110,112.5 100,316.1
Net assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111888,070.4 74,036.7 77,536.2 80,439.8
Non-Current Assets and Liabilities
The following table sets forth our non-current assets and liabilities as of the dates
indicated:
As of December 31,
As of
September 30,
2022 2023 2024 2025
(RMB in millions)
Non-current assets
Long-term equity
investments /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118581.8 718.8 903.8 939.2
Investments in other equity
instruments /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118143.0 106.5 106.5 88.7
Investment properties /H1118/H1118/H1118/H1118/H1118/H1118125.5 109.2 103.2 98.7
Fixed assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118106,358.7 112,150.5 106,751.4 101,353.3
Construction in progress /H1118/H1118/H1118/H11187,441.3 2,308.3 2,018.2 3,227.1
Productive biological assets /H1118/H11187,334.8 9,315.1 9,355.1 7,741.8
Right-of-use assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11186,682.8 5,274.1 5,122.4 4,728.9
Intangible assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118952.4 1,155.2 1,186.6 1,205.9
Long-term deferred expenses /H1118 12.7 65.1 62.2 56.9
Deferred tax assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111865.8 69.5 100.7 127.4
Other non-current assets /H1118/H1118/H1118/H1118670.5 549.5 620.0 633.7
Total non-current assets /H1118/H1118/H1118130,369.3 131,821.8 126,330.1 120,201.6
FINANCIAL INFORMATION
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--- page 394 ---
As of December 31,
As of
September 30,
2022 2023 2024 2025
(RMB in millions)
Non-current liabilities
Long-term loans /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111810,646.4 9,863.5 8,797.5 7,924.5
Debentures payable /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11188,921.3 9,206.8 9,465.5 11,638.2
Lease liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184,384.6 4,111.6 4,354.7 2,231.4
Long-term payables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,997.5 2,615.7 1,177.6 851.2
Deferred income /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118760.3 911.3 840.7 871.8
Total non-current liabilities /H1118 26,710.1 26,708.9 24,636.0 23,517.1
Fixed Assets
Our fixed assets primarily consist of plants and buildings and machinery and equipment
and motor vehicles. Our fixed assets increased by 5.4% from RMB106,358.7 million as of
December 31, 2022 to RMB112,150.5 million as of December 31, 2023, primarily due to the
completed construction of certain hog farming plants, which resulted in an increase in plants
and buildings. Our fixed assets subsequently decreased by 4.8% from RMB112,150.5 million
as of December 31, 2023 to RMB106,751.4 million as of December 31, 2024, primarily due to
an increase in the depreciation of fixed assets. Our fixed assets decreased by 5.1% from
RMB106,751.4 million as of December 31, 2024 to RMB101,353.3 million as of September 30,
2025, primarily due to depreciation.
Construction in Progress
Our construction in progress primarily consists of hog farming plants, feed processing
plants and hog slaughtering plants. Our construction in progress decreased by 69.0% from
RMB7,441.3 million as of December 31, 2022 to RMB2,308.3 million as of December 31,
2023 and further decreased by 12.6% to RMB2,018.2 million as of December 31, 2024,
primarily due to the completion of certain construction projects, which were subsequently
recognized as fixed assets. Our construction in progress increased by 59.9% from RMB2,018.2
million as of December 31, 2024 to RMB3,227.1 million as of September 30, 2025, primarily
due to the construction of a new industrial park in Zhengzhou.
Productive Biological Assets
Our productive biological assets primarily consist of immature breeding hogs and mature
breeding hogs. Mature breeding hogs are reproductive boars and reproductive sows. Our
productive biological assets increased by 27.0% from RMB7,334.8 million as of December 31,
2022 to RMB9,315.1 million as of December 31, 2023 and further increased by 0.4% to
RMB9,355.1 million as of December 31, 2024, primarily due to an increase in the quantity of
immature breeding hogs and reproductive sows. Our productive biological assets decreased by
FINANCIAL INFORMATION
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--- page 395 ---
17.2% from RMB9,355.1 million as of December 31, 2024 to RMB7,741.8 million as of
September 30, 2025, primarily due to a decrease in the number and unit cost of immature
breeding hogs and reproductive sows.
Right-of-use Assets
Our right-of-use assets primarily consist of land, plant and buildings and machinery and
equipment. Our right-of-use assets decreased by 21.1% from RMB6,682.8 million as of
December 31, 2022 to RMB5,274.1 million as of December 31, 2023 and further decreased by
2.9% to RMB5,122.4 million as of December 31, 2024, primarily due to (i) the purchase of
certain leased hog farming plants and (ii) depreciation. Our right-of-use assets decreased by
7.7% from RMB5,122.4 million as of December 31, 2024 to RMB4,728.9 million as of
September 30, 2025, primarily due to depreciation.
Net Current Liabilities
The following table sets forth our current assets and current liabilities as of the dates
indicated:
As of December 31,
As of
September 30,
As of
November 30,
2022 2023 2024 2025 2025
(RMB in millions)
(Unaudited)
Current assets
Cash at bank and on
hand /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111820,793.5 19,429.1 16,951.6 19,035.2 11,212.6
Financial assets held
for trading /H1118/H1118/H1118/H1118/H1118/H11183.1 21.2 2.9 2,208.3 2,020.1
Bills receivable /H1118/H1118/H1118/H111860.0 129.1 152.9 208.5 134.3
Accounts receivable /H1118 176.6 167.8 231.2 467.1 928.0
Prepayments /H1118/H1118/H1118/H1118/H1118/H1118/H11182,101.5 535.1 524.3 481.7 914.4
Other receivables /H1118/H1118/H1118492.8 175.5 90.6 57.4 509.7
Inventories /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111838,251.7 41,930.8 41,969.8 36,520.3 36,276.4
Other current assets /H1118 699.1 1,194.2 1,395.3 1,575.8 1,589.4
Total current
assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111862,578.3 63,582.8 61,318.6 60,554.3 53,584.9
FINANCIAL INFORMATION
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--- page 396 ---
As of December 31,
As of
September 30,
As of
November 30,
2022 2023 2024 2025 2025
(RMB in millions)
(Unaudited)
Current liabilities
Short-term loans /H1118/H1118/H1118/H111829,165.4 46,929.0 45,257.7 39,760.3 39,655.7
Financial liabilities
held for trading /H1118/H1118/H1118 – – – 0.7 2.7
Bills payable /H1118/H1118/H1118/H1118/H1118/H11183,157.1 2,513.9 2,723.7 2,095.1 1,128.9
Accounts payable /H1118/H1118/H111825,186.2 23,463.0 17,993.0 12,306.4 12,935.3
Contract liabilities /H1118/H1118849.7 571.0 599.5 907.9 786.1
Employee benefits
payable /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,543.9 1,340.4 1,106.5 705.4 832.6
Taxes payable /H1118/H1118/H1118/H1118/H1118/H1118154.7 56.1 61.7 273.5 301.5
Other payables /H1118/H1118/H1118/H1118/H11188,311.2 11,092.4 8,348.2 11,840.9 6,142.3
Non-current
liabilities due
within one year /H1118/H1118/H11189,691.7 8,651.2 8,204.6 8,505.1 8,503.8
Other current
liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118107.2 42.0 1,181.6 403.7 402.5
Total current
liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H111878,167.1 94,659.0 85,476.5 76,799.0 70,691.4
Net current
liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118(15,588.8) (31,076.2) (24,157.9) (16,244.7) (17,106.5)
Our net current liabilities increased by 99.3% from RMB15,588.8 million as of December
31, 2022 to RMB31,076.2 million as of December 31, 2023, primarily due to (i) an increase
in short-term loans of RMB17,763.6 million, and (ii) an increase in other payables of
RMB2,781.2 million, partially offset by an increase in inventories of RMB3,679.1 million.
Our net current liabilities decreased by 22.3% from RMB31,076.2 million as of December
31, 2023 to RMB24,157.9 million as of December 31, 2024, primarily due to (i) a decrease in
accounts payable of RMB5,470.0 million, and (ii) a decrease in other payables of RMB2,744.2
million, partially offset by a decrease in cash at bank and on hand of RMB2,477.5 million.
Our net current liabilities decreased by 32.8% from RMB24,157.9 million as of December
31, 2024 to RMB16,244.7 million as of September 30, 2025, primarily due to (i) a decrease in
accounts payables of RMB5,686.6 million, and (ii) a decrease in short-term loans of
RMB5,497.4 million, partially offset by a decrease in inventories of RMB5,449.5 million.
FINANCIAL INFORMATION
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--- page 397 ---
Our net current liabilities increased from RMB16,244.7 million as of September 30, 2025
to RMB17,106.5 million as of November 30, 2025, primarily due to a decrease in cash at bank
and on hand of RMB7,822.6 million, partially offset by a decrease in other payables of
RMB5,698.6 million.
We recorded net current liabilities during the Track Record Period, primarily due to (i)
short-term loans and (ii) accounts payable. In order to improve our net current liabilities
position, we intend to (i) reduce our current indebtedness by repayments with cashflow from
operating activities and replacing high-interest loans with low-interest ones and (ii) shortening
our credit terms with our suppliers in exchange for lower unit procurement price.
Inventories
Our inventories primarily consist of (i) raw materials, (ii) finished goods and (iii)
consumable biological assets. Raw materials mainly include feed ingredients such as corn,
wheat and soybean meal. Finished goods primarily consist of meat products. Consumable
biological assets include suckling piglets, piglets under nursing period, hogs under finishing
period and others. The following table sets forth a breakdown of our inventories as of the dates
indicated:
As of December 31,
As of
September 30,
2022 2023 2024 2025
(RMB in millions)
Raw materials /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11189,138.5 8,025.8 8,336.4 5,469.7
Finished goods /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118615.0 1,298.2 565.5 1,081.7
Consumable biological
assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111828,498.2 32,809.3 33,068.5 29,970.1
Subtotal /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111838,251.7 42,133.3 41,970.4 36,521.5
Less: provision for
impairment of inventories /H1118 – 202.5 0.6 1.2
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111838,251.7 41,930.8 41,969.8 36,520.3
Our inventories increased by 9.6% from RMB38,251.7 million as of December 31, 2022,
to RMB41,930.8 million as of December 31, 2023, primarily due to an increase in the quantity
of hogs. Our inventories remained relatively stable at RMB41,930.8 million as of
December 31, 2023 and RMB41,969.8 million as of December 31, 2024, respectively. Our
inventories subsequently decreased by 13.0% from RMB41,969.8 million as of December 31,
2024 to RMB36,520.3 million as of September 30, 2025, primarily due to a decrease in the
quantity of hogs.
FINANCIAL INFORMATION
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--- page 398 ---
The following table sets forth an aging analysis of our inventories as of the dates
indicated:
As of December 31,
As of
September 30,
2022 2023 2024 2025
(RMB in millions)
Within one year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111838,230.3 41,890.8 41,965.3 36,519.5
Over one year but within two
years (inclusive) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111821.4 40.0 4.5 0.8
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111838,251.7 41,930.8 41,969.8 36,520.3
The following table sets forth our inventory turnover days for the periods indicated:
Y ear ended December 31,
Nine months
ended
September 30,
2022 2023 2024 2025
Inventory turnover days (1) /H1118/H1118/H1118128.9 136.2 137.1 117.9
Note:
(1) Inventory turnover days are calculated using the average of opening balance and closing balance of
inventories for a period divided by operating costs for the relevant period and multiplied the number of
days in the relevant period (i.e. 365 days for a fiscal year and 273 days for the nine months ended
September 30, 2025).
Our inventory turnover days increased from 128.9 days in 2022 to 136.2 days in 2023,
primarily due to increase in the number of hogs under the finishing phase and piglets under
nursing period as of December 31, 2023. Our inventory turnover days remained relatively
stable at 136.2 days and 137.1 days in 2023 and 2024, respectively. Our inventory turnover
days decreased from 137.1 days million in 2024 to 117.9 days in the nine months ended
September 30, 2025, primarily due to an increase in the sales of piglets, which are sold upon
the completion of nursing period.
As of November 30, 2025, RMB13,360.7 million, or 36.6%, of inventories as of
September 30, 2025, had been used, consumed or sold.
FINANCIAL INFORMATION
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--- page 399 ---
Financial Assets Held for Trading
Our financial assets held for trading consist of futures contracts, foreign exchange
forward contracts and interest rate swap contracts. Our financial assets held for trading
increased by 583.9% from RMB3.1 million as of December 31, 2022 to RMB21.2 million as
of December 31, 2023, primarily due to an increase in the fair value of hog futures. Our
financial assets held for trading decreased by 86.3% from RMB21.2 million as of December
31, 2023 to RMB2.9 million as of December 31, 2024, primarily due to a decrease in the fair
value of our hog futures. Our financial assets held for trading significantly increased from
RMB2.9 million as of December 31, 2024 to RMB2,208.3 million as of September 30, 2025,
primarily due to our purchase of wealth management products. See “Business — Risk
Management and Internal Control”.
Other Current Assets
Our other current assets primarily consist of deductible input V A T and insurance
expenses. Our other current assets increased by 70.8% from RMB699.1 million as of December
31, 2022 to RMB1,194.2 million as of December 31, 2023 and further increased by 16.8% to
RMB1,395.3 million as of December 31, 2024, primarily due to (i) an increase in deductible
input V A T for the slaughtering and meat product business, and (ii) an increase in insurance
expenses, which was attributable to an increase in prepayments for insurance premium. Our
other current assets increased by 12.9% from RMB1,395.3 million as of December 31, 2024 to
RMB1,575.8 million as of September 30, 2025, primarily due to (i) an increase in deductible
input V A T of certain subsidiary, (ii) an increase in financing issuance fees, partially offset by
a decrease in insurance expenses.
Bills Receivable
Our bills receivable are related to bank acceptance bills. Our bills receivable increased by
115.2% from RMB60.0 million as of December 31, 2022 to RMB129.1 million as of December
31, 2023 and further increased by 18.4% to RMB152.9 million as of December 31, 2024. Our
bills receivable also increased by 36.4% from RMB152.9 million as of December 31, 2024 to
RMB208.5 million as of September 30, 2025 , primarily due to an increase in the payments in
bank acceptance bills by certain customers.
FINANCIAL INFORMATION
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--- page 400 ---
Accounts Receivable
Our accounts receivable are amounts due from customers for goods sold in the ordinary
course of business.
Our accounts receivable decreased by 5.0% from RMB176.6 million as of December 31,
2022, to RMB167.8 million as of December 31, 2023, primarily due to an increase in provision
for bad and doubtful debts. Our accounts receivable increased by 37.8% from RMB167.8
million as of December 31, 2023 to RMB231.2 million as of December 31, 2024, in line with
the growth in our sales volume. Our accounts receivable increased by 102.0% from RMB231.2
million as of December 31, 2024 to RMB467.1 million as of September 30, 2025, in line with
the growth in our sales volume.
We generally require our customers to make full upfront payment to us before we deliver
our products. For certain key account customers for the slaughtering and meat product
business, we have engaged in credit sale with them during the Track Record Period and we
usually grant credit terms no more than 30 days. In addition, we impose a maximum credit limit
on such customers. We seek to maintain strict control over our outstanding receivables. Our
finance team is responsible for minimizing credit risks. Overdue balances are reviewed
regularly by senior management.
The following table sets forth an aging analysis of our accounts receivable as of the dates
indicated:
As of December 31,
As of
September 30,
2022 2023 2024 2025
(RMB in millions)
Within one year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118180.7 175.6 241.8 490.9
Over one year but within two
years (inclusive) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11186.2 12.5 1.5 0.1
Over two years but within
three years (inclusive) /H1118/H1118/H1118/H1118– 0.3 1.2 1.8
Over three years /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118––– 0 . 1
Less: Provision for bad and
doubtful debts /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111810.3 20.6 13.3 25.8
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118176.6 167.8 231.2 467.1
FINANCIAL INFORMATION
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--- page 401 ---
The following table sets forth our accounts receivable turnover days for the periods
indicated:
Y ear ended December 31,
Nine months
ended
September 30,
2022 2023 2024 2025
Accounts receivable turnover
days (1) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11180.5 0.6 0.5 0.9
Note:
(1) Accounts receivable turnover days are calculated using the average of opening balance and closing
balance of accounts receivable for a period divided by revenue for the relevant period and multiplied
by the number of days in the relevant period (i.e. 365 days for a fiscal year and 273 days for the nine
months ended September 30, 2025).
Our accounts receivable turnover days remained relatively stable at 0.5 days, 0.6 days, 0.5
days and 0.9 days in 2022, 2023, 2024 and the nine months ended September 30, 2025,
respectively.
As of November 30, 2025, RMB375.6 million, or 80.4%, of our accounts receivable as
of September 30, 2025, had been settled.
Prepayments
Our prepayments primarily consist of prepayments for feed ingredients such as corn and
soybean meal. Our prepayments decreased by 74.5% from RMB2,101.5 million as of December
31, 2022 to RMB535.1 million as of December 31, 2023, primarily due to the completion of
previous contracts. Our prepayments remained relatively stable at RMB535.1 million as of
December 31, 2023 and RMB524.3 million as of December 31, 2024. Our prepayments
decreased by 8.1% from RMB524.3 million as of December 31, 2024 to RMB481.7 million as
of September 30, 2025 primarily due to a decrease in advance payments for raw materials.
Other Receivables
Our other receivables primarily consist of receivables in relation to raw grain auction
deposits, land deposits, and rental deposits.
Our other receivables decreased by 64.4% from RMB492.8 million as of December 31,
2022 to RMB175.5 million as of December 31, 2023, and further decreased by 48.4% to
RMB90.6 million as of December 31, 2024, primarily due to a decrease in raw grain auction
deposits resulting from a decrease in our participation in such auction activities. Our other
FINANCIAL INFORMATION
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--- page 402 ---
receivables decreased by 36.6% from RMB90.6 million as of December 31, 2024 to RMB57.4
million as of September 30, 2025, primarily due to a decrease in raw grain auction deposits
resulting from a decrease in our participation in such auction activities.
As of November 30, 2025, RMB11.3 million, or 19.6%, of our other receivables as of
September 30, 2025, had been settled.
Bills Payable
Our bills payable consist of (i) commercial acceptance bills, (ii) bank acceptance bills and
(iii) letters of credit. The following table sets forth a breakdown of our bills payable as of the
dates indicated:
As of December 31,
As of
September 30,
2022 2023 2024 2025
(RMB in millions)
Commercial acceptance bills /H1118 1,810.2 606.4 420.6 –
Bank acceptance bills /H1118/H1118/H1118/H1118/H1118/H11181,258.6 1,837.0 2,199.7 2,087.3
Letters of credit /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111888.3 70.5 103.4 7.8
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,157.1 2,513.9 2,723.7 2,095.1
Our bills payable decreased by 20.4% from RMB3,157.1 million as of December 31, 2022
to RMB2,513.9 million as of December 31, 2023, primarily due a decrease in payments using
commercial acceptance bills. Our bills payable subsequently increased by 8.3% from
RMB2,513.9 million as of December 31, 2023 to RMB2,723.7 million as of December 31,
2024, primarily due to an increase in procurement using bank acceptance bills as payment
method. Our bills payable further decreased by 23.1% from RMB2,723.7 million as of
December 31, 2024 to RMB2,095.1 million as of September 30, 2025, primarily due to a
decrease in procurement using commercial acceptance bills as payment method.
As of November 30, 2025, RMB1,138.7 million, or 54.4%, of our bills payable as of
September 30, 2025, had been settled.
FINANCIAL INFORMATION
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--- page 403 ---
Accounts Payable
Our accounts payable primarily consist of (i) payables for goods and (ii) payables for
construction and equipment. The following table sets forth a breakdown of our accounts
payables as of the dates indicated:
As of December 31,
As of
September 30,
2022 2023 2024 2025
(RMB in millions)
Payables for goods /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111811,785.6 10,758.2 7,796.2 3,384.1
Payables for construction and
equipment /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111813,133.0 12,534.9 9,988.9 8,695.5
Others /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118267.6 169.9 207.9 226.8
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111825,186.2 23,463.0 17,993.0 12,306.4
Our accounts payable decreased by 6.8% from RMB25,186.2 million as of December 31,
2022 to RMB23,463.0 million as of December 31, 2023 and further decreased to RMB17,993.0
million as of December 31, 2024, primarily due (i) a decrease in payables for raw materials
resulting from declining prices of feed ingredients, and (ii) a decrease in payables for
construction and equipment resulting from the settlement with our suppliers upon completion
of certain construction projects. Our accounts payable further decreased by 31.6% from
RMB17,993.0 million as of December 31, 2024 to RMB12,306.4 million as of September 30,
2025, primarily due to our partial repayment.
As of December 31, 2022, 2023, 2024 and the nine months ended September 30, 2025,
there were no significant accounts payable with aging of more than one year.
The following table sets forth our accounts payable turnover days for the periods
indicated:
Y ear ended December 31,
Nine months
ended
September 30,
2022 2023 2024 2025
Accounts payable turnover
days (1) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118101.3 82.7 67.8 45.5
Note:
(1) Accounts payable turnover days are calculated using the average of opening balance and closing balance
of accounts payables for a period divided by operating costs used for the relevant period and multiplied
by the number of days in the relevant period (i.e. 365 days for a fiscal year and 273 days for the nine
months ended September 30, 2025).
FINANCIAL INFORMATION
– 392 –


--- page 404 ---
Our accounts payable turnover days decreased from 101.3 days in 2022 to 82.7 days in
2023, and further to 67.8 days in 2024, primarily due to (i) the enhanced repayment efforts to
our suppliers, and (ii) a decrease in payables for construction and equipment upon settlement
with suppliers. Our accounts payable turnover days further decreased from 67.8 days in 2024
to 45.5 days in the nine months ended September 30, 2025, primarily due to the partial
repayment of accounts payable.
As of November 30, 2025, RMB4,180.0 million, or 34.0%, of our accounts payable as of
September 30, 2025, had been settled.
Other Payables
Our other payables primarily consist of payables in relation to reverse factoring. During
the Track Record Period, certain suppliers entered into factoring arrangements with banks and
other financial institutions. According to these factoring arrangements, our suppliers
transferred the receivables due from our Group to banks and other financial institutions before
the original due dates of these trade payables, and we settled these trade payables with banks
and other financial institutions upon the due date of these factoring arrangements. During the
Track Record Period, the range of payment due dates of our trade payables is 0-180 days after
invoice date. As of December 31, 2022, 2023 and 2024 and September 30, 2025, the ranges of
payment due dates of these factoring arrangements are 43 to 365 days, 49 to 541 days, 27 to
388 days and 77 to 398 days, respectively, after the factoring arrangements commenced. The
following table sets forth a breakdown of our other payables as of the dates indicated:
As of December 31,
As of
September 30,
2022 2023 2024 2025
(RMB in millions)
Dividends payable (1) /H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 26.1 5,004.4
Borrowings and interest /H1118/H1118/H1118/H1118/H11181,000.0 1,900.0 – –
Deposits /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118744.9 856.7 842.2 866.9
Restricted stock repurchase
obligation /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,951.6 772.1 – 1,048.4
Reverse factoring /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184,578.9 7,518.1 7,410.4 4,458.3
Others /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111835.8 45.5 69.5 462.9
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11188,311.2 11,092.4 8,348.2 11,840.9
Note:
(1) The dividends payable amounted to RMB26.1 million as of December 31, 2024, which had been fully
paid in January 2025. The dividends payable amounted to RMB5,004.4 million as of September 30,
2025, which had been fully paid in October 2025.
FINANCIAL INFORMATION
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--- page 405 ---
Our other payables increased by 33.5% from RMB8,311.2 million as of December 31,
2022 to RMB11,092.4 million as of December 31, 2023, primarily due to (i) an increase in
payables in relation to reverse factoring, and (ii) an increase in payables in relation to
outstanding borrowings and interest from controlling shareholders, partially offset by a
decrease in payables in relation to restricted stock repurchase obligation. Our other payables
decreased by 24.7% from RMB11,092.4 million as of December 31, 2023 to RMB8,348.2
million as of December 31, 2024, primarily due to (i) a decrease in payables in relation to our
borrowings and interest resulting from full repayment to Muyuan Group, one of our controlling
shareholders, and (ii) a decrease in payables in relation to restricted stock repurchase
obligation resulting from the completion of vesting of restricted stock. Our other payables
increased by 41.8% from RMB8,348.2 million as of December 31, 2024 to RMB11,840.9
million as of September 30, 2025, primarily due to (i) an increase in dividends payable and (ii)
an increase in restricted stock repurchase obligation.
As of November 30, 2025, RMB6,033.7 million, or 51.0%, of our other payables as of
September 30, 2025, had been settled.
Taxes Payable
Our taxes payable primarily includes stamp duty payable, individual income tax payable
and real estate tax payable. Our taxes payable amounted to RMB154.7 million, RMB56.1
million, RMB61.7 million and RMB273.5 million as of December 31, 2022, 2023, 2024 and
September 30, 2025, respectively.
Contract Liabilities
Our contract liabilities represent advance payments made by customers before we provide
our products. Our contract liabilities amounted to RMB849.7 million, RMB571.0 million,
RMB599.5 million and RMB907.9 million as of December 31, 2022, 2023, 2024 and
September 30, 2025, respectively.
As of November 30, 2025, RMB740.4 million, or 81.6%, of our contract liabilities as of
September 30, 2025, had been recognized as revenue.
Employee Benefits Payable
Our employee benefits payable primarily consist salaries, bonuses and allowance. Our
employee benefits payable decreased by 13.2% from RMB1,543.9 million as of December 31,
2022 to RMB1,340.4 million as of December 31, 2023, primarily due to a decrease in the
number of employees as we improved production efficiency through the adoption of
technology and equipment. Our employee benefits payable further decreased by 17.5% from
RMB1,340.4 million as of December 31, 2023 to RMB1,106.5 million as of December 31,
2024, and by 36.2% from RMB1,106.5 million as of December 31, 2024 to RMB705.4 million
as of September 30, 2025, primarily because we optimized the salary settlement plan for
production personnel.
FINANCIAL INFORMATION
– 394 –


--- page 406 ---
LIQUIDITY AND CAPITAL RESOURCES
We have historically funded our cash requirements principally from proceeds from our
business operations, bank borrowings, debentures and capital contribution from shareholders.
After the Global Offering, we intend to finance our future capital requirements through cash
generated from our business operations, bank borrowings and the net proceeds from the Global
Offering. We do not anticipate any changes to the availability of financing to fund our
operations in the future.
Cash Flow
The following table sets forth a summary of our cash flows for the periods indicated:
Y ear ended December 31,
Nine months ended
September 30,
2022 2023 2024 2024 2025
(RMB in millions)
(Unaudited)
Net cash inflow from
operating activities /H1118/H1118/H1118/H1118/H111823,010.6 9,892.8 37,543.1 29,177.9 28,579.5
Net cash outflow from
investing activities /H1118/H1118/H1118/H1118/H1118(15,928.7) (17,218.8) (13,246.2) (12,668.6) (8,499.3)
Net cash inflow/(outflow)
from financing activities /H1118 2,420.5 3,199.0 (25,228.7) (14,540.6) (15,656.3)
Effect of foreign exchange
rate change on cash and
cash equivalents /H1118/H1118/H1118/H1118/H1118/H1118/H11180.6 (6.9) – (0.0) 0.2
Net increase/(decrease) in
cash and cash
equivalents /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11189,503.0 (4,133.9) (931.8) 1,968.7 4,424.1
Cash and cash equivalents
at the beginning of the
year/period /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11188,407.3 17,910.3 13,776.4 13,776.4 12,844.6
Cash and cash equivalents
at the end of the
year/period /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111817,910.3 13,776.4 12,844.6 15,745.1 17,268.7
FINANCIAL INFORMATION
– 395 –


--- page 407 ---
Net Cash Inflow from Operating Activities
In the nine months ended September 30, 2025, we had net cash inflow from operating
activities of RMB28,579.5 million, which represents our cash inflow from operations of
RMB119,893.3 million, as adjusted by (i) payment for goods and services of RMB73,888.1
million, and (ii) payment to and for employees of RMB14,248.3 million.
In 2024, we had net cash inflow from operating activities of RMB37,543.1 million, which
represents our cash inflow from operations of RMB146,910.7 million, as adjusted by (i)
payment for goods and services of RMB86,812.6 million, and (ii) payment to and for
employees of RMB18,221.8 million.
In 2023, we had net cash inflow from operating activities of RMB9,892.8 million, which
represents our cash inflow from operations of RMB118,881.0 million, as adjusted by (i)
payment for goods and services of RMB84,645.8 million, and (ii) payment to and for
employees of RMB16,791.3 million.
In 2022, we had net cash inflow from operating activities of RMB23,010.6 million, which
represents our cash inflow from operations of RMB131,820.2 million, as adjusted by (i)
payment for goods and services of RMB90,775.4 million, and (ii) payment to and for
employees of RMB14,831.6 million.
Net Cash Outflow from Investing Activities
In the nine months ended September 30, 2025, we had net cash outflow from investing
activities of RMB8,499.3 million, which was primarily attributable to (i) payment for
investments of RMB9,793.9 million and (ii) payment for acquisition of fixed assets, intangible
assets and other long-term assets of RMB7,286.6 million, partially offset by proceeds from
disposal of investments of RMB8,440.0 million.
In 2024, our net cash outflow from investing activities were RMB13,246.2 million, which
was primarily attributable to (i) payment for investments of RMB21,067.2 million and (ii)
payment for acquisition of fixed assets, intangible assets and other long-term assets of
RMB12,380.7 million, partially offset by proceeds from disposal of investments of
RMB20,033.7 million.
In 2023, our net cash outflow from investing activities were RMB17,218.8 million, which
was primarily attributable to (i) payment for investments of RMB3,036.5 million and (ii)
payment for acquisition of fixed assets, intangible assets and other long-term assets of
RMB17,015.7 million, partially offset by proceeds from disposal of investments of
RMB2,759.4 million.
FINANCIAL INFORMATION
– 396 –


--- page 408 ---
In 2022, our net cash outflow from investing activities were RMB15,928.7 million, which
was primarily attributable to (i) payment for investments of RMB541.4 million and (ii)
payment for acquisition of fixed assets, intangible assets and other long-term assets of
RMB15,738.9 million, partially offset by proceeds from disposal of investments of RMB305.0
million.
Net Cash Inflow/(outflow) from Financing Activities
In the nine months ended September 30, 2025, we had net cash outflow from financing
activities of RMB15,656.3 million, which was primarily attributable to (i) repayments of
borrowings of RMB52,921.4 million and (ii) payment for dividends, profit distributions or
interest of RMB4,963.8 million, partially offset by proceeds from borrowings of RMB45,890.2
million.
In 2024, our net cash outflow from financing activities were RMB25,228.7 million,
primarily attributable to (i) repayments of borrowings of RMB73,608.5 million and (ii)
payment for other financing activities of RMB12,525.7 million, partially offset by proceeds
from borrowings of RMB68,138.9 million.
In 2023, our net cash inflow from financing activities were RMB3,199.0 million,
primarily attributable to proceeds from borrowings of RMB71,649.4 million, partially offset by
(i) repayments of borrowings of RMB53,366.1 million, and (ii) payment for other financing
activities of RMB8,490.3 million.
In 2022, our net cash inflow from financing activities were RMB2,420.5 million,
primarily attributable to proceeds from borrowings of RMB66,577.3 million, partially offset by
(i) repayments of borrowings of RMB64,250.5 million and (ii) payment for other financing
activities of RMB5,439.1 million.
FINANCIAL INFORMATION
– 397 –


--- page 409 ---
INDEBTEDNESS
During the Track Record Period, our indebtedness mainly included (i) short-term loans,
(ii) long-term loans, (iii) non-current liabilities due within one year, and (iv) debentures
payable. The following table sets forth the breakdown of our indebtedness as of the dates
indicated:
As of December 31,
As of
September 30,
As of
November 30,
2022 2023 2024 2025 2025
(RMB in millions)
(Unaudited)
Current
Short-term loans /H1118/H1118/H1118/H1118/H1118/H111829,165.4 46,929.0 45,257.7 39,760.3 39,655.7
Other payables –
borrowings and
interest /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,000.0 1,900.0 – – –
Non-current liabilities
due within one year /H1118 9,691.7 8,651.2 8,204.6 8,505.1 8,503.8
Other current liabilities
– short-term
debentures payable /H1118/H1118 – – 1,003.6 301.9 302.9
Other current liabilities
– short-term sale and
lease back finance
lease payments /H1118/H1118/H1118/H1118/H1118/H111872.0 – – – –
Non-Current
Long-term loans /H1118/H1118/H1118/H1118/H1118/H111810,646.4 9,863.5 8,797.5 7,924.5 7,538.6
Debentures payable /H1118/H1118/H11188,921.3 9,206.8 9,465.5 11,638.2 11,675.9
Lease liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H11184,384.6 4,111.6 4,354.7 2,231.4 2,209.8
Long-term payables /H1118/H1118/H11181,997.5 2,615.7 1,177.6 851.2 711.3
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111865,878.9 83,277.8 78,261.2 71,212.6 70,598.0
Our Directors confirmed that there has not been any material change in our indebtedness
since September 30, 2025 to the date of this prospectus. As of the Latest Practicable Date, there
was no material restrictive covenant in our indebtedness which could significantly limit our
ability to obtain future financing, nor was there any material default on our indebtedness or
breach of covenant during the Track Record Period and up to the Latest Practicable Date. As
of the Latest Practicable Date, except for bank loans, we did not have plans for other material
external debt financing.
FINANCIAL INFORMATION
– 398 –


--- page 410 ---
Short-term and Long-term Loans
As of December 31, 2022, 2023, 2024, September 30, 2025 and November 30, 2025, we
had short-term loans of RMB29,165.4 million, RMB46,929.0 million, RMB45,257.7 million,
RMB39,760.3 million and RMB39,655.7 million, respectively. Our short-term loans are
primarily denominated in Renminbi. The effective interest rate on our short-term loans ranged
from 1.35% to 6.40% during the Track Record Period. The following table sets forth a
breakdown of short-term loans by category as of the dates indicated:
As of December 31,
As of
September 30,
As of
November 30,
2022 2023 2024 2025 2025
(RMB in millions)
(Unaudited)
Pledged loans /H1118/H1118/H1118/H1118/H11185,286.7 7,476.1 5,721.3 4,397.0 4,746.4
Secured loans /H1118/H1118/H1118/H1118/H1118616.6 354.0 423.5 – –
Guaranteed loans /H1118/H111823,116.9 38,998.8 38,311.5 33,321.1 33,263.6
Unsecured loans /H1118/H1118/H1118145.2 100.1 801.4 2,042.2 1,645.7
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111829,165.4 46,929.0 45,257.7 39,760.3 39,655.7
As of December 31, 2022, 2023, 2024, September 30, 2025 and November 30, 2025, we
had long-term loans of RMB10,646.4 million, RMB9,863.5 million, RMB8,797.5 million,
RMB7,924.5 million and RMB7,538.6 million, respectively. The effective interest rate on our
long-term loans ranged from 2.00% to 6.18% during the Track Record Period. Our long-term
loans are primarily denominated in Renminbi. The following table sets forth a breakdown of
long-term loans by category as of the dates indicated:
As of December 31,
As of
September
30,
As of
November 30,
2022 2023 2024 2025 2025
(RMB in millions)
(Unaudited)
Secured loans /H1118/H1118/H1118/H1118/H11182,438.7 2,522.0 1,528.2 611.8 397.2
Guaranteed loans /H1118/H111814,182.4 12,798.2 12,777.7 11,057.1 10,858.6
Unsecured loans /H1118/H1118/H111854.4 43.1 – 790.1 793.6
Subtotal /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111816,675.5 15,363.3 14,305.9 12,459.0 12,049.4
Less: Long-term
loans due within
one year /H1118/H1118/H1118/H1118/H1118/H1118/H11186,029.1 5,499.8 5,508.4 4,534.5 4,510.8
Total/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111810,646.4 9,863.5 8,797.5 7,924.5 7,538.6
FINANCIAL INFORMATION
– 399 –


--- page 411 ---
As of the Latest Practicable Date, our unutilized banking facilities amounted to
RMB47,587.2 million.
Our Directors confirm that, there was no material covenant on any of our outstanding debt
as of the Latest Practicable Date and there was no breach of any covenants during the Track
Record Period and up to the Latest Practicable Date. Our Directors further confirm that we did
not experience any difficulty in obtaining bank loans and other borrowings, default in payment
of short-term and long-term or breach of covenants during the Track Record Period and up to
the Latest Practicable Date.
Other Payables — Borrowings and Interest
Our borrowings and interest recognized in other payables mainly comprise of borrowings
from a related party. Our other payables in relation to borrowings and interest increased by
90.0% from RMB1,000.0 million as of December 31, 2022 to RMB1,900.0 million as of
December 31, 2023, which had been fully settled as of December 31, 2024. As of December
31, 2024, September 30, 2025 and November 30, 2025, we did not record any other payables
related to borrowings and interest.
Non-current Liabilities Due Within One Y ear
Our non-current liabilities due within one year comprise of (i) long-term loans due within
one year, (ii) debentures payable due within one year, (iii) long-term payables due within one
year and (iv) lease liabilities due within one year. Our non-current liabilities due within one
year decreased by 10.7% from RMB9,691.7 million as of December 31, 2022 to RMB8,651.2
million as of December 31, 2023, primarily due to (i) a decrease in long-term loans upon our
repayments, and (ii) a decrease in lease liabilities as we purchased certain hog houses. Our
non-current liabilities due within one year subsequently decreased by 5.2% from RMB8,651.2
million as of December 31, 2023 to RMB8,204.6 million as of December 31, 2024, primarily
due to a decrease in long-term payable in relation to sale and leaseback finance lease payables.
Our non-current liabilities due within one year increased by 3.7% from RMB8,204.6 million
as of December 31, 2024 to RMB8,505.1 million as of September 30, 2025, primarily due to
an increase in long-term loans due within one year, partially offset by a decrease in long-term
payables due within one year upon our repayment. As of November 30, 2025, we had
non-current liabilities due within one year of RMB8,503.8 million.
Other Current Liabilities — Short-term Debentures Payable
As of December 31, 2022, 2023, 2024 and September 30, 2025, the short-term debentures
payable amounted to nil, nil, RMB1,003.6 million and RMB301.9 million, respectively. As of
November 30, 2025, we had other current liabilities in relation to short-term debentures
payable of RMB302.9 million.
FINANCIAL INFORMATION
– 400 –


--- page 412 ---
Other Current Liabilities — Short-term Sale and Leaseback Finance Lease Payables
Our short-term sale and leaseback finance lease payables recognized in other current
liabilities mainly related to sale and leaseback of certain hog farming plants. As of December
31, 2022, 2023, 2024 and September 30, 2025, other current liabilities in relation to short-term
sale and leaseback finance lease payables amounted to RMB72.0 million, nil, nil and nil,
respectively. As of November 30, 2025, we had no other current liabilities in relation to
short-term sale and leaseback finance lease payables.
Lease Liabilities
Our lease liabilities primarily comprise of lease contracts for items such as land, plant and
building and machinery and equipment. Our lease liabilities decreased by 6.2% from
RMB4,384.6 million as of December 31, 2022 to RMB4,111.6 million as of December 31,
2023, primary due to the purchase of certain leased hog farming plants. Our lease liabilities
subsequently increased by 5.9% from RMB4,111.6 million as of December 31, 2023 to
RMB4,354.7 million as of December 31, 2024, primary due to new facility leases for hog flow
management to support expanded production capacity. Our lease liabilities decreased by 48.8%
from RMB4,354.7 million as of December 31, 2024 to RMB2,231.4 million as of September
30, 2025, primarily due to the termination of the leases of certain idle land parcels. As of
November 30, 2025, we had lease liabilities of RMB2,209.8 million shown under non-current
liabilities.
Debentures Payable
Our debentures payable mainly comprise of convertible bonds. Our debentures payable
increased by 3.2% from RMB8,921.3 million as of December 31, 2022 to RMB9,206.8 million
as of December 31, 2023, and further increased by 2.8% to RMB9,465.5 million as of
December 31, 2024, primarily due to amortization on effective interest rates of the debentures.
Our debentures payable increased by 23.0% from RMB9,465.5 million as of December 31,
2024 to RMB11,638.2 million as of September 30, 2025, primarily due to the issuance of new
debentures in 2025. As of November 30, 2025, we had debentures payable of RMB11,675.9
million.
Long-term Payables
Our long-term payables mainly comprise of sale and leaseback finance leases payable in
relation to certain hog farming plants. Our long-term payables increased by 30.9% from
RMB1,997.5 million as of December 31, 2022 to RMB2,615.7 million as of December 31,
2023, primarily because we engaged in such transactions to enhance cashflow to support our
business operations in 2023. Our long-term payables decreased by 55.0% from RMB2,615.7
million as of December 31, 2023 to RMB1,177.6 million as of December 31, 2024, primarily
due to our repayments of such payables in 2024. Our long-term payables decreased by 27.7%
FINANCIAL INFORMATION
– 401 –


--- page 413 ---
from RMB1,177.6 million as of December 31, 2024 to RMB851.2 million as of September 30,
2025, primarily due to the partial repayment of such payables. As of November 30, 2025, we
had long-term payables of RMB711.3 million.
Contingent Liabilities
We did not have any material contingent liabilities as of December 31, 2022, 2023, 2024,
September 30, 2025 and November 30, 2025, respectively.
Indebtedness Statement
Except as disclosed above, as of November 30, 2025, being our indebtedness statement
date, we did not have any outstanding mortgages, charges, debentures, other issued debt
capital, bank overdrafts, borrowings, liabilities under acceptance or other similar indebtedness,
hire purchase commitments, guarantees or other material contingent liabilities. Our Directors
have confirmed that there is no material change in our indebtedness since November 30, 2025
and up to the Latest Practicable Date.
KEY FINANCIAL RATIOS
The following table sets forth our key financial ratios for the periods indicated:
As of/For the Y ear ended December 31,
As of/For the nine months
ended September 30,
2022 2023 2024 2024 2025
(Unaudited)
Gross profit margin
(%)(1) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111817.5 3.1 19.1 17.3 18.7
Net profit/(loss) margin
(%)(2) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111812.0 (3.8) 13.7 11.6 13.5
EBITDA margin (non-
CASBE measure)
(%)
(3) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111823.9 11.1 26.8 25.5 25.5
Current ratio (4) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11180.8 0.7 0.7 0.7 0.8
Gearing ratio (%) (5) /H1118/H1118/H1118/H1118/H111854.4 62.1 58.7 58.4 55.5
Return on assets (%) (6) /H1118/H1118/H11188.1 (2.1) 9.9 7.8 10.9
Return on equity (%) (7) /H1118/H1118 19.1 (5.1) 25.0 19.5 25.5
Operating cash flow ratio
(%)(8) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111818.4 8.9 27.2 30.2 25.6
Notes:
(1) Gross profit margin equals gross profit divided by revenue and multiplied by 100%.
FINANCIAL INFORMATION
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(2) Net profit/(loss) margin equals net profit/(loss) for the year/period divided by revenue for the
year/period and multiplied by 100%.
(3) EBITDA margin (non-CASBE measure) equals EBITDA (non-CASBE measure) divided by revenue and
multiplied by 100%. See “— Non-CASBE Financial Measure.”
(4) Current ratio equals current assets divided by current liabilities of the year/period.
(5) Gearing ratio equals total liabilities divided by total assets of the year/period and multiplied by 100%.
(6) Return on assets equals net profit/(loss) for the year/period divided by the average of the beginning and
ending balances of total assets for the year/period and multiplied by 100%. The net profit for the nine
months ended September 30, 2024 and 2025 are annualized.
(7) Return on equity equals net profit/(loss) for the year/period divided by the average of the beginning and
ending balances of total equity for the year/period and multiplied by 100%. The net profit for the nine
months ended September 30, 2024 and 2025 are annualized.
(8) Operating cash flow ratio equals net cash inflow from operating activities divided by revenue for the
year/period and multiplied by 100%.
Current Ratio
Our current ratio remained relatively stable at 0.8, 0.7, 0.7 and 0.8 in 2022, 2023, 2024
and the nine months ended September 30, 2025, respectively.
Gearing Ratio
Our gearing ratio increased from 54.4% in 2022 to 62.1% in 2023, primarily due to an
increase in our total liabilities resulting from an increase in short-term loans to support daily
operation. Our gearing ratio subsequently decreased from 62.1% in 2023 to 58.7% in 2024,
primarily due to a decrease in total liabilities resulting from (i) a decrease in payables for
goods, (ii) a decrease in payables for construction and equipment, and (iii) a decrease in
long-term loans. Our gearing ratio decreased from 58.4% in the nine months ended
September 30, 2024 to 55.5% in the same period of 2025 primarily due to a decrease in total
liabilities resulting from (i) a decrease in short-term loans and (ii) a decrease in accounts
payables.
Return on Assets
Our return on assets decreased from 8.1% in 2022 to (2.1)% in 2023, primarily due to the
net loss we recorded in 2023. Our return on assets subsequently increased from (2.1)% in 2023
to 9.9% in 2024, primarily due to the net profit we recorded in 2024. Our annualized return on
assets increased from 7.8% in the nine months ended September 30, 2024 to 10.9% in the nine
months ended September 30, 2025, primarily due to an increase in net profit from
RMB11,245.7 million in the nine months ended September 30, 2024 to RMB15,112.1 million
in the same period of 2025. See “— Period-to-Period Comparison of Results of Operations.”
FINANCIAL INFORMATION
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Return on Equity
Our return on equity decreased from 19.1% in 2022 to (5.1)% in 2023, primarily due to
the net loss we recorded in 2023. Our return on equity subsequently increased from (5.1)% in
2023 to 25.0% in 2024, primarily due to the net profit we recorded in 2024. Our annualized
return on equity increased from 19.5% in the nine months ended September 30, 2024 to 25.5%
in the nine months ended September 30, 2025, primarily due to an increase in net profit from
RMB11,245.7 million in the nine months ended September 30, 2024 to RMB15,112.1 million
in the same period of 2025. See “— Period-to-Period Comparison of Results of Operations.”
Operating Cash Flow Ratio
Our operating cash flow ratio decreased from 18.4% in 2022 to 8.9% in 2023, primarily
due to a the net loss we recorded in 2023. Our operating cash flow ratio subsequently increased
from 8.9% in 2023 to 27.2% in 2024, primarily due to the net profit we recorded in 2024.
Our operating cash flow ratio decreased from 30.2% in the nine months ended
September 30, 2024 to 25.6% in the nine months ended September 30, 2025, primarily due to
(i) a decrease in net cash inflow from operating activities, and (ii) an increase in revenue.
CAPITAL EXPENDITURES
During the Track Record Period, our capital expenditures consist of payment for
acquisition of fixed assets, intangible assets and other long-term assets. In 2022, 2023, 2024
and the nine months ended September 30, 2025, our capital expenditures amounted to
RMB15,738.9 million, RMB17,015.7 million, RMB12,380.7 million and RMB7,286.6 million,
respectively. We funded these expenditures mainly with cash generated from our operations
and bank borrowings.
Following the Global Offering, we will continue to incur capital expenditures to grow our
business. We plan to fund our planned capital expenditures primarily with cash flows generated
from our operations, bank borrowings and the net proceeds received from the Global Offering.
See “Future Plans and Use of Proceeds.” We may adjust our capital expenditures for any given
year according to our development plans or in light of market conditions and other factors we
believe to be appropriate.
CAPITAL COMMITMENTS
As of December 31, 2022, 2023, 2024 and the nine months ended September 30, 2025,
we did not have any material capital commitments.
FINANCIAL INFORMATION
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RELATED PARTY TRANSACTIONS
We enter into transactions with our related parties from time to time. For details about our
related party transactions during the Track Record Period, see Note X of Appendix I to this
prospectus.
Our Directors are of the view that each of the related party transactions set out in Note
X to the Accountants’ Report in Appendix I to this prospectus was conducted in the ordinary
course of business on an arm’s length basis and with normal commercial terms between the
relevant parties. Our Directors are also of the view that our related party transactions during
the Track Record Period would not distort our track record results or make our historical results
not reflective of our future performance.
BIOLOGICAL ASSETS AND V ALUATION
Under the CASBE, our biological assets include (i) consumable biological assets and (ii)
productive biological assets, and were measured at cost.
(i) Consumable biological assets include suckling piglets, piglets under nursing period,
hogs under finishing period and others. They are recognized in inventories and
carried as the lower of the cost and net realizable value at the balance sheet date. See
Note II.10 to the Accountants’ Report in Appendix I to this prospectus for the
measurement method of consumable biological assets, basis for determining net
realizable value and method for provision of consumable biological assets.
(ii) Productive biological assets are immature breeding hogs and mature breeding hogs.
Mature breeding hogs are reproductive boars and reproductive sows. Such
productive biological assets are presented as cost less accumulated depreciation and
impairment provision. See Note II.16 to the Accountants’ Report in Appendix I to
this prospectus for the basis of determining the cost, the depreciation method and
impairment provision.
Pursuant to the Chapter 4.10 under the Guide for New Listing Applicants published by the
Stock Exchange, we have engaged Jones Lang LaSalle Corporate Appraisal and Advisory
Limited (“ JLL”o rt h e“ Valuer”), a firm of independent qualified professional valuer, to
determine the fair value of of our biological assets. The valuation was carried out on a fair
value basis, which is defined as the price that would be received to sell an asset, or paid to
transfer a liability, in an orderly transaction between market participants at the measurement
date. To derive the fair value of the biological assets, the V aluer adopted two valuation
approaches, namely the market approach, and the cost approach based on the period and the
existence of an active market for the biological assets. Market approach was applied for piglets
under nursing period, hogs under finishing period and immature breeding hogs. Cost approach
was applied for suckling piglets, reproductive sows and boars.
FINANCIAL INFORMATION
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Pursuant to the Chapter 4.10 under the Guide, the following table sets forth the fair value
of our biological assets as measured by the V aluer as of the dates indicated:
As of December 31,
As of
September 30,
2022 2023 2024 2025
(RMB in millions)
Consumable biological
assets
– Suckling piglets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184,009.8 4,340.9 4,302.6 3,961.7
– Piglets under nursing
period /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11186,828.8 6,186.2 7,149.1 5,661.0
– Hogs under finishing
period /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111824,231.8 21,397.0 29,024.2 24,686.0
Subtotal /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111835,070.4 31,924.1 40,475.8 34,308.6
Productive biological
assets (1) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111811,774.0 12,085.0 14,274.8 10,537.9
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111846,844.5 44,009.0 54,750.6 44,846.5
Note:
(1) Productive biological assets include immature breeding hogs and mature breeding hogs. Mature
breeding hogs are reproductive sows and boars.
The fair value of our biological assets decreased by 6.1% from RMB46,844.5 million as
of December 31, 2022 to RMB44,009.0 million as of December 31, 2023, primarily due to a
decrease in market selling prices of hogs. The fair value of our biological assets increased by
24.4% from RMB44,009.0 million as of December 31, 2023 to RMB54,750.6 million as of
December 31, 2024, primarily due to an increase in market selling prices of hogs. The fair
value of our biological assets decreased by 18.1% from RMB54,750.6 million as of December
31, 2024 to RMB44,846.5 million as of September 30, 2025, primarily due to a decrease in
market selling prices of hogs.
FINANCIAL INFORMATION
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The following table sets forth the volume of our biological assets as of the dates
indicated:
As of December 31,
As of
September 30,
2022 2023 2024 2025
(thousand heads)
Consumable biological
assets
Suckling piglets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185,406 4,884 5,696 6,660
Piglets under nursing period /H1118 11,179 12,200 13,636 13,527
Hogs under finishing period /H1118 16,055 18,353 23,091 22,884
Subtotal /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111832,639 35,436 42,423 43,071
Productive biological assets 3,769 4,703 5,062 4,404
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111836,408 40,139 47,485 47,475
Our biological assets were independently valued by the V aluer. The V aluer is an
independent professional valuer not connected with us and has appropriate and extensive
experience in the valuation of biological assets.
Information About the Independent Valuer of Our Biological Assets
We have engaged Jones Lang LaSalle Corporate Appraisal and Advisory Limited, an
independent valuer, to determine the fair value of our biological assets as of December 31,
2022, 2023, 2024 and September 30, 2025 (the “ Valuation Date(s) ”) respectively. The key
valuers of the JLL team comprise Mr. Simon Chan and Professor Han Xuelei.
Mr. Simon Chan, executive director at JLL, is a fellow of the Hong Kong Institute of
Certified Public Accountants (HKICPA) and a fellow of CPA Australia. He is also a Certified
V aluation Analyst (CV A), a member of The International Association of Consultants, V aluers
and Analysts (IACV A), a member of Canadian Institute of Mining, Metallurgy and Petroleum
(CIM), and a member of the Australasian Institute of Mining and Metallurgy (AusIMM). Simon
oversees the business valuation services of JLL and has over 30 years of accounting, auditing,
corporate advisory and valuation experiences. He has provided a wide range of valuation
services to numerous listed and listing companies of different industries in China, Hong Kong,
Singapore and the United States. Mr. Chan oversaw the valuation of biological assets for the
initial public offerings and subsequent financial reports of China Modern Dairy Holdings Ltd
(stock code: 1117.HK), AustAsia Group Ltd. (stock code: 2425.HK), Y uanShengTai Dairy
Farm Limited (stock code: 1431.HK), Shandong Fengxiang Co., Ltd. (stock code: 9977.HK),
WH Group Limited (stock code: 288.HK) and Dekon Food And Agriculture Group (stock code:
2419.HK). He also led the valuation of other biological assets, such as hogs, trees, rabbits and
FINANCIAL INFORMATION
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chickens, for financial reporting purpose of Hong Kong listed companies including Chenming
Paper (stock code: 1812.HK), China Mengniu Dairy Company Limited (stock code: 2319.HK)
and China Kangda Food Company Limited (stock code: 834.HK), as well as numerous private
companies.
The V aluer appointed an expert consultant, Professor Han Xuelei ( ᒵ௛ᑜ), to assist in the
valuation. Professor Han Xuelei, with a PhD degree, is the Professor of Department of Animal
Genetics, Breeding and Reproduction in Henan Agriculture University (ุ༵ɽኪ), and the
council member of the Swine Production Branch of the Chinese Association of Animal Science
and V eterinary Medicine (ᖕᔼኪึቮሥኪʱึ), the Livestock and Poultry Genetic
Markers Branch of the Chinese Association of Animal Science and V eterinary Medicine ( ʕ਷
ᖕᔼኪึळອ፲ෂᅺাኪʱึ), the Swine Production Branch of the Henan Provincial
Association of Animal Science and V eterinary Medicine (ᖕᔼኪึቮሥኪʱึ),
and the Animal Reproduction Branch of the Henan Provincial Association of Animal Science
and V eterinary Medicine (ᐿಟኪʱึ). She is mainly engaged in the
teaching and research of swine genetic breeding and reproduction.
Based on market reputation and relevant background research, our Directors and the Joint
Sponsors are satisfied that JLL is independent from us and is competent in conducting a
valuation on our biological assets.
Valuation Methodology
In arriving at the assessed value, two generally accepted approaches have been
considered, namely, the market approach and the cost approach.
Market approach considers prices recently paid for similar assets, with adjustments made
to market prices to reflect the condition and utility of the appraised assets relative to the market
comparatives. Assets for which there is an established used market may be valued by this
approach.
Cost approach considers the cost to reproduce or replace in new condition the assets
appraised in accordance with current market prices for similar assets, with allowance for
accrued depreciation or obsolescence present, whether arising from physical, functional or
economic causes. The cost approach generally furnishes the most reliable indication of value
for assets without a known used market.
FINANCIAL INFORMATION
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The following valuation methods for each type of biological assets were adopted:
Suckling Piglets
The replacement cost approach under cost approach was adopted for valuing suckling
piglets. As they are to be born or only less than three-week old and there is insignificant
biological transformation that takes place since the initial cost incurrence, the recent costs
incurred approximates the replacement costs, including depreciation due to use of breeding
hogs and other associated costs.
Piglets under Nursing Period and Hogs under Finishing Period and Immature Breeding
Hogs
The market approach was adopted for valuing piglets under nursing period, hogs under
finishing period, and immature breeding hogs. Piglets under nursing period and hogs under
finishing period were assumed to be sold live or slaughtered when they reach the period of
finishing or at once as the finished hogs (hogs primarily for production of meat products). The
fair value of piglets under nursing period and hogs under finishing period were derived by
obtaining the market selling prices of the finished hogs, multiplying the unit price by the
corresponding quantities, less the expected costs to complete.
The fair value of the immature breeding hogs were derived by multiplying the market
selling prices of the immature breeding hogs by their corresponding quantities.
Reproductive Sows and Boars
As there were no active trading markets for mature breeding hogs at specific ages and
species, the replacement cost approach under cost approach was adopted for valuing
reproductive sows and boars. The costs that would be incurred by a typical participant seeking
to create or obtain the new breeding hogs (mature biological physical condition) (the “costs of
new breeding hogs”) were firstly obtained and then adjusted based on the service lives (number
of years reproducing or mating) until they were sold as culled breeding hogs.
Key Assumptions and Inputs
The key assumptions and inputs include the following:
Quantity
This valuation has relied on the figures and information provided by us for the biological
assets as of the V aluation Dates.
FINANCIAL INFORMATION
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Market Prices
The market price of finished hogs, immature breeding hogs and culled breeding hogs is
based on the transacted prices observed at or near the V aluation Date(s) in the respective
market. We operate the business across different regions, and each region has its own specific
supply and demand dynamics because of differences in factors such as local sow supply,
feeding cost, transportation cost and consumption habits. Therefore, these factors might result
in different market selling prices of hogs that we produced and sold in different regions on the
same date.
Set forth below are the range of key assumptions by type of biological assets adopted in
the valuation:
Assumptions used As of December 31, 2022
Suckling Piglets Replacement cost RMB225 to RMB310 per head
Piglets under nursing period and hogs
under finishing period
Market price RMB18 to RMB22 per kilogram
Immature breeding hogs Market price RMB1,500 to RMB2,670 per head
Reproductive sows and boars Replacement cost RMB2,760 to RMB9,000 per head
Assumptions used As of December 31, 2023
Suckling Piglets Replacement cost RMB195 to RMB352 per head
Piglets under nursing period and hogs
under finishing period
Market price RMB14 to RMB15 per kilogram
Immature breeding hogs Market price RMB1,800 to RMB2,200 per head
Reproductive sows and boars Replacement cost RMB2,840 to RMB9,000 per head
Assumptions used As of December 31, 2024
Suckling Piglets Replacement cost RMB188 to RMB259 per head
Piglets under nursing period and hogs
under finishing period
Market price RMB15 to RMB16 per kilogram
Immature breeding hogs Market price RMB1,900 to RMB2,330 per head
Reproductive sows and boars Replacement cost RMB3,140 to RMB9,000 per head
Assumptions used As of September 30, 2025
Suckling Piglets Replacement cost RMB164 to RMB276 per head
Piglets under nursing period and Hogs
under finishing period
Market price RMB12 to RMB16 per kilogram
Immature breeding hogs Market price RMB1,680 to RMB2,040 per head
Reproductive sows and boars Replacement cost RMB2,290 to RMB9,000 per head
FINANCIAL INFORMATION
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In valuing the fair value of piglets under nursing period and hogs under finishing period,
key assumptions and parameters including mortality rate, age for sale, weight and cost to
complete were considered:
– Mortality Rate . As there is the probability that the hogs might be dead due to
accidents or natural forces during rearing cycle, the mortality since the V aluation
Date(s) until complete and sold has been taken into consideration. In this exercise,
the mortality rate from weaning to finishing was with reference to the historical
actual mortality rate, which was calculated as the number of hogs dead divided by
the number of hogs weaned off.
– Average Age for Sale . With reference to the historical sales records and to the best
estimation of the management, piglets under nursing period and hogs under finishing
period are assumed to be sold as the finished hogs when they reach the certain age.
– Body Weight . The average body weight of the finished hogs when they are sold was
determined based on our operating and farming experience.
– Cost to Complete . The costs required to feed piglets under nursing period and hogs
under finishing period since the V aluation Date(s) until they were sold were
incorporated and were estimated based on the historical average costs provided by
us. The costs include feeding cost, medication and vaccination, labor, production
overheads, etc.
In valuing the fair value of reproductive sows and boars, key assumptions and parameters
including costs of new breeding hogs and service lives were considered:
– Costs of New Breeding Pigs . Under the replacement cost approach to assess the fair
value of reproductive sows and boars, the costs of new breeding hogs were firstly
obtained based on the historical average rearing costs or sales recording.
– Service Lives . To the best estimation of the management, reproductive sows and
boars normally used for mating for a period and then would be culled. The value of
reproductive sows and boars is depreciated on straight-line basis over the service
lives based on the costs of new breeding hogs.
Other Assumptions
In this valuation exercise, the V aluer assumed that all proposed facilities and systems will
be operated efficiently and have sufficient capacity for future expansion. The V aluer also
assumed that the historical trend and data will be maintained and there will be no material
change in the existing political, legal, technological, fiscal or economic condition that may
adversely affect our business.
FINANCIAL INFORMATION
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The V aluer planned and performed the valuation so as to obtain all the information and
explanations that the V aluer considered necessary in order to provide them with sufficient
evidence to express the opinion on the subject asset. The V aluer is of the opinion that the
valuation procedures they employed provide a reasonable basis for their opinion.
The Joint Sponsors have reviewed and considered the qualification and relevant valuation
experience of JLL and its professional valuers, and held various discussions with JLL in
relation to its valuation procedures, valuation bases and assumptions, valuation techniques and
information required to prepare the valuation report of the biological assets to better
understand the valuation process. In addition, the Joint Sponsors discussed with our
management with respect to the techniques chosen and the inputs used in the valuations. The
Joint Sponsors further compared the valuation technique chosen, bases and assumptions of the
valuation with those used in other similar transactions and market practice. Given the above,
the Joint Sponsors are satisfied that the valuation techniques methodology and major inputs
used in the valuation of our biological assets are appropriate and reasonable.
Sensitivity analysis
A significant increase/decrease in the estimated selling price and replacement cost in
isolation would result in a significant increase/decrease in the fair value of the biological
assets. As of December 31, 2022, 2023, 2024 and September 30, 2025, if transaction price
increases by 10%, the estimated fair value of biological assets would have increase by 8.7%
or RMB4,067 million, 9.3% or RMB4,114 million, 8.9% or RMB4,864 million and 8.9% or
RMB3,978 million respectively, and if transaction price decreases by 10%, the estimated fair
value of biological assets would have decrease by 8.7% or RMB4,084 million, 11.8% or
RMB5,202 million, 8.9% or RMB4,865 million and 8.9% or RMB3,985 million, respectively.
Stock take and internal control
We have established a standard internal protocol in relation to stock taking for all our hog
houses, which include scheduled and ad hoc stock take, so as to ensure the physical existence
and accuracy of data and information of our biological assets. We perform a full stock take for
each of our hog houses on a yearly basis and sampling stock take for monthly and quarterly
to collect the information such as headcount gender and age-grouping, health and breeding
status, which is accurately reflected in our hog management system. We also submit a
stock-take report to the financial department at our headquarters. Production personnel are
responsible for the stock take process, and financial personnel supervise and review the data.
We have formulated a comprehensive policy for biological asset management, which
covers the relevant accounting policies, transferring among age groups, purchase and disposal
of biological assets, breeding, record keeping and stock take. For our hog houses, the quantities
of livestock entering the premises and that of quantities livestock are recorded electronically
in our hog management system by our production personnel, which are reviewed by financial
department at our headquarters.
FINANCIAL INFORMATION
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OFF-BALANCE SHEET COMMITMENTS AND ARRANGEMENTS
As of the Latest Practicable Date, we had not entered into any off-balance sheet
arrangements. We also have not entered into any financial guarantees or other commitments to
guarantee the payment obligations of third parties. In addition, we have not entered into any
derivative contracts that are indexed to our equity interests and classified as shareholders’
equity. Furthermore, we do not have any retained or contingent interest in assets transferred to
an unconsolidated entity that serves as credit, liquidity or market risk support to such entity.
We do not have any variable interest in any unconsolidated entity that provides financing,
liquidity, market risk or credit support to us or that engages in leasing, hedging or research and
development services with us.
FINANCIAL RISKS DISCLOSURE
We are exposed to a variety of financial risks, including credit risk, liquidity risk, interest
rate risk and foreign currency risk. We aim to achieve an appropriate balance between the risks
and benefits from our use of financial instruments and to mitigate the adverse effects that the
risks of financial instruments have on our financial performance. Based on these objectives,
our risk management policies have been established to identify and analyze the risks we face,
to set appropriate risk limits and controls and to monitor risks. Risk management policies and
systems are reviewed regularly to reflect changes in market conditions and our operating
activities. See Note VIII to the Accountants’ Report in Appendix I to this prospectus.
Credit Risk
Credit risk is the risk that one party to a financial instrument will cause a financial loss
for the other party by failing to discharge an obligation. Our credit risk is primarily attributable
to cash at bank, accounts receivable and other receivables. Exposure to these credit risks is
monitored by management on an ongoing basis.
Our cash at bank is mainly held with well-known financial institutions. Management does
not foresee any significant credit risks from cash at bank and does not expect that these
financial institutions may default and cause losses to us.
Our exposure to credit risk is influenced mainly by the individual characteristics of each
customer rather than the industry or country/region in which the customers operate. Therefore,
significant concentrations of credit risk primarily arise when we have significant exposure to
individual customers.
In respect of accounts receivable and other receivables, we have established a credit
policy under which individual credit evaluations are performed on all customers to determine
the credit limit and terms applicable to the customers. These evaluations focus on the
customers’ financial position, the external ratings of the customers and their bank credit
records where available. Normally, we do not obtain collateral from customers.
FINANCIAL INFORMATION
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The maximum exposure to credit risk of us is represented by the carrying amount of each
financial asset (including derivative financial instruments) in the balance sheet.
Liquidity Risk
Liquidity risk is the risk that an enterprise will encounter difficulty in meeting obligations
that are settled by delivering cash or another financial asset. We are responsible for cash
management, including cash inflows from our operating activities and obtaining bank facilities
to cover expected cash demands. Meanwhile, we are responsible for monitoring long-term
borrowings with contractual covenants to ensure compliance with contractual covenants during
the borrowing period. Our policy is to regularly monitor our liquidity requirements and our
compliance with lending covenants, to ensure that it maintains sufficient reserves of cash,
readily realizable marketable securities and adequate committed lines of facilities from major
financial institutions to meet its liquidity requirements in the short and longer term.
Interest Rate Risk
Interest-bearing financial instruments at fixed rates and at variable rates expose us to fair
value interest rate risk and cash flow interest risk, respectively. We determine the appropriate
weightings for fixed and floating rate interest-bearing instruments based on current market
conditions and performs regular reviews and monitoring to achieve an appropriate mix of fixed
and floating rate exposure. As of December 31, 2022, 2023, 2024 and September 30, 2025, the
fixed rate interest-bearing financial instruments amounted to net financial liabilities of
RMB43,074.8 million, RMB45,121.1 million, RMB47,787.7 million and RMB26,705.1
million, respectively. As of December 31, 2022, 2023, 2024 and September 30, 2025, the
variable rate interest-bearing financial instruments amounted to net financial assets of
RMB7,960.6 million, net financial liabilities of RMB1,125.5 million, net financial liabilities of
RMB3,093.4 million and net financial liabilities of RMB13,855.7 million, respectively.
As of December 31, 2022, it was estimated that a general increase of 50 basis points in
interest rates, with all other variables held constant, would increase our equity by RMB29.9
million and net profit by RMB29.9 million. As of December 31, 2023 and 2024 and September
30, 2025, it was estimated that a general increase of 50 basis points in interest rates, with all
other variables held constant, would decrease our equity by RMB4.2 million, RMB11.6 million
and RMB26.0 million, respectively and net profit by RMB4.2 million, RMB11.6 million and
RMB26.0 million, respectively.
The sensitivity analysis above indicates the instantaneous change in net profit and equity
that would arise assuming that the change in interest rates had occurred at the balance sheet
date and had been applied to re-measure those financial instruments held by us which expose
us to fair value interest rate risk at the balance sheet date. In respect of the exposure to cash
flow interest rate risk arising from floating rate non-derivative instruments held by us at the
balance sheet date, the impact on net profit and equity of such a change in interest rates is
estimated as an annualized impact on interest expense or income.
FINANCIAL INFORMATION
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Foreign Currency Risk
In respect of cash at bank and on hand, accounts and bills payable and interest-bearing
loans denominated in foreign currencies other than the functional currency, we ensure that our
net exposure is kept to an acceptable level by buying or selling foreign currencies at spot rates
when necessary to address short-term imbalances.
DIVIDENDS AND DIVIDEND POLICY
In October 2024, our Shareholder Return Plan for 2024-2026 was adopted. Pursuant to
this plan, under the premise of ensuring our sustainable operation and long-term development,
if the Company is profitable and the accumulated undistributed profits are positive for the year
ended December 31, 2024, 2025 or 2026, the dividends will be distributed by the Company in
cash in the current and/or subsequent year and the dividends should not be less than 40% of
the distributable profits realized for each of the years ended December 31, 2024, 2025 or 2026.
Our Company declared dividends of RMB4,003.1 million, nil, RMB7,587.8 million and
RMB5,002.3 million, attributable to the years ended December 31, 2022, 2023, 2024 and the
nine months ended September 30, 2025, respectively. As of the Latest Practicable Date, we had
paid these dividends in full. Any future declaration and payment, as well as the amount of
dividends, will be subject to our Articles of Association and the relevant PRC laws. We
currently do not have any fixed dividend pay-out ratio. No dividend shall be declared or
payable except out of our profits and reserves lawfully available for distribution.
WORKING CAPITAL CONFIRMATION
Our Directors are of the opinion that, taking into account the net proceeds from the Global
Offering and the financial resources available to us, including cash and cash equivalents, we
have sufficient working capital for our present requirements, that is at least 12 months from the
date of this prospectus.
DISTRIBUTABLE RESERVES
As of September 30, 2025, our distributable reserves amounted to RMB58,963.0 million.
PROFIT ESTIMATE FOR THE YEAR ENDED DECEMBER 31, 2025
We have prepared the following profit estimate for the year ended December 31, 2025.
Estimated consolidated net profit for the
year ended December 31, 2025 /H1118/H1118/H1118/H1118/H1118/H1118/H1118
Not less than RMB15.1 billion
FINANCIAL INFORMATION
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Notes:
(1) The bases on which the above profit estimate has been prepared are summarized in Part A of Appendix
IIA to this prospectus. Our Directors have prepared the estimated consolidated net profit for the year
ended December 31, 2025 based on the audited consolidated results of our Group for the nine months
ended September 30, 2025, the unaudited consolidated results based on the management accounts of our
Group for the three months ended December 31, 2025. The profit estimate has been prepared on a basis
consistent in all material respects with the accounting policies currently adopted by our Group as set out
in Note II to the Accountants’ Report in Appendix I to this prospectus.
LISTING EXPENSES
Listing expenses represent professional fees, underwriting commissions and other fees
incurred in connection with the Global Offering. We estimate that our listing expenses will be
approximately RMB201.5 million, representing 2.1% of the gross proceeds (based on the
mid-point of our indicative price range for the Global Offering and assuming that the
Over-Allotment Option is not exercised) of the Global Offering. We estimate that
approximately RMB14.6 million of our listing expenses is expected to be recognized in the
consolidated income statement as general and administrative expenses and approximately
RMB186.9 million is expected to be recognized as a deduction in equity directly upon the
Listing. Our Directors do not expect such expenses to materially impact our results of
operations in 2025. By nature, our listing expenses are composed of (i) underwriting
commission of approximately RMB136.5 million and (ii) non-underwriting related expenses of
approximately RMB65.0 million, which consist of fees and expenses of legal advisors and
Reporting Accountants of approximately RMB35.5 million and other fees and expenses of
approximately RMB29.5 million.
UNAUDITED PRO FORMA ADJUSTED CONSOLIDATED NET TANGIBLE ASSETS
See “Appendix II — Unaudited Pro Forma Financial Information.”
NO MATERIAL ADVERSE CHANGE
Our Directors have confirmed that up to the date of this prospectus there has been no
material adverse change in our financial or trading position or prospects since September 30,
2025, being the end date of the periods reported in Appendix I to this prospectus and there is
no event since September 30, 2025 that would materially affect the information as set out in
the Accountants’ Report in Appendix I to this prospectus.
DISCLOSURE REQUIRED UNDER THE LISTING RULES
Our Directors confirm that as of the Latest Practicable Date, there was no circumstance
that would give rise to a disclosure requirement under Rules 13.13 to 13.19 of the Listing
Rules.
FINANCIAL INFORMATION
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FUTURE PLANS
See “Business — Our Strategies” for a detailed discussion of our future plans.
USE OF PROCEEDS
Assuming an Maximum Offer Price of HK$39.0 per Offer Share, we estimate that we will
receive net proceeds of approximately HK$10,459.7 million from the Global Offering after
deducting the underwriting commissions, fees and other estimated expenses in connection with
the Global Offering and assuming that the Over-allotment Option is not exercised, or
HK$12,038.1 million if the Over-allotment Option is exercised in full. In line with our
strategies, we intend to use our proceeds from the Global Offering for the purposes and in the
amounts set below:
Y ear ended December 31,
Total
Approximate
% of the total2026 2027 2028
(HK$ million)
Strategic global expansion and
market diversification /H1118/H1118/H1118/H1118/H1118/H1118/H111840.0% 40.0% 20.0% 6,275.8 60.0%
Pioneering technology innovation
across the value chain via R&D
investments /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111850.0% 40.0% 10.0% 3,137.9 30.0%
Working capital and general
corporate purposes /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118100.0% – – 1,046.0 10.0%
Total/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111810,459.7 100.0%
 Approximately 60.0% of the net proceeds or approximately HK$6,275.8 million will
be used in our strategic global expansion and market diversification. In particular:
(i) Approximately 30.0% of the net proceeds or approximately HK$3,137.9
million will be used to enhance our supply chain capabilities for global
expansion and our competitive edge in overseas markets by securing a stable
supply of feed ingredients through international sourcing. For example, we
intend to proactively source international grain supplies, so as to procure a
stable supply of feed ingredients. According to Frost & Sullivan, overseas
regions such as Brazil and Argentina mainly export agricultural products,
including barley, corn, and sorghum, which are our key feed ingredients at
lower procurement prices from time to time. We plan to proactively explore
international grain supplies, which ensure a stable supply of feed ingredients.
By leveraging the access to agricultural products and supplies in overseas
countries, we intend to procure high-quality grains globally, while reducing our
feed costs. For instance, we plan to procure feed ingredients including barley,
sorghum and DDGS (distillers dried grains with solubles) from overseas
suppliers in regions such as South America and Oceania;
FUTURE PLANS AND USE OF PROCEEDS
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(ii) Approximately 20.0% of the net proceeds or approximately HK$2,091.9
million will be used to strengthen our overseas market presence and coverage,
including the Southeast Asia market, such as Vietnam and Thailand, etc.. We
intend to provide technologies, equipment and software solutions to local hog
farming operators in those markets. We plan to work closely with leading
overseas operators to further improve our technologies. Specifically:
 Approximately 2.5% of the net proceeds or approximately HK$261.5
million will be used to expand our overseas talent pool by recruiting
approximately 200 personnel by 2028 to support our overseas expansion,
which mainly include (a) approximately 60 local technical specialists
responsible for market research, partnership development and product
launches, (b) approximately 100 operation personnel handling logistics,
recruitment and talent pipeline management, (c) approximately 20
compliance personnel overseeing accounting, legal compliance and
contract support and (d) approximately 20 foreign language talents
ensuring effective cross-cultural communication and localization. We
plan to commence our own hog farming operations in overseas market(s)
by 2028;
 Approximately 3.8% of the net proceeds or approximately HK$397.5
million will be used to establish our overseas industrial center in
Southeast Asia with a team of over 200 specialists covering hog farming,
supply chain management, environmental protection and equipment,
which is aimed at establishing a stable, efficient, cost-competitive, and
locally adaptive equipment supply chain and continuously upgrade the
supply chain information system, so as to enhance operational efficiency
and responsiveness in local markets to improve the quality of technical
services, which strengthen our competitiveness in overseas markets. We
aim to achieve enhanced visibility, intelligence, and resilience of the
supply chain to support our long-term business development in Southeast
Asia. This includes: (a) accurately identifying the market demand for
equipment and service for customers in the Southeast Asian market, (b)
collecting information on potential local suppliers and implementing
tiered management of qualified suppliers, (c) establishing communication
channels with key suppliers to jointly resolve issues, and foster strategic
partnerships, (d) formulating operating procedures that are suitable for
local customer needs and regulatory requirements, and (e) selecting
supply chain management software and tools that are compatible with the
specific characteristics of the Southeast Asian market; and
FUTURE PLANS AND USE OF PROCEEDS
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 Approximately 13.7% of the net proceeds or approximately HK$1,433.0
million will be used to enhance our collaborations with leading overseas
companies including local hog farming enterprises to strengthen our
technological developments. We plan to establish approximately one to
two joint ventures by 2027, which will generate income based on profit
distribution of such joint venture(s); and
(iii) Approximately 10.0% of the net proceeds or approximately HK$1,046.0
million will be used to fund strategic initiatives, including mergers and
acquisitions, alliances, joint ventures, or minority investments, to strengthen
our global presence and enhance our competitiveness as a leading global hog
farming company. As the global hog farming industry is highly fragmented,
there are market opportunities to consolidate market shares with expanding
production capacity in many countries, according to Frost & Sullivan. As of the
Latest Practicable Date, we had not identified any investment or acquisition
target or enter into any definitive investment or acquisition agreement. We will
carefully evaluate the relevant acquisition targets based on factors, including
their financial performance, operation scale, business competitive advantages,
financial internal control system, corporate governance, and local market
development potential. Regarding the size of the potential targets, we typically
aim to acquire targets with an annual production capacity of 0.5 million heads
of hogs. According to Frost & Sullivan, there are more than 2,000 potential
acquisition and investment targets in Vietnam, the Philippines and Brazil that
are in the hog farming business, that could be the targets of potential strategic
investments and acquisitions for us.
 Approximately 30.0% of the net proceeds or approximately HK$3,137.9 million will
be used for pioneering technological innovation across the value chain via R&D
investments over the next three years to consolidate our competitive advantages in
breeding, smart farming, nutrition management, and biosecurity. We plan to recruit
over 200 new R&D personnel worldwide by 2028, who will focus on R&D related
to breeding, nutrition and feed, biosecurity, smart hog farming and environmental
protection. In particular, we intend to enhance our breeding capabilities which will
enhance genetic selection capabilities and improve breeding hog quality through
collaborations with academic institutions. This initiative will improve breeding hog
quality through collaborations with academic institutions, focusing on smart hog
evaluation and big-data genetic assessment for breeding hogs. We also intend to
enhance our smart hog farming capabilities by exploring the adoption of new
advanced technologies in our hog farming process such as the use of advanced
technology in quality inspection of feed ingredients, storage, processing plan,
fermentation and transportation throughout our business. We plan to research
advanced technology to optimize our monitoring equipment and inspection robots,
and improve the efficiency of diagnosis by photographing the hogs for symptoms.
Further, we intend to advance our synthetic biology and amino acid technologies to
enhance our R&D on feed ingredient alternatives further researching optimal
FUTURE PLANS AND USE OF PROCEEDS
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nutritional requirements and optimize the nutritional profiles for hogs to boost hog
health. Lastly, we intend to invest in the R&D to enhance biosecurity capabilities,
building a health-centered farming system targeting disease eradication and
antibiotic-free operations. We plan to research on converting manure-based carbon,
nitrogen and phosphorus into agricultural resources, contributing to green and
low-carbon economy. The following table sets forth the further breakdown of
proceeds by R&D project:
Allocation of the
estimated use of
proceeds R&D Projects R&D Purposes
Approximately
10.7% or
HK$1,119.2
million /H1118/H1118/H1118/H1118/H1118/H1118/H1118
Breeding Hog R&D
Project
Improve the carcass traits of breeding hogs,
select genetics efficiently and accurately,
improve the performance of hogs, and
produce healthy, delicious, and high-quality
pork
Approximately 9.2%
or HK$962.3
million /H1118/H1118/H1118/H1118/H1118/H1118/H1118
Hog Health
Management
Project
Through disease early warning and prevention
and control, ensure the health of hogs,
improving pig breeding efficiency and
reducing farming costs
Approximately 8.2%
or HK$857.7
million /H1118/H1118/H1118/H1118/H1118/H1118/H1118
Smart Hog House
R&D Project
Build smart hog houses to ensure a healthy
and suitable growth environment for hogs
and improve their growth efficiency
Approximately 1.3%
or HK$136.0
million /H1118/H1118/H1118/H1118/H1118/H1118/H1118
Nutrition R&D
Project
Explore the optimal nutritional requirements
of hogs, develop new raw materials and
continuously optimize the formula
Approximately 0.6%
or HK$62.8
million /H1118/H1118/H1118/H1118/H1118/H1118/H1118
Environmental
Protection R&D
Project
Sterilize and deodorize hog farms, explore the
transformation paths of various elements
such as carbon, nitrogen, and phosphorus in
manure in breeding and agricultural
systems, so as to realize green, low-carbon,
and efficient resource recycling, protect the
ecological environment, and create
economic value
 Approximately 10.0% of the net proceeds or approximately HK$1,046.0 million will
be used for working capital and general corporate purposes.
To the extent that the net proceeds from the Global Offering (including the net proceeds
from the exercise of the Over-allotment Option) are either less than expected, we will adjust
our allocation of the net proceeds for the above purposes on a pro rata basis.
FUTURE PLANS AND USE OF PROCEEDS
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If any part of our development plan does not proceed as planned for reasons such as
changes in government policies that would render the development of any of our projects not
viable, or the occurrence of force majeure events, we will carefully evaluate the situation and
may reallocate the net proceeds from the Global Offering.
To the extent that the net proceeds of the Global Offering are not immediately used for
the above purposes, we will only deposit those net proceeds into short-term interest-bearing
accounts at licensed commercial banks and/or other authorized financial institutions (as
defined under the SFO or applicable laws and regulations in other jurisdictions). In such event,
we will comply with the appropriate disclosure requirements under the Listing Rules.
FUTURE PLANS AND USE OF PROCEEDS
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HONG KONG UNDERWRITERS
Morgan Stanley Asia Limited
CLSA Limited
Goldman Sachs (Asia) L.L.C.
China International Capital Corporation Hong Kong Securities Limited
Merrill Lynch (Asia Pacific) Limited
CMB International Capital Limited
China Merchants Securities (HK) Co., Limited
ABCI Securities Company Limited
BOCI Asia Limited
BOCOM International Securities Limited
CCB International Capital Limited
Changjiang Securities Brokerage (HK) Limited
China Galaxy International Securities (Hong Kong) Co., Limited
China Everbright Securities (HK) Limited
Futu Securities International (Hong Kong) Limited
UNDERWRITING ARRANGEMENTS AND EXPENSES
Hong Kong Public Offering
Hong Kong Underwriting Agreement
Pursuant to the Hong Kong Underwriting Agreement, we are offering 27,395,200 Hong
Kong Offer Shares for subscription by the public in Hong Kong at the Offer Price on, and
subject to, the terms and conditions set out in this prospectus.
Subject to:
(a) the Listing Committee of the Stock Exchange granting or agreeing to grant the
listing of, and permission to deal in, our H Shares to be issued as mentioned herein
(including any additional H Shares which may be made available pursuant to the
exercise of the Over-allotment Option), or otherwise described in this prospectus
and such listing of and permission to deal in the H Shares not subsequently having
been revoked, withdrawn, amended or invalidated prior to the commencement of
dealings in the H Shares on the Stock Exchange;
(b) the International Underwriting Agreement having been signed and becoming, and
continuing to be, unconditional in accordance with its terms and not having been
terminated in accordance with its terms or otherwise, prior to 8:00 a.m. on the
Listing Date; and
(c) certain other conditions set out in the Hong Kong Underwriting Agreement,
the Hong Kong Underwriters have agreed severally, but not jointly, to subscribe for or
procure subscribers for their respective applicable proportions of the Hong Kong Offer
Shares which are being offered but are not taken up under the Hong Kong Public Offering
on the terms and subject to the conditions of this prospectus and the Hong
KongUnderwriting Agreement.
UNDERWRITING
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Grounds for Termination
The Overall Coordinators (for themselves and on behalf of the Hong Kong Underwriters)
and the Joint Sponsors shall be entitled by notice (in writing) to the Company to terminate the
Hong Kong Underwriting Agreement with immediate effect if prior to 8:00 a.m. on the Listing
Date:
(1) there develops, occurs, exists or comes into force:
(a) any new law or regulation or any change or development involving a
prospective change or any event or series of events or circumstances likely to
result in a change or a development involving a prospective change in existing
laws or regulations, or the interpretation or application thereof by any court or
any competent authority in or affecting Hong Kong, the PRC, the United
States, the United Kingdom, the European Union (or any member thereof)
(each a “ Relevant Jurisdiction ” and collectively, the “ Relevant
Jurisdictions ”); or
(b) any change or development involving a prospective change, or any event or
series of events or circumstances likely to result in a change or prospective
change, in any local, national, regional or international financial, political,
military, industrial, economic, fiscal, legal, regulatory, currency, credit or
market conditions, taxation, equity securities or currency exchange rate or
controls or any monetary or trading settlement system, or foreign investment
regulations (including, without limitation, a devaluation of the Hong Kong
dollar, United States dollar or Renminbi against any foreign currencies, a
change in the system under which the value of the Hong Kong dollar is linked
to that of the United States dollar or the Renminbi is linked to any foreign
currency or currencies) or other financial markets (including, without
limitation, conditions and sentiments in stock and bond markets, money and
foreign exchange markets, the inter-bank markets and credit markets) in or
affecting any Relevant Jurisdictions, or affecting an investment in the Offer
Shares; or
(c) any event or series of events, or circumstances in the nature of force majeure
(including, without limitation, any acts of government, declaration of a
regional, national or international emergency or war, calamity, crisis, economic
sanctions, strikes, labor disputes, other industrial actions, lock-outs, fire,
explosion, flooding, tsunami, earthquake, volcanic eruption, civil commotion,
riots, rebellion, public disorder, paralysis in government operations, acts of
war, epidemic, pandemic, outbreak or escalation, mutation or aggravation of
diseases, accident or interruption or delay in transportation, local, national,
UNDERWRITING
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--- page 435 ---
regional or international outbreak or escalation of hostilities (whether or not
war is or has been declared), act of God or act of terrorism (whether or not
responsibility has been claimed)) in or affecting any of the Relevant
Jurisdictions; or
(d) the imposition or declaration of any moratorium, suspension or limitation
(including without limitation, any imposition of or requirement for any
minimum or maximum price limit or price range) on (i) the trading in shares
or securities generally on the Stock Exchange, the Shanghai Stock Exchange,
the Shenzhen Stock Exchange, the New Y ork Stock Exchange, the NASDAQ
Global Market or the London Stock Exchange; or (ii) the trading in any
securities of the Company listed or quoted on a stock exchange or an
over-the-counter market; or
(e) any breach of any of the obligations or undertakings imposed upon the
Company or any cornerstone investor (as applicable) to the Hong Kong
Underwriting Agreement, the International Underwriting Agreement or the
Cornerstone Investment Agreements, or
(f) the commencement by any authority or other regulatory or political body or
organization of any public action or investigation against a member of the
Group or a Director or a senior management member of the Company or
announcing an intention to take any such action; or
(g) the imposition or declaration of any general moratorium on banking activities
in or affecting any of the Relevant Jurisdictions or any disruption in
commercial banking or foreign exchange trading or securities settlement or
clearing services, procedures or matters in or affecting any of the Relevant
Jurisdictions; or
(h) other than with the prior written consent of the Overall Coordinators, the issue
or requirement to issue by the Company of a supplement or amendment to this
prospectus or other documents in connection with the offer and sale of the
Offer Shares pursuant to the Companies (Winding Up and Miscellaneous
Provisions) Ordinance or the Listing Rules or upon any requirement or request
of the Stock Exchange and/or the SFC; or
(i) the imposition of sanctions or export controls in whatever form, directly or
indirectly, on any member of the Group or by or on any Relevant Jurisdiction,
or the withdrawal of trading privileges which existed on the date of the Hong
Kong Underwriting Agreement, in whatever form, directly or indirectly, by, or
for, any Relevant Jurisdiction; or
UNDERWRITING
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--- page 436 ---
(j) that the chairman of the Board, any Director or any member of senior
management of the Company named in the prospectus seeks to retire, or is
removed from office or vacating his/her office; or
(k) any valid demand by creditors for payment or repayment of indebtedness of
any member of the Group or in respect of which any member of the Group is
liable prior to its stated maturity; or
(l) an order or petition is presented for the winding-up or liquidation of any
member of the Group, or any member of the Group makes any composition or
arrangement with its creditors or enters into a scheme of arrangement or any
resolution is passed for the winding-up of any member of the Group or a
provisional liquidator, receiver or manager is appointed over all or part of the
assets or undertaking of any member of the Group or anything analogous
thereto occurs in respect of any member of the Group; or
(m) any non-compliance of the prospectus (or any other documents used in
connection with the contemplated offering, allotment, issue, subscription or
sale of any of the Offer Shares), the CSRC Filings (as defined in the Hong
Kong Underwriting Agreement) or any aspect of the Global Offering with the
Listing Rules or any other applicable Laws; or
(n) any litigation, dispute, legal action or claim or regulatory or administrative
investigation or action being threatened, instigated or announced against any
member of the Group or any Director or senior management members as named
in the prospectus; or
(o) any contravention by any member of the Group or any Director or any member
of the senior management of the Company of the Listing Rules or applicable
Laws,
which, in any such case individually or in the aggregate, in the sole and absolute
opinion of the Joint Sponsors and the Overall Coordinators (for themselves and on
behalf of the Hong Kong Underwriters):
(a) has or will or may have a material adverse effect or any development involving
a prospective material adverse effect, on the profits, losses, results of
operations, assets, liabilities, general affairs, business, management,
performance, prospects, shareholders’ equity, position or condition (financial,
trading or otherwise) of the Group, taken as a whole (“ Material Adverse
Effect ”);
(b) has or will or may have a material adverse effect on the success of the Global
Offering or the level of applications under the Hong Kong Public Offering or
the level of indications of interest under the International Offering; or
UNDERWRITING
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--- page 437 ---
(c) makes or will make or may make it impracticable, inadvisable, inexpedient or
incapable for any material part of the Hong Kong Underwriting Agreement, the
Hong Kong Public Offering or the Global Offering to be performed or
implemented as envisaged, or for the Hong Kong Public Offering and/or the
Global Offering to proceed, or to market the Global Offering or the delivery or
distribution of the Offer Shares on the terms and in the manner contemplated
by the Offering Documents (as defined in the Hong Kong Underwriting
Agreement); or
(d) has or will or may have the effect of making any part of the Hong Kong
Underwriting Agreement (including underwriting) incapable of performance in
accordance with its terms or preventing the processing of applications and/or
payments pursuant to the Global Offering or pursuant to the underwriting
thereof; or
(2) there has come to the notice of the Joint Sponsors and the Overall Coordinators (for
themselves and on behalf of the Hong Kong Underwriters) that:
(a) any statement contained in any of the Offering Documents, the CSRC Filings
and/or any notices, announcements, advertisements, communications or other
documents issued or used by, for or on behalf of the Company in connection
with the Hong Kong Public Offering (including any supplement or amendment
thereto) (the “ Global Offering Documents ”) was, when it was issued, or has
become untrue, incorrect, inaccurate in any material respect or misleading; or
that any estimate, forecast, expression of opinion, intention or expectation
contained in any such documents, was, when it was issued, or has become
unfair or misleading in any respect or based on untrue, dishonest or
unreasonable assumptions or given in bad faith; or
(b) any matter has arisen or has been discovered which would, had it arisen or been
discovered immediately before the date of the prospectus, constitute a material
omission or misstatement in any Global Offering Document; or
(c) any breach of, or any event or circumstance rendering untrue or incorrect or
misleading in any respect, any of the representations, warranties and
undertakings given by the Company in the Hong Kong Underwriting
Agreement or the International Underwriting Agreement; or
(d) any event, act or omission which gives rise or is likely to give rise to any
liability of any of the Company pursuant to the indemnities in the Hong Kong
Underwriting Agreement; or
(e) any breach of any of the obligations or undertakings imposed upon the
Company;
UNDERWRITING
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--- page 438 ---
(f) there is any change or development involving a prospective change,
constituting or having a Material Adverse Effect; or
(g) the Company withdraws the prospectus (and/or any other documents used in
connection with the subscription or sale of any of the Offer Shares pursuant to
the Global Offering) or the Global Offering; or
(h) that the approval by the Listing Committee of the listing of, and permission to
deal in, the H Shares in issue and to be issued pursuant to the Global Offering
(including pursuant to any exercise of the Over-allotment Option) is refused or
not granted, other than subject to customary conditions, on or before the
Listing Date, or if granted, the approval is subsequently withdrawn, cancelled,
qualified (other than by customary conditions), revoked or withheld; or
(i) any person (other than any of the Joint Sponsors) has withdrawn its consent to
the issue of the prospectus with the inclusion of its reports, letters and/or legal
opinions (as the case may be) and references to its name included in the form
and context in which it respectively appears; or
(j) any prohibition by any authority applicable to the Company for whatever
reason from offering, allotting, issuing or selling any of the Offer Shares
pursuant to the terms of the Global Offering; or
(k) (A) the notice of acceptance of the CSRC Filings issued by the CSRC and/or
the results of the CSRC Filings published on the website of the CSRC is
rejected, withdrawn, revoked or invalidated; or (B) other than with the prior
written consent of the Overall Coordinators, the issue or requirement to issue
by the Company of a supplement or amendment to the CSRC Filings pursuant
to the CSRC Rules or upon any requirement or request of the CSRC; or (C) any
material non-compliance of the CSRC Filings with the CSRC Rules; or
(l) (i) a material portion of the orders placed or confirmed in the bookbuilding
process or (ii) any investment commitment made by any cornerstone investors
under the Cornerstone Investment Agreements signed with such cornerstone
investors, has been withdrawn, terminated or cancelled; or the payment of the
relevant order or investment amount has not been received or settled in the
stipulated time and manner or otherwise.
UNDERWRITING
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Undertakings to the Hong Kong Stock Exchange pursuant to the Listing Rules
(A) Undertakings by our Company
Pursuant to Rule 10.08 of the Listing Rules, we have undertaken to the Stock Exchange
that no further Shares or securities convertible into equity securities of the Company (whether
or not of a class already listed) may be issued by the Company or form the subject of any
agreement to such an issue within six months from the Listing Date (whether or not such issue
of Shares or securities of the Company will be completed within six months from the Listing
Date), except for: (a) any capitalization issue, capital reduction or consolidation or sub-
division of shares; or (b) issue of shares or securities pursuant to the Global Offering; or (c)
the Convertible Bonds issued by our Company and the employee incentive plans of the
Company may adopt; or (d) any other applicable circumstances provided under Rule 10.08 of
the Listing Rules.
(B) Undertakings by our Controlling Shareholders
In accordance with Rule 10.07(1) of the Listing Rules, each of our Controlling
Shareholders has undertaken to the Stock Exchange and us that, except pursuant to the Global
Offering (including pursuant to the Over-allotment Option), he/she/it shall not and shall
procure that the registered holders of the Shares controlled by him/her/it (if applicable) shall
not:
(a) in the period commencing on the date by reference to which disclosure of his/her/its
shareholding is made in this prospectus and ending on the date which is six months
from the Listing Date (the “ First Six-month Period ”), dispose of, nor enter into any
agreement to dispose of, or otherwise create any options, rights, interests or
encumbrances in respect of, any of those securities of the Company in respect of
which it is shown by this prospectus to be the beneficial owner (the “ Relevant
Securities ”); and
(b) in the period of six months commencing from the expiry of the First Six-month
Period (the “ Second Six-month Period ”), dispose of, nor enter into any agreement
to dispose of, or otherwise create any options, rights, interests or encumbrances in
respect of, any of the Relevant Securities if, immediately following such disposal or
upon the exercise or enforcement of such options, rights, interests or encumbrances,
any of them would cease to be a Controlling Shareholder or a member of the group
of Controlling Shareholders, or together with the other Controlling Shareholders
would cease to be a group of Controlling Shareholders.
UNDERWRITING
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In accordance with Note 3 to Rule 10.07(2) of the Listing Rules, each of our Controlling
Shareholders has also undertaken to the Stock Exchange and us that during the First Six-month
Period and the Second Six-month Period, he/she/it shall:
(a) when he/she/it pledges or charges any Shares or securities of the Company
beneficially owned by him/her/it in favor of an authorized institution (as defined in
the Banking Ordinance, Chapter 155 of the Laws of Hong Kong) for a bona fide
commercial loan, immediately inform us in writing of such pledge or charge
together with the number of such Shares or securities so pledged or charged; and
(b) when he/she/it receives any indications, either verbal or written, from the pledgee or
charge that any of the pledged or charged Shares or securities of the Company will
be disposed of, immediately inform the Company in writing of such indications.
We will inform the Stock Exchange as soon as we have been informed of the matters
referred to in paragraphs (a) and (b) above by the Controlling Shareholders and make a public
disclosure in relation to such information by way of an announcement in accordance with Rule
2.07C of the Listing Rules as soon as possible.
Undertakings Pursuant to the Hong Kong Underwriting Agreement
Undertakings by our Company
Except pursuant to the Global Offering (including pursuant to the Over-allotment
Option), at any time after the date of Hong Kong Underwriting Agreement up to and including
the date falling six months after the Listing Date (the “ First Six Month Period ”), it will not,
without the prior written consent of the Joint Sponsors and the Overall Coordinators (for
themselves and on behalf of the Hong Kong Underwriters) and unless in compliance with the
requirements of the Listing Rules:
(a) allot, issue, sell, accept subscription for, offer to allot, issue or sell, contract or agree
to allot, issue or sell, assign, mortgage, charge, pledge, hypothecate, lend, grant or
sell any option, warrant, contract or right to subscribe for or purchase, grant or
purchase any option, warrant, contract or right to allot, issue or sell, or otherwise
transfer or dispose of or create an Encumbrance over, or agree to transfer or dispose
of or create an Encumbrance over, either directly or indirectly, conditionally or
unconditionally, any legal or beneficial interest in the share capital or any other
equity securities of the Company or any interest in any of the foregoing (including,
without limitation, any equity securities convertible into or exchangeable or
exercisable for or that represent the right to receive, or any warrants or other rights
to purchase any share capital or other equity securities of the Company, as
applicable), or deposit any share capital or other securities of the Company, as
applicable, with a depositary in connection with the issue of depositary receipts; or
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(b) enter into any swap or other arrangement that transfers to another, in whole or in
part, any of the economic consequences of ownership (legal or beneficial) of the
Shares or any other equity securities of the Company, or any interest in any of the
foregoing (including, without limitation, any equity securities convertible into or
exchangeable or exercisable for or that represent the right to receive, or any warrants
or other rights to purchase, any Shares); or
(c) enter into any transaction with the same economic effect as any transaction
described in (a) or (b) above; or
(d) offer to or agree to do any of the foregoing specified in (a), (b) or (c) above or
announce any intention to do so,
in each case, whether any of the foregoing transactions is to be settled by delivery of share
capital or such other securities, in cash or otherwise (whether or not the issue of such share
capital or other securities will be completed within the First Six Month Period). The Company
further agrees that, in the event the Company is allowed to enter into any of the transactions
described in (a), (b) or (c) above or offers to or agrees to or announces any intention to effect
any such transaction during the period of six months commencing on the date on which the
First Six Month Period expires (the “ Second Six Month Period ”), it will take all reasonable
steps to ensure that such an issue or disposal will not, and no other act of the Company will,
create a disorderly or false market for any Shares or other securities of the Company.
Indemnity
Our Company has agreed to indemnify each of the Joint Sponsors, the Sponsor-Overall
Coordinators, the Overall Coordinators, the Joint Global Coordinators, the Joint Bookrunners,
the Joint Lead Managers, the Capital Market Intermediaries and the Hong Kong Underwriters
for certain losses which they may suffer, including any breach by them, respectively, of the
Hong Kong Underwriting Agreement or certain provisions thereof.
Underwriting Commission and Expenses
An aggregate of the fees of up to 1.5% of gross proceeds to be raised from the
subscription tranche and the placing tranche (including proceeds from any H Shares issued
pursuant to the Over-allotment Option) of the Global Offering is payable by the Company to
all syndicate members participating in the Global Offering, among which the syndicate
members (i) will receive an underwriting commission which is equal to 0.8% of the aggregate
gross proceeds to be raised from the Global Offering (including proceeds from any H Shares
issued pursuant to the Over-allotment Option) (the “ Underwriting Commission ”), and (ii)
may receive a discretionary incentive fee of up to 0.7% of the aggregate gross proceeds to be
raised from the Global Offering (including proceeds from any H shares issued pursuant to the
Over-allotment Option) (the “ Incentive Fee ”).
UNDERWRITING
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The ratio of the fixed fee and discretionary fee (as classified under and for the purpose
of Rule 3A.34 of the Listing Rules) payable by the Company to all syndicate members (both
before and after the exercise of the Over-allotment Option, if any) is expected to be
approximately 53.33%:46.67%, assuming the Incentive Fee will be paid in full.
For unsubscribed Hong Kong Offer Shares reallocated to the International Offering, we
will pay an underwriting commission at the rate applicable to the International Offering and
such commission will be paid to the relevant International Underwriters and not the Hong Kong
Underwriters.
The aggregate commissions and fees, together with the listing fees, SFC transaction levy,
the Stock Exchange trading fee, AFRC transaction levy, legal and other professional fees,
printing and other expenses payable by us relating to the Global Offering are estimated to
amount to approximately RMB201.5 million (approximately HK$224.4 million) in total
(assuming an Offer Price of HK$39.00 per Offer Share (being the maximum Offer Price) and
the full payment of the discretionary incentive fee and assuming the Over-allotment Option is
not exercised).
Hong Kong Underwriters’ Interests in our Company
Save for its obligations under the Hong Kong Underwriting Agreement or as otherwise
disclosed in this prospectus, none of the Hong Kong Underwriters is interested legally or
beneficially in any shares of the Company or has any right or option (whether legally
enforceable or not) to subscribe for or purchase or nominate persons to subscribe for or
purchase securities of the Company in the Global Offering.
Following completion of the Global Offering, the Hong Kong Underwriters and their
affiliated companies may hold a certain portion of the H Shares as a result of fulfilling their
obligations under the Hong Kong Underwriting Agreement.
International Offering
In connection with the International Offering, we expect to enter into the International
Underwriting Agreement with, among others, the International Underwriters. Under the
International Underwriting Agreement, the International Underwriters would, subject to certain
conditions, severally but not jointly agree to purchase the International Offer Shares or procure
purchasers for the International Offer Shares initially being offered pursuant to the
International Offering.
Under the International Underwriting Agreement, we intend to grant to the International
Underwriters the Over-allotment Option, exercisable in whole or in part at one or more times,
at the sole and absolute discretion of the Overall Coordinators on behalf of the International
Underwriters from the date of the International Underwriting Agreement until 30 days from the
last day for the lodging of applications under the Hong Kong Public Offering to require us to
UNDERWRITING
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allot and issue up to an aggregate of 41,092,700 additional H Shares, representing
approximately 15% of the Offer Shares initially available under the Global Offering, to cover
over-allocations in the International Offering, if any.
The International Underwriting Agreement is conditional on and subject to the Hong
Kong Underwriting Agreement having been executed, becoming unconditional and not having
been terminated. It is expected that undertakings similar to those given to the Hong Kong
Underwriters will be given by our Company to the International Underwriters under the
International Underwriting Agreement.
ACTIVITIES BY SYNDICATE MEMBERS
We describe below a variety of activities that underwriters of the Hong Kong Public
Offering and the International Offering, together referred to as “ Syndicate Members ,” may
each individually undertake, and which do not form part of the underwriting or the stabilizing
process. When engaging in any of these activities, it should be noted that the Syndicate
Members are subject to restrictions, including the following:
(a) under the agreement among the Syndicate Members, all of them (other than the
Stabilizing Manager or any person acting for it) must not, in connection with the
distribution of the Offer Shares, effect any transactions (including issuing or
entering into any option or other derivative transactions relating to the Offer
Shares), whether in the open market or otherwise, with a view to stabilizing or
maintaining the market price of any of the Offer Shares at levels other than those
which might otherwise prevail in the open market; and
(b) all of them must comply with all applicable laws, including the market misconduct
provisions of the SFO, including the provisions prohibiting insider dealing, false
trading, price rigging and stock market manipulation.
The Syndicate Members and their affiliates are diversified financial institutions with
relationships in countries around the world. These entities engage in a wide range of
commercial and investment banking, brokerage, funds management, trading, hedging,
investing and other activities for their own account and for the account of others. In relation
to the H Shares, those activities could include acting as agent for buyers and sellers of the H
Shares, entering into transactions with those buyers and sellers in a principal capacity,
proprietary trading in the H Shares and entering into over-the-counter or listed derivative
transactions or listed and unlisted securities transactions (including issuing securities such as
derivative warrants listed on a stock exchange) which have the H Shares as their or part of their
underlying assets. Those activities may require hedging activity by those entities involving,
directly or indirectly, buying and selling the H Shares.
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All such activities could occur in Hong Kong and elsewhere in the world and may result
in the Syndicate Members and their affiliates holding long and/or short positions in the H
Shares, in baskets of securities or indices including the H Shares, in units of funds that may
purchase the H Shares, or in derivatives related to any of the foregoing.
In relation to issues by Syndicate Members or their affiliates of any listed securities
having the H Shares as their or part of their underlying assets, whether on the Stock Exchange
or on any other stock exchange, the rules of the relevant exchange may require the issuer of
those securities (or one of its affiliates or agents) to act as a market maker or liquidity provider
in the security, and this will also result in hedging activity in the H Shares in most cases.
All of these activities may occur both during and after the end of the stabilizing period
described under the section headed “Structure of the Global Offering — Stabilization Action”
in this prospectus. These activities may affect the market price or value of the H Shares, the
liquidity or trading volume in the H Shares and the volatility of their share price, and the extent
to which this occurs from day to day cannot be estimated.
JOINT SPONSORS’ INDEPENDENCE
Each of the Joint Sponsors satisfies the independence criteria applicable to sponsors as set
out in Rule 3A.07 of the Listing Rules.
UNDERWRITING
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THE GLOBAL OFFERING
This prospectus is published in connection with the Hong Kong Public Offering as part
of the Global Offering. The Global Offering comprises:
(a) the Hong Kong Public Offering of initially 27,395,200 Offer Shares (subject to
reallocation) in Hong Kong as described in the paragraph headed “— The Hong
Kong Public Offering” in this section; and
(b) the International Offering of an aggregate of 246,556,200 Offer Shares (subject to
reallocation and the Over-allotment Option) (a) in the United States to QIBs in
reliance on Rule 144A or another available exemption from the registration
requirements of the U.S. Securities Act and (b) outside the United States in offshore
transactions in reliance on Regulation S.
Investors may apply for Hong Kong Offer Shares under the Hong Kong Public Offering
or apply for or indicate an interest, if qualified to do so, for the International Offer Shares
under the International Offering, but may not do both.
The number of Hong Kong Offer Shares and International Offer Shares to be offered
under the Hong Kong Public Offering and the International Offering respectively may be
subject to reallocation as described in the paragraph headed “— Pricing and Allocation” in this
section.
References in this prospectus to applications, application monies or the procedure for
application relate solely to the Hong Kong Public Offering.
THE HONG KONG PUBLIC OFFERING
Number of Hong Kong Offer Shares initially offered
We are initially offering 27,395,200 Hong Kong Offer Shares, representing approximately
10.0% of the total number of Offer Shares initially available under the Global Offering, at the
Offer Price for subscription by the public in Hong Kong. Subject to the reallocation of Shares
between (i) the International Offering, and (ii) the Hong Kong Public Offering, the Hong Kong
Offer Shares will represent approximately 0.48% of our Company’s enlarged issued share
capital immediately after completion of the Global Offering, assuming that the Over-allotment
Option is not exercised.
The Hong Kong Public Offering is open to members of the public in Hong Kong as well
as to institutional and professional investors. Professional investors generally include brokers,
dealers and companies (including fund managers) whose ordinary business involves dealing in
shares and other securities, and corporate entities which regularly invest in shares and other
securities.
Completion of the Hong Kong Public Offering is subject to the conditions as set out in
the paragraph headed “— Conditions of the Global Offering” in this section.
STRUCTURE OF THE GLOBAL OFFERING
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Allocation
Allocation of the Hong Kong Offer Shares to investors under the Hong Kong Public
Offering will be based solely on the level of valid applications received under the Hong Kong
Public Offering. The basis of allocation may vary, depending on the number of Hong Kong
Offer Shares validly applied for by applicants. Such allocation could, where appropriate,
consist of balloting, which would mean that some applicants may receive a higher allocation
than others who have applied for the same number of Hong Kong Offer Shares, and those
applicants who are not successful in the ballot may not receive any Hong Kong Offer Shares.
The total number of Hong Kong Offer Shares available under the Hong Kong Public
Offering (after taking account of any reallocation referred to below) will be divided into two
pools (with any odd board lots being allocated to pool A) for allocation purposes.
(a) Pool A : The Hong Kong Offer Shares in Pool A will be allocated on an equitable
basis to valid applicants who have applied for Hong Kong Offer Shares with an
aggregate subscription price of HK$5 million (excluding the brokerage, SFC
transaction levy, the Stock Exchange trading fee and the AFRC transaction levy
payable) or less.
(b) Pool B : The Hong Kong Offer Shares in Pool B will be allocated on an equitable
basis to valid applicants who have applied for Hong Kong Offer Shares with an
aggregate subscription price of more than HK$5 million (excluding the brokerage,
SFC transaction levy, the Stock Exchange trading fee and the AFRC transaction levy
payable) and up to the total value of pool B.
For the purpose of this sub-section only, the “subscription price” for Hong Kong Offer
Shares means the price payable on application therefore (without regard to the Offer Price as
finally determined).
Applicants should be aware that applications in Pool A and applications in Pool B may
receive different allocation ratios. If Hong Kong Offer Shares in one (but not both) of the two
pools are undersubscribed, the surplus Hong Kong Offer Shares will be transferred to the other
pool to satisfy demand in that other pool and be allocated accordingly.
Applicants can only receive an allocation of Hong Kong Offer Shares from either Pool A
or Pool B, but not from both pools. Multiple or suspected multiple applications and any
application for more than 13,697,600 Hong Kong Offer Shares (being 50% of the 27,395,200
Offer Shares initially available under the Hong Kong Public Offering) will be rejected.
STRUCTURE OF THE GLOBAL OFFERING
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Reallocation
The Offer Shares to be offered in the Hong Kong Public Offering and the International
Offering may, in certain circumstances, be reallocated as between these offerings at the
discretion of the Overall Coordinators. Subject to the foregoing paragraph, the Overall
Coordinators may in their discretion reallocate Shares from the International Offering to the
Hong Kong Public Offering to satisfy valid applications under the Hong Kong Public Offering.
In addition, if the Hong Kong Public Offering is not fully subscribed, the Overall Coordinators
will have the discretion (but shall not be under any obligation) to reallocate to the International
Offering all or any unsubscribed Hong Kong Offer Shares in such amounts as they deem
appropriate.
In each case, the additional Offer Shares reallocated to the Hong Kong Public Offering
will be allocated between Pool A and Pool B and the number of Offer Shares allocated to the
International Offering will be correspondingly reduced in such manner as the Joint Global
Coordinators and the Overall Coordinators deem appropriate. In the event of reallocation of
Offer Shares between the International Offering and the Hong Kong Public Offering in the
circumstances where (a) the International Offer Shares are fully subscribed or oversubscribed
and the Hong Kong Offer Shares are fully subscribed or oversubscribed irrespective of the
number of times, or (b) the International Offer Shares are undersubscribed and the Hong Kong
Offer Shares are fully subscribed or oversubscribed irrespective of the number of times, then
up to 13,697,500 Offer Shares may be reallocated from the International Offering to the Hong
Kong Public Offering, so that the total number of Offer Shares available for subscription under
the Hong Kong Public Offering will increase up to 41,092,700 Offer Shares, representing
approximately 15% of the total number of Offer Shares initially available under the Global
Offering (before exercise of the Over-allotment Option) in accordance with Chapter 4.14 of the
Guide for New Listing Applicants issued by the Stock Exchange. In the circumstance where the
International Offer Shares are fully subscribed or oversubscribed and the Hong Kong Offer
Shares are undersubscribed, there will be no reallocation from the International Offering to the
Hong Kong Public Offering, and no over-allocation of H Shares to the Hong Kong Public
Offering. Where both the International Offer Shares and the Hong Kong Offer Shares are
undersubscribed, the Global Offering will not proceed and will lapse, unless the shortfall is
taken up by the Underwriters.
Given the initial allocation of the Offer Shares to the Hong Kong Public Offering and the
International Offering follows Mechanism B set out under paragraph 2 of Chapter 4.14 of the
Guide and the provision of Paragraph 4.2(b) of Practice Note 18 of the Listing Rules, no
mandatory clawback or reallocation mechanism is required to increase the number of Offer
Shares under the Hong Kong Public Offering to a certain percentage of the total number of
Offer Shares offered under the Global Offering.
STRUCTURE OF THE GLOBAL OFFERING
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Applications
Each applicant under the Hong Kong Public Offering will also be required to give an
undertaking and confirmation in the application submitted by him that he and any person(s) for
whose benefit he is making the application has not applied for or taken up, or indicated an
interest in, and will not apply for or take up, or indicate an interest in, any International Offer
Shares under the International Offering, and such applicant’s application under the
International Offering is liable to be rejected if the said undertaking and/or confirmation is
breached and/or untrue (as the case may be).
Applicants under the Hong Kong Public Offering may be required to pay, on application
(subject to application channels), the maximum Offer Price of HK$39.00 per Offer Share in
addition to the brokerage, SFC transaction levy, the Stock Exchange trading fee and the AFRC
transaction levy payable on each Offer Share, amounting to a total of HK$3,939.34 for one
board lot of 100 Offer Shares. If the Offer Price, as finally determined in the manner described
in the sub-section headed “Pricing and Allocation” in this section below, is less than the
maximum Offer Price of HK$39.00 per Offer Share, appropriate refund payments (including
the brokerage, the SFC transaction levy, AFRC transaction levy and the Stock Exchange
trading fee attributable to the surplus application monies) will be made to successful applicants
(subject to application channels), without interest. Further details are set out below in the
section headed “How to Apply for Hong Kong Offer Shares” in this prospectus.
References in this prospectus to applications, application monies or the procedure for
application relate solely to the Hong Kong Public Offering.
THE INTERNATIONAL OFFERING
Number of Offer Shares initially offered
Subject to the reallocation as described above, the number of Offer Shares to be initially
offered under the International Offering will be 246,556,200 Offer Shares (subject to
reallocation and the Over-allotment Option), representing approximately 90% of the total
number of Offer Shares initially available under the Global Offering.
Subject to the reallocation of the Offer Shares between the International Offering and the
Hong Kong Public Offering, the number of Offer Shares initially offered under the
International Offering will represent approximately 4.30% of our Company’s enlarged issued
share capital immediately after completion of the Global Offering, assuming that the
Over-allotment Option is not exercised.
STRUCTURE OF THE GLOBAL OFFERING
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Allocation
Pursuant to the International Offering, the International Underwriters will conditionally
place the International Offer Shares, in the United States to QIBs in reliance on Rule 144A or
another available exemption from the registration requirements of the U.S. Securities Act, as
well as to institutional and professional investors and other investors and expected to have a
sizeable demand for the H Shares in Hong Kong and other jurisdictions outside the United
States in offshore transactions in reliance on Regulation S. The International Offering is
subject to the Hong Kong Public Offering being unconditional.
Allocation of Offer Shares pursuant to the International Offering will be effected in
accordance with the “book-building” process described in the paragraph headed “— Pricing
and Allocation” in this section and based on a number of factors, including the level and timing
of demand, total size of the relevant investor’s invested assets or equity assets in the relevant
sector and whether or not it is expected that the relevant investor is likely to buy further, and/or
hold or sell, the Offer Shares, after the Listing. Such allocation is intended to result in a
distribution of the Offer Shares on a basis which would lead to the establishment of a solid
Shareholder base to the benefit of our Company and our Shareholders as a whole.
The Overall Coordinators (for themselves and on behalf of the Underwriters) and the Joint
Sponsors may require any investor who has been offered Offer Shares under the International
Offering and who has made an application under the Hong Kong Public Offering, to provide
sufficient information to the Overall Coordinators and the Joint Sponsors so as to allow them
to identify the relevant applications under the Hong Kong Public Offering and to ensure that
they are excluded from any application of Offer Shares under the International Offering.
Reallocation
The total number of Offer Shares to be issued or sold pursuant to the International
Offering may change as a result of the reallocation arrangement described in the paragraph
headed “— The Hong Kong Public Offering — Reallocation” in this section, the exercise of
the Over-allotment Option in whole or in part, and any reallocation of unsubscribed Offer
Shares originally included in the Hong Kong Public Offering and/or any Offer Shares from the
International Offering to the Hong Kong Public Offering at the discretion of the Overall
Coordinators.
Over-allotment Option
In connection with the Global Offering, it is expected that our Company will grant the
Over-allotment Option to the International Underwriters, which will be exercisable by the
Overall Coordinators (for themselves and on behalf of the International Underwriters).
STRUCTURE OF THE GLOBAL OFFERING
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Pursuant to the Over-allotment Option, the International Underwriters have the right,
exercisable by the Overall Coordinators (on behalf of the International Underwriters) at any
time from the Listing Date to the 30th day after the last day for lodging applications under the
Hong Kong Public Offering, to require our Company to issue and allot up to an aggregate of
41,092,700 additional H Shares, representing approximately 15% of the Offer Shares initially
available under the Global Offering, at the Offer Price under the International Offering, to
cover over-allocations in the International Offering, if any.
If the Over-allotment Option is exercised in full, the additional International Offer Shares
to be issued pursuant thereto will represent approximately 0.71% of our Company’s enlarged
issued share capital immediately following the completion of the Global Offering and the
exercise of the Over-allotment Option. In the event that the Over-allotment Option is exercised,
an announcement will be made.
STABILIZATION ACTION
Stabilization is a practice used by underwriters in some markets to facilitate the
distribution of securities. To stabilize, the underwriters may bid for, or purchase, the securities
in the secondary market, during a specified period of time, to curb and, if possible, prevent any
decline in the market price of the securities below the Offer Price. It may be effected in
jurisdictions where it is permissible to do so and subject to all applicable laws and regulatory
requirements. In Hong Kong and certain other jurisdictions, activity aimed at reducing the
market price is prohibited. The price at which stabilization is effected is not permitted to
exceed the Offer Price.
In connection with the Global Offering, the Stabilizing Manager, its affiliates or any
person acting for it, on behalf of the Underwriters, may to the extent permitted by applicable
laws of Hong Kong or elsewhere, over-allocate or effect short sales or any other stabilizing
transactions with a view to stabilizing or maintaining the market price of the Offer Shares at
a level higher than that which might otherwise prevail in the open market for a limited period
after the last day of the lodging of applications under the Hong Kong Public Offering. Short
sales involve the sale by the Stabilizing Manager of a greater number of H Shares than the
Underwriters are required to purchase in the Global Offering. “Covered” short sales are sales
made in an amount not greater than the Over-allotment Option. The Stabilizing Manager may
close out the covered short position by either exercising the Over-allotment Option to purchase
additional Offer Shares or purchasing H Shares in the open market. In determining the source
of the Offer Shares to close out the covered short position, the Stabilizing Manager will
consider, among other things, the price of Offer Shares in the open market as compared to the
price at which they may purchase additional Offer Shares pursuant to the Over-allotment
Option. Stabilizing transactions consist of certain bids or purchases made for the purpose of
preventing or curbing a decline in the market price of the Offer Shares while the Global
Offering is in progress. Any market purchases of the H Shares will be effected on any stock
exchange, including the Stock Exchange, any over-the-counter market or otherwise, provided
that they are made in compliance with all applicable laws, rules and regulatory requirements.
STRUCTURE OF THE GLOBAL OFFERING
– 439 –


--- page 451 ---
However, there is no obligation on the Stabilizing Manager or any person acting for it to
conduct any such stabilizing action. Such stabilizing activity, if commenced, will be done at
the absolute discretion of the Stabilizing Manager and may be discontinued at any time.
Any such stabilizing activity is required to be brought to an end within 30 days of the last
day for the lodging of applications under the Hong Kong Public Offering. The number of Offer
Shares that may be over-allocated will not exceed the number of Offer Shares that may be sold
under the Over-allotment Option, namely, an aggregate of 41,092,700 additional H Shares,
representing approximately 15% of the Offer Shares initially available under the Global
Offering, and cover such over-allocations by exercising the Over-allotment Option or by
making purchases in the secondary market at prices that do not exceed the Offer Price or a
combination of these means.
In Hong Kong, stabilizing activities must be carried out in accordance with the Securities
and Futures (Price Stabilizing) Rules. Stabilizing actions permitted pursuant to the Securities
and Futures (Price Stabilizing) Rules (Chapter 571W of the Laws of Hong Kong) under the
SFO include:
(a) over-allocation for the purpose of preventing or minimizing any reduction in the
market price of our H Shares;
(b) selling or agreeing to sell the H Shares so as to establish a short position in them for
the purpose of preventing or minimizing any reduction in the market price of the H
Shares;
(c) purchasing or subscribing for, or agreeing to purchase or subscribe for, our H Shares
pursuant to the Over-allotment Option in order to close out any position established
under (a) or (b) above;
(d) purchasing, or agreeing to purchase, any of the H Shares for the sole purpose of
preventing or minimizing any reduction in the market price of the H Shares;
(e) selling or agreeing to sell any of our H Shares in order to liquidate any position held
as a result of those purchases; and
(f) offering or attempting to do anything as described in (b), (c), (d) or (e) above.
Stabilizing actions by the Stabilizing Manager, or any person acting for it, will be entered
into in accordance with the laws, rules and regulations in place in Hong Kong on stabilization.
STRUCTURE OF THE GLOBAL OFFERING
– 440 –


--- page 452 ---
Prospective applicants for and investors in the Offer Shares should note that:
(a) the Stabilizing Manager or any person acting for it may, in connection with the
stabilizing action, maintain a long position in the H Shares;
(b) there is no certainty as to the extent to which and the time or period for which the
Stabilizing Manager or any person acting for it will maintain such a long position;
(c) liquidation of any such long position by the Stabilizing Manager or any person
acting for it and selling in the open market, may have an adverse impact on the
market price of our H Shares;
(d) no stabilizing action can be taken to support the price of our H Shares for longer
than the stabilization period, which will begin on the Listing Date, and is expected
to expire on the 30th day after the last date for lodging applications under the Hong
Kong Public Offering. After this date, when no further stabilizing action may be
taken, demand for our Shares, and therefore the price of our H Shares, could fall;
(e) the price of our H Shares cannot be assured to stay at or above the Offer Price by
the taking of any stabilizing action; and
(f) stabilizing bids or transactions effected in the course of the stabilizing action may
be made at any price at or below the Offer Price and can, therefore, be done at a
price below the price paid by applicants for, or investors in, the Offer Shares.
As a result of effecting transactions to stabilize or maintain the market price of the H
Shares, the Stabilizing Manager, or any person acting for it, may maintain a long position in
the H Shares. The size of the long position, and the period for which the Stabilizing Manager,
or any person acting for it, will maintain the long position is at the discretion of the Stabilizing
Manager and is uncertain. In the event that the Stabilizing Manager liquidates this long
position by making sales in the open market, this may lead to a decline in the market price of
the H Shares.
Stabilizing action by the Stabilizing Manager, or any person acting for it, is not permitted
to support the price of the H Shares for longer than the stabilizing period, which begins on the
day on which trading of the H Shares commences on the Stock Exchange and ends on the 30th
day after the last day for the lodging of applications under the Hong Kong Public Offering. The
stabilizing period is expected to end on Thursday, March 5, 2026. As a result, demand for the
H Shares and their market price, may fall after the end of the stabilizing period. These activities
by the Stabilizing Manager may stabilize, maintain or otherwise affect the market price of the
H Shares. In order to effect stabilization actions, the Stabilizing Manager will arrange cover
of up to an aggregate of 41,092,700 additional H Shares, representing approximately 15% of
the Offer Shares initially available under the Global Offering, through delayed delivery
arrangements with cornerstone investors. The delayed delivery arrangements (if specifically
agreed by an investor) relate only to the delay in the delivery of the Offer Shares to such
STRUCTURE OF THE GLOBAL OFFERING
– 441 –


--- page 453 ---
investor and the Offer Price for the Offer Shares allocated to such investor will be fully paid
before the Listing Date. A public announcement in compliance with the Securities and Futures
(Price Stabilizing) Rules will be made within seven days of the expiration of the stabilizing
period.
PRICING AND ALLOCATION
Pricing for the Offer Shares for the purpose of the various offerings under the Global
Offering will be fixed on the Price Determination Date, which is expected to be on or about
Wednesday, February 4, 2026, by agreement between the Overall Coordinators and our
Company, and the number of Offer Shares to be allocated under the various offerings will be
determined shortly thereafter.
We will determine the Offer Price by reference to, among other factors, the closing price
of the A Shares on the Shenzhen Stock Exchange on the last trading day on or before the Price
Determination Date (which is accessible to the Shareholders and potential investors at
https://www.szse.cn/English/siteMarketData/siteMarketDatas/lookup/index.html ), and the
Offer Price will not be more than HK$39.00. The historical closing prices of our A Shares and
trading volume on the Shenzhen Stock Exchange are set out below.
Period High Low ADTV (1)
(RMB) (RMB) (A Shares)
Y ear ended December 31, 2022 /H1118/H1118/H1118/H1118/H1118/H1118/H111865.99 45.59 34,261,125
Y ear ended December 31, 2023 /H1118/H1118/H1118/H1118/H1118/H1118/H111851.66 31.17 23,013,142
Y ear ended December 31, 2024 /H1118/H1118/H1118/H1118/H1118/H1118/H111850.78 34.24 27,801,251
Y ear ended December 31, 2025 /H1118/H1118/H1118/H1118/H1118/H1118/H111859.68 35.72 38,079,874
Y ear of 2026 (up to the Latest
Practicable Date) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111851.85 46.12 39,574,825
Note:
(1) Average daily trading volume (“ ADTV ”) represents daily average number of our A Shares traded over the
relevant period.
The International Underwriters will be soliciting from prospective investors’ indications
of interest in acquiring Offer Shares in the International Offering. Prospective professional and
institutional investors will be required to specify the number of Offer Shares under the
International Offering they would be prepared to acquire either at different prices or at a
particular price. This process, known as “book-building,” is expected to continue up to, and to
cease on or around, the last day for lodging applications under the Hong Kong Public Offering.
The Offer Price per Offer Share under the Hong Kong Public Offering will be identical
to the Offer Price per Offer Share under the International Offering based on the Hong Kong
dollar price per Offer Share under the International Offering.
STRUCTURE OF THE GLOBAL OFFERING
– 442 –


--- page 454 ---
The maximum Offer Price will be HK$39.00 per Offer Share, unless otherwise announced
by the Company no later than the morning of the last day for lodging applications under the
Hong Kong Public Offering, as further explained below.
Prospective investors should be aware that the Offer Price to be determined on the Price
Determination Date may be, but is not expected to be, lower than the minimum Offer Price
stated in this prospectus.
The Overall Coordinators, for themselves and on behalf of the Underwriters, and the Joint
Sponsors, may, where considered appropriate, based on the level of interest expressed by
prospective professional and institutional investors during the book-building process, and with
the consent of our Company, reduce the number of Offer Shares and/or the Offer Price as stated
in this prospectus at any time on or prior to the morning of the last day for lodging applications
under the Hong Kong Public Offering. In such case, we will, as soon as practicable following
the decision to make such reduction, and in any event not later than the morning of the day
which is the last day for lodging applications under the Hong Kong Public Offering, cause to
be published on the website of the Stock Exchange at www.hkexnews.hk and the Company at
www.muyuanfoods.com , notices of the reduction of the Offer Shares and/or the Offer Price,
and the cancellation of the Global Offering and relaunch of the offer at the revised number of
Offer Shares and/or the revised Offer Price. The Company will also, as soon as practicable
following the decision to make such change, issue a supplemental prospectus or a new
prospectus updating investors of the change in the number of Offer Shares being offered
under the Global Offering and/or the Offer Price, and giving investors at least three business
days to consider the new information. The supplemental or new prospectus should include at
least the following: updated (i) Offer Price and market capitalization; (ii) listing timetable and
underwriting obligations; (iii) price/earning multiple, unaudited pro forma and adjusted net
tangible assets; and (iv) use of proceeds and working capital adequacy confirmation based on
revised proceeds. In the absence of any such supplemental or new prospectus so published, the
number of Offer Shares and/or the Offer Price will not be reduced.
If there is any change to the offer size due to change in the number of Offer Shares
initially offered in the Global Offering (other than pursuant to the exercise of the Over-
allotment Option and/or reallocation mechanism as disclosed in this prospectus), or change to
the Offer Price, or if the Company becomes aware that there has been a significant change
affecting any matter contained in this prospectus or a significant new matter has arisen, the
inclusion of information in respect of which would have been required to be in this prospectus
if it had arisen before this prospectus was issued, after the issue of this prospectus and before
the commencement of dealings in our H Shares as prescribed under Rule 11.13 of the Listing
Rules, we are required to cancel the Global Offering and relaunch the offer and issue a
supplemental prospectus or a new prospectus.
In the event of a reduction in the number of Offer Shares, the Overall Coordinators and
the Joint Sponsors may, at their discretion, reallocate the number of Offer Shares to be offered
in the Hong Kong Public Offering and the International Offering.
STRUCTURE OF THE GLOBAL OFFERING
– 443 –


--- page 455 ---
The final Offer Price, the level of indications of interest in the Global Offering, the results
of allocations and the basis of allotment of the Hong Kong Offer Shares are expected to be
announced on Thursday, February 5, 2026 on the website of the Stock Exchange at
www.hkexnews.hk and on the website of our Company at www.muyuanfoods.com .
UNDERWRITING
The Hong Kong Public Offering is fully underwritten by the Hong Kong Underwriters
under the terms of the Hong Kong Underwriting Agreement.
We expect to enter into the International Underwriting Agreement relating to the
International Offering on or around the Price Determination Date.
These underwriting arrangements, and the Hong Kong Underwriting Agreement and the
International Underwriting Agreement, are summarized in the section headed “Underwriting”
in this prospectus.
CONDITIONS OF THE GLOBAL OFFERING
Acceptance of all applications for Offer Shares pursuant to the Global Offering will be
conditional on:
(a) the Listing Committee granting approval for the listing of, and permission to deal in,
the H Shares in issue and to be issued pursuant to the Global Offering (including the
additional Offer Shares which may be issued pursuant to the exercise of the
Over-allotment Option), and such listing and permission not subsequently having
been revoked prior to the commencement of dealings in the H Shares on the Stock
Exchange;
(b) the Offer Price having been agreed between the Overall Coordinators and our
Company and not subsequently having been varied or adjusted by the Company and
the Overall Coordinators;
(c) the execution and delivery of the International Underwriting Agreement; and
(d) the obligations of the Underwriters under the respective Underwriting Agreements
becoming and remaining unconditional (including, if relevant, as a result of the
waiver of any conditions by the Overall Coordinators, for themselves and on behalf
of the Underwriters) and not having been terminated in accordance with the terms
of the respective agreements in each case on or before the dates and times as
specified in the Underwriting Agreements (unless and to the extent such conditions
are validly waived on or before such dates and times) and in any event no later than
the date which is the 30th day after the date of this prospectus).
STRUCTURE OF THE GLOBAL OFFERING
– 444 –


--- page 456 ---
The completion of each of the Hong Kong Public Offering and the International Offering
is conditional upon, among other things, the other offering becoming unconditional and not
having been terminated in accordance with their respective terms.
If, for any reason, the Offer Price is not agreed between the Overall Coordinators and our
Company on or before 12:00 noon on Wednesday, February 4, 2026, the Global Offering will
not proceed and will lapse.
If the above conditions are not fulfilled or waived prior to the times and dates specified,
the Global Offering will lapse and the Stock Exchange will be notified immediately. Notice of
the lapse of the Hong Kong Public Offering will be published by our Company and on the
websites of Stock Exchange at www.hkexnews.hk and our Company at
www.muyuanfoods.com on the next Business Day following such lapse. In such eventuality,
all application monies will be returned, without interest, on the terms set out in the section
headed “How to Apply for Hong Kong Offer Shares — D. Despatch/Collection of H Share
Certificates and Refund of Application Monies.” In the meantime, all application monies will
be held in separate bank account(s) with the receiving bankers or other bank(s) in Hong Kong
licensed under the Banking Ordinance (Chapter 155 of the Laws of Hong Kong) (as amended).
The consummation of each of the Hong Kong Public Offering and the International
Offering is conditional upon, amongst other things, the other becoming unconditional and not
having been terminated in accordance with its terms.
H Share certificates for the Offer Shares will only become valid evidence of title at 8:00
a.m. on the Listing Date provided that (i) the Global Offering has become unconditional in all
respects, and (ii) the right of termination as described in the section headed “Underwriting —
Underwriting Arrangements and Expenses — Hong Kong Public Offering — Grounds for
Termination” has not been exercised. Investors who trade the H Shares prior to the receipt of
H Share certificates or prior to the H Share certificates bearing valid evidence of title do so
entirely at their own risk.
Application for Listing on the Stock Exchange
We have applied to the Listing Committee for the granting of the listing of, and
permission to deal in, the H Shares in issue and to be issued pursuant to the Global Offering
(including any H Shares which may be issued pursuant to the exercise of the Over-allotment
Option) on the Main Board of the Stock Exchange and the Conversion of Unlisted Shares into
H Shares.
STRUCTURE OF THE GLOBAL OFFERING
– 445 –


--- page 457 ---
H SHARES WILL BE ELIGIBLE FOR CCASS
All necessary arrangements have been made enabling the H Shares to be admitted into
CCASS, established and operated by HKSCC.
If the Stock Exchange grants the listing of, and permission to deal in, the H Shares and
our Company complies with the stock admission requirements of HKSCC, the H Shares will
be accepted as eligible securities by HKSCC for deposit, clearance and settlement in CCASS
with effect from the date of commencement of dealings in the H Shares on the Stock Exchange
or any other date HKSCC chooses. Settlement of transactions between participants of the Stock
Exchange is required to take place in CCASS on the second settlement day after any trading
day.
All activities under CCASS are subject to the General Rules of HKSCC and HKSCC
Operational Procedures in effect from time to time.
DEALING ARRANGEMENTS
Assuming that the Hong Kong Public Offering becomes unconditional at or before
8:00 a.m. in Hong Kong on Friday, February 6, 2026, it is expected that dealings in the H
Shares on the Stock Exchange will commence at 9:00 a.m. on Friday, February 6, 2026.
The H Shares will be traded in board lots of 100 H Shares each and the stock code of the
H Shares will be 2714.
STRUCTURE OF THE GLOBAL OFFERING
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--- page 458 ---
IMPORTANT NOTICE TO INVESTORS
OF HONG KONG OFFER SHARES
FULLY ELECTRONIC APPLICATION PROCESS
We have adopted a fully electronic application process for the Hong Kong
Public Offering and below are the procedures for application.
This prospectus is available at the website of the Stock Exchange at
www.hkexnews.hk under the “HKEXnews > New Listings > New Listing
Information” section, and our website at www.muyuanfoods.com.
The contents of this prospectus are identical to the prospectus as registered with the
Registrar of Companies in Hong Kong pursuant to Section 342C of the Companies
(Winding Up and Miscellaneous Provisions) Ordinance.
A. APPLICATION FOR HONG KONG OFFER SHARES
1. Who Can Apply
Y ou can apply for Hong Kong Offer Shares if you or the person(s) for whose benefit you
are applying for:
 are 18 years of age or older; and
 have a Hong Kong address (for the HK eIPO White Form service only).
Unless permitted by the Listing Rules or a waiver and/or consent has been granted by the
Stock Exchange to us, you cannot apply for any Hong Kong Offer Shares if you or the
person(s) for whose benefit you are applying for:
 are an existing Shareholder or his/her/its close associates; or
 are a Director or a Supervisor or any of his/her close associates.
HOW TO APPLY FOR HONG KONG OFFER SHARES
– 447 –


--- page 459 ---
2. Application Channels
The Hong Kong Public Offering period will begin at 9:00 a.m. on Thursday, January
29, 2026 and end at 12:00 noon on Tuesday, February 3, 2026 (Hong Kong time).
To apply for Hong Kong Offer Shares, you may use one of the following application
channels:
Application Channel Platform Target Investors Application Time
HK eIPO White
Form service /H1118
www.hkeipo.hk Investors who would
like to receive a
physical H Share
certificate. Hong
Kong Offer Shares
successfully
applied for will be
allotted and issued
in your own name.
From 9:00 a.m. on
Thursday,
January 29, 2026
to 11:30 a.m. on
Tuesday,
February 3,
2026, Hong
Kong time.
The latest time for
completing full
payment of
application
monies will be
12:00 noon on
Tuesday,
February 3,
2026, Hong
Kong time.
HKSCC EIPO
channel /H1118/H1118/H1118/H1118/H1118/H1118
Y our broker or custodian
who is a HKSCC
Participant will submit an
EIPO application on your
behalf through HKSCC’s
FINI system in
accordance with your
instruction
Investors who would
not like to receive
a physical H Share
certificate. Hong
Kong Offer Shares
successfully
applied for will be
allotted and issued
in the name of
HKSCC Nominees,
deposited directly
into CCASS and
credited to your
designated HKSCC
Participant’s stock
account.
Contact your
broker or
custodian for
the earliest and
latest time for
giving such
instructions, as
this may vary by
broker or
custodian .
HOW TO APPLY FOR HONG KONG OFFER SHARES
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--- page 460 ---
The HK eIPO White Form service and the HKSCC EIPO channel are facilities subject
to capacity limitations and potential service interruptions and you are advised not to wait until
the last day of the application period to apply for Hong Kong Offer Shares.
For those applying through the HK eIPO White Form service, once you complete
payment in respect of any application instructions given by you or for your benefit through the
HK eIPO White Form service to make an application for Hong Kong Offer Shares, an actual
application shall be deemed to have been made. If you are a person for whose benefit the
electronic application instructions are given, you shall be deemed to have declared that only
one set of electronic application instructions has been given for your benefit. If you are an
agent for another person, you shall be deemed to have declared that you have only given one
set of electronic application instructions for the benefit of the person for whom you are an
agent and that you are duly authorized to give those instructions as an agent.
For the avoidance of doubt, giving an application instruction under the HK eIPO White
Form service more than once and obtaining different payment reference numbers without
effecting full payment in respect of a particular reference number will not constitute an actual
application.
If you apply through the HK eIPO White Form service, you are deemed to have
authorized the HK eIPO White Form Service Provider to apply on the terms and conditions
in this prospectus, as supplemented and amended by the terms and conditions of the HK eIPO
White Form service.
By instructing your broker or custodian to apply for the Hong Kong Offer Shares on
your behalf through the HKSCC EIPO Channel, you (and, if you are joint applicants, each of
you jointly and severally) are deemed to have instructed and authorized HKSCC to cause
HKSCC Nominees (acting as nominee for the relevant HKSCC Participants) to apply for Hong
Kong Offer Shares on your behalf and to do on your behalf all the things stated in this
prospectus and any supplement to it.
For those applying through the HKSCC EIPO channel, an actual application will be
deemed to have been made for any application instructions given by you or for your benefit to
HKSCC (in which case an application will be made by HKSCC Nominees on your behalf)
provided such application instruction has not been withdrawn or otherwise invalidated before
the closing time of the Hong Kong Public Offering.
HKSCC Nominees will only be acting as a nominee for you and neither HKSCC nor
HKSCC Nominees shall be liable to you or any other person in respect of any actions taken by
HKSCC or HKSCC Nominees on your behalf to apply for Hong Kong Offer Shares or for any
breach of the terms and conditions of this prospectus.
HOW TO APPLY FOR HONG KONG OFFER SHARES
– 449 –


--- page 461 ---
3. Information Required to Apply
Y ou must provide the following information with your application:
For Individual Applicants For Corporate Applicants
 Full name(s) 2 as shown on your
identity document
 Full name(s) 2 as shown on your
identity document
 Identity document’s issuing country
or jurisdiction
 Identity document’s issuing country
or jurisdiction
 Identity document type, with order
of priority
 Identity document type, with order
of priority
i. HKID card; or
ii. National identification
document; or
iii. Passport; and
 Identity document number
i. LEI registration document; or
ii. Certificate of incorporation; or
iii. Business registration
certificate; or
iv. Other equivalent document; and
 Identity document number
Notes:
1. If you are applying through the HK eIPO White Form service, you are required to provide a valid
e-mail address, a contact telephone number and a Hong Kong address. Y ou are also required to declare
that the identity information provided by you follows the requirements as described in Note 2 below. In
particular, where you cannot provide a HKID number, you must confirm that you do not hold a HKID
card. The number of joint applicants may not exceed four. If you are a firm, the applicant must be in
the individual members’ names.
2. The applicant’s full name as shown on their identity document must be used and the surname, given
name, middle and other names (if any) must be input in the same order as shown on the identity
document. If an applicant’s identity document contains both an English and Chinese name, both English
and Chinese names must be used. Otherwise, either English or Chinese names will be accepted. The
order of priority of the applicant’s identity document type must be strictly followed and where an
individual applicant has a valid HKID card (including both Hong Kong Residents and Hong Kong
Permanent Residents), the HKID number must be used when making an application to subscribe for
shares in a public offer. Similarly for corporate applicants, a LEI number must be used if an entity has
a LEI certificate.
3. If the applicant is a trustee, the client identification data (“ CID”) of the trustee, as set out above, will
be required. If the applicant is an investment fund (i.e. a collective investment scheme, or CIS), the CID
of the asset management company or the individual fund, as appropriate, which has opened a trading
account with the broker will be required, as above.
HOW TO APPLY FOR HONG KONG OFFER SHARES
– 450 –


--- page 462 ---
4. The maximum number of joint account holders on FINI is capped at 4 in accordance with market
practice.
5. If you are applying as a nominee, you must provide: (i) the full name (as shown on the identity
document), the identity document’s issuing country or jurisdiction, the identity document type; and (ii),
the identity document number, for each of the beneficial owners or, in the case(s) of joint beneficial
owners, for each joint beneficial owner. If you do not include this information, the application will be
treated as being made for your benefit.
6. If you are applying as an unlisted company and (i) the principal business of that company is dealing in
securities; and (ii) you exercise statutory control over that company, then the application will be treated
as being for your benefit and you should provide the required information in your application as stated
above.
“Unlisted company” means a company with no equity securities listed on the Stock Exchange or any
other stock exchange.
“Statutory control” means you:
 control the composition of the board of directors of the company;
 control more than half of the voting power of the company; or
 hold more than half of the issued share capital of the company (not counting any part of it which
carries no right to participate beyond a specified amount in a distribution of either profits or
capital).
For those applying through the HKSCC EIPO channel, and making an application under
a power of attorney, we and the Overall Coordinators, as our agents, have discretion to consider
whether to accept it on any conditions we think fit, including evidence of the attorney’s
authority.
Failing to provide any required information may result in your application being rejected.
4. Permitted Number of Hong Kong Offer Shares for Application
Board lot size /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118: 100 H Shares
Permitted number of Hong
Kong Offer Shares for
application and amount
payable on
application/successful
allotment /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
: Hong Kong Offer Shares are available for
application in specified board lot sizes only.
Please refer to the amount payable associated
with each specified board lot size in the table
below.
The maximum Offer Price is HK$39.00 per
Share.
HOW TO APPLY FOR HONG KONG OFFER SHARES
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--- page 463 ---
If you are applying through the HKSCC EIPO
channel, your broker or custodian may require
you to pre-fund your application, in such
amount as determined by the broker or
custodian, based on the applicable laws and
regulations in Hong Kong. Y ou are responsible
for complying with any such pre-funding
requirement imposed by your broker or
custodian with respect to the Hong Kong Offer
Shares you applied for.
By instructing your broker or custodian to
apply for the Hong Kong Offer Shares on your
behalf through the HKSCC EIPO Channel, you
(and, if you are joint applicants, each of you
jointly and severally) are deemed to have
instructed and authorized HKSCC to cause
HKSCC Nominees (acting as nominee for the
relevant HKSCC Participants) to arrange
payment of the Offer Price, brokerage, SFC
transaction levy, the Stock Exchange trading fee
and the AFRC transaction levy by debiting the
relevant nominee bank account at the
Designated Bank for your broker or custodian .
If you are applying through the HK eIPO
White Form service, you may refer to the table
below for the amount payable for the number of
H Shares you have selected. Y ou must pay the
respective maximum amount payable on
application in full upon application for Hong
Kong Offer Shares.
HOW TO APPLY FOR HONG KONG OFFER SHARES
– 452 –


--- page 464 ---
No. of
Hong Kong
Offer Shares
applied for
Maximum
Amount
payable (2) on
application/
successful
allotment
No. of
Hong Kong
Offer Shares
applied for
Maximum
Amount
payable (2) on
application/
successful
allotment
No. of
Hong Kong
Offer Shares
applied for
Maximum
Amount
payable (2) on
application/
successful
allotment
No. of
Hong Kong
Offer Shares
applied for
Maximum
Amount
payable (2) on
application/
successful
allotment
HK$ HK$ HK$ HK$
100 3,939.34 3,500 137,876.60 70,000 2,757,532.06 3,000,000 118,179,945.00
200 7,878.66 4,000 157,573.25 80,000 3,151,465.20 4,000,000 157,573,260.00
300 11,818.00 4,500 177,269.92 90,000 3,545,398.36 5,000,000 196,966,575.00
400 15,757.32 5,000 196,966.58 100,000 3,939,331.50 6,000,000 236,359,890.00
500 19,696.66 6,000 236,359.89 200,000 7,878,663.00 7,000,000 275,753,205.00
600 23,635.99 7,000 275,753.20 300,000 11,817,994.50 8,000,000 315,146,520.00
700 27,575.32 8,000 315,146.52 400,000 15,757,326.00 9,000,000 354,539,835.00
800 31,514.65 9,000 354,539.84 500,000 19,696,657.50 10,000,000 393,933,150.00
900 35,453.98 10,000 393,933.16 600,000 23,635,989.00 13,697,600
(1) 539,593,871.54
1,000 39,393.31 20,000 787,866.30 700,000 27,575,320.50
1,500 59,089.98 30,000 1,181,799.46 800,000 31,514,652.00
2,000 78,786.64 40,000 1,575,732.60 900,000 35,453,983.50
2,500 98,483.29 50,000 1,969,665.76 1,000,000 39,393,315.00
3,000 118,179.95 60,000 2,363,598.90 2,000,000 78,786,630.00
(1) Maximum number of Hong Kong Offer Shares you may apply for and this is 50% of the Hong Kong Offer
Shares initially offered.
(2) The amount payable is inclusive of brokerage, SFC transaction levy, the Stock Exchange trading fee and AFRC
transaction levy. If your application is successful, brokerage will be paid to the Exchange Participants (as
defined in the Listing Rules) or to the HK eIPO White Form Service Provider (for applications made through
the application channel of the HK eIPO White Form service) while the SFC transaction levy, the Stock
Exchange trading fee and the AFRC transaction levy will be paid to the SFC, the Stock Exchange and the
AFRC, respectively.
5. Multiple Applications Prohibited
Y ou or your joint applicant(s) shall not make more than one application for your own
benefit, except where you are a nominee and provide the information of the underlying investor
in your application as required under the paragraph headed “— A. Applications for Hong
Kong Offer Shares — 3. Information Required to Apply” in this section. If you are suspected
of submitting or cause to submit more than one application, all of your applications will be
rejected.
Multiple applications made either through (i) the HK eIPO White Form service, (ii)
HKSCC EIPO channel, or (iii) both channels concurrently are prohibited and will be rejected.
If you have made an application through the HK eIPO White Form service or HKSCC EIPO
channel, you or the person(s) for whose benefit you have made the application shall not apply
further for any Offer Shares in the Global Offering.
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The H Share Registrar would record all applications into its system and identify suspected
multiple applications with identical names and identification document numbers according to
the Best Practice Note on Treatment of Multiple/Suspected Multiple Applications (“ Best
Practice Note ”) issued by the Federation of Share Registrars Limited.
Since applications are subject to personal information collection statements,
identification document numbers displayed are redacted.
6. Terms and Conditions of An Application
By applying for Hong Kong Offer Shares through the HK eIPO White Form service or
HKSCC EIPO channel, you (or as the case may be, HKSCC Nominees will do the following
things on your behalf):
(i) undertake to execute all relevant documents and instruct and authorize us and/or the
Overall Coordinators, as our agents, to execute any documents for you and to do on
your behalf all things necessary to register any Hong Kong Offer Shares allocated
to you in your name or in the name of HKSCC Nominees as required by the Articles
of Association, and (if you are applying through the HKSCC EIPO channel) to
deposit the allotted Hong Kong Offer Shares directly into CCASS for the credit of
your designated HKSCC Participant’s stock account on your behalf;
(ii) confirm that you have read and understand the terms and conditions and application
procedures set out in this prospectus and the designated website of the HK eIPO
White Form service (or as the case may be, the agreement you entered into with
your broker or custodian ), and agree to be bound by them;
(iii) (if you are applying through the HKSCC EIPO channel) agree to the arrangements,
undertakings and warranties under the participant agreement between your broker
or custodian and HKSCC and observe the General Rules of HKSCC and the
HKSCC Operational Procedures for giving application instructions to apply for
Hong Kong Offer Shares;
(iv) confirm that you are aware of the restrictions on offers and sales of shares set out
in this prospectus and they do not apply to you, or the person(s) for whose benefit
you have made the application;
(v) confirm that you have read this prospectus and any supplement to it and have relied
only on the information and representations contained therein in making your
application (or as the case may be, causing your application to be made) and will not
rely on any other information or representations;
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--- page 466 ---
(vi) agree that the Joint Sponsors, the Overall Coordinators, the Joint Global
Coordinators, the Joint Bookrunners, the Joint Lead Managers, the Capital Market
Intermediaries, the Underwriters, any of their or the Company’s respective directors,
officers, employees, partners, agents, advisers and any other parties involved in the
Global Offering (the “Relevant Persons”), the H Share Registrar and HKSCC will
not be liable for any information and representations not in this prospectus and any
supplement to it;
(vii) agree to disclose the details of your application and your personal data and any other
personal data which may be required about you and the person(s) for whose benefit
you have made the application to us, the Relevant Persons, the H Share Registrar,
HKSCC, HKSCC Nominees, the Stock Exchange, the SFC and any other statutory
regulatory or governmental bodies or otherwise as required by laws, rules or
regulations, for the purposes under the paragraph heade d“—G . Personal Data —
3. Purposes and 4. Transfer of personal data” in this section;
(viii) agree (without prejudice to any other rights which you may have once your
application (or as the case may be, HKSCC Nominees’ application) has been
accepted) that you will not rescind it because of an innocent misrepresentation;
(ix) agree that subject to Section 44A(6) of the Companies (Winding Up and
Miscellaneous Provisions) Ordinance, any application made by you or HKSCC
Nominees on your behalf cannot be revoked once it is accepted, which will be
evidenced by the notification of the result of the ballot by the H Share Registrar by
way of publication of the results at the time and in the manner as specified in the
paragraph headed “— B. Publication of Results” in this section;
(x) confirm that you are aware of the situations specified in the paragraph headed “—
C. Circumstances In Which Y ou Will Not Be Allocated Hong Kong Offer Shares” in
this section;
(xi) agree that your application or HKSCC Nominees’ application, any acceptance of it
and the resulting contract will be governed by and construed in accordance with the
laws of Hong Kong;
(xii) agree to comply with the Companies Ordinance, the Companies (Winding Up and
Miscellaneous Provisions) Ordinance, the Articles of Association and laws of any
place outside Hong Kong that apply to your application and that neither we nor the
Relevant Persons will breach any law inside and/or outside Hong Kong as a result
of the acceptance of your offer to purchase, or any action arising from your rights
and obligations under the terms and conditions contained in this prospectus;
HOW TO APPLY FOR HONG KONG OFFER SHARES
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(xiii) confirm that (a) your application or HKSCC Nominees’ application on your behalf
is not financed directly or indirectly by the Company, any of the directors, chief
executives, substantial Shareholder(s) or existing shareholder(s) of the Company or
any of its subsidiaries or any of their respective close associates; and (b) you are not
accustomed or will not be accustomed to taking instructions from the Company, any
of the directors, chief executives, substantial shareholder(s) or existing
shareholder(s) of the Company or any of its subsidiaries or any of their respective
close associates in relation to the acquisition, disposal, voting or other disposition
of the H Shares registered in your name or otherwise held by you;
(xiv) warrant that the information you have provided is true and accurate;
(xv) confirm that you understand that we and the Overall Coordinators will rely on your
declarations and representations in deciding whether or not to allocate any Hong
Kong Offer Shares to you and that you may be prosecuted for making a false
declaration;
(xvi) agree to accept Hong Kong Offer Shares applied for or any lesser number allocated
to you under the application;
(xvii) declare and represent that this is the only application made and the only application
intended by you to be made to benefit you or the person for whose benefit you are
applying;
(xviii) (if the application is made for your own benefit) warrant that no other application
has been or will be made for your benefit by giving electronic application
instructions to HKSCC directly or indirectly or through the application channel of
the HK eIPO White Form service or by any one as your agent or by any other
person; and
(xix) (if you are making the application as an agent for the benefit of another person)
warrant that (1) no other application has been or will be made by you as agent for
or for the benefit of that person or by that person or by any other person as agent
for that person by giving electronic application instructions to HKSCC and the
HK eIPO White Form Service Provider and (2) you have due authority to give
electronic application instructions on behalf of that other person as its agent.
HOW TO APPLY FOR HONG KONG OFFER SHARES
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B. PUBLICATION OF RESULTS
Results of Allocation
Y ou can check whether you are successfully allocated any Hong Kong Offer Shares
through:
Platform Date/Time
Applying through the HK eIPO White Form service or HKSCC EIPO channel:
Website /H1118/H1118From the “Allotment Results” page
at www.hkeipo.hk/IPOResult (or
www.tricor.com.hk/ipo/result )
with a “search by ID” function.
24 hours, from 11:00 p.m. on
Thursday, February 5, 2026
to 12:00 midnight on Wednesday,
February 11, 2026 (Hong Kong
time)
The full list of (i) wholly or
partially successful applicants
using the HK eIPO White Form
service and HKSCC EIPO
channel, and (ii) the number of
Hong Kong Offer Shares
conditionally allotted to them,
among other things, will be
displayed at
www.hkeipo.hk/IPOResult or
www.tricor.com.hk/ipo/result
The Stock Exchange’s website at
www.hkexnews.hk and our
website at
www.muyuanfoods.com which
will provide links to the above-
mentioned websites of the H
Share Registrar.
No later than 11:00 p.m. on
Thursday, February 5,
2026
(Hong Kong time)
Telephone /H1118+852 3691 8488 – the allocation
results telephone enquiry line
provided by the H Share
Registrar
between 9:00 a.m. and 6:00 p.m.,
from Friday, February 6, 2026 to
Wednesday, February 11, 2026
(Hong Kong time) on a business
day
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For those applying through the HKSCC EIPO channel, you may also check with your
broker or custodian from 6:00 p.m. on Wednesday, February 4, 2026 (Hong Kong time)
HKSCC Participants can log into FINI and review the allotment result from 6:00 p.m. on
Wednesday, February 4, 2026 (Hong Kong time) on a 24-hour basis and should report any
discrepancies on allotments to HKSCC as soon as practicable.
Allocation Announcement
We expect to announce the level of indications of interest in the International Offering,
the level of applications in the Hong Kong Public Offering and the basis of allocations of Hong
Kong Offer Shares on the Stock Exchange’s website at www.hkexnews.hk and our website at
www.muyuanfoods.com by no later than 11:00 p.m. on Thursday, February 5, 2026 (Hong
Kong time).
C. CIRCUMSTANCES IN WHICH YOU WILL NOT BE ALLOCATED HONG KONG
OFFER SHARES
Y ou should note the following situations in which Hong Kong Offer Shares will not be
allocated to you or the person(s) for whose benefit you are applying for:
1. If your application is revoked:
Y our application or the application made by HKSCC Nominees on your behalf may be
revoked pursuant to Section 44A(6) of the Companies (Winding Up and Miscellaneous
Provisions) Ordinance.
2. If we or our agents exercise our discretion to reject your application:
We, the Overall Coordinators, the H Share Registrar and their respective agents and
nominees have full discretion to reject or accept any application, or to accept only part of any
application, without giving any reasons.
3. If the allocation of Hong Kong Offer Shares is void:
The allocation of Hong Kong Offer Shares will be void if the Stock Exchange does not
grant permission to list the H Shares either:
 within three weeks from the closing date of the application lists; or
 within a longer period of up to six weeks if the Stock Exchange notifies us of that
longer period within three weeks of the closing date of the application lists.
HOW TO APPLY FOR HONG KONG OFFER SHARES
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--- page 470 ---
4. If:
 you make multiple applications or suspected multiple applications. Y ou may refer to
the paragraph headed “— A. Applications for Hong Kong Offer Shares — 5.
Multiple Applications Prohibited” in this section on what constitutes multiple
applications;
 your application instruction is incomplete;
 your payment (or confirmation of funds, as the case may be) is not made correctly;
 the Underwriting Agreements do not become unconditional or are terminated; or
 we or the Overall Coordinators believe that by accepting your application, it or we
would violate applicable securities or other laws, rules or regulations.
5. If there is money settlement failure for allotted H Shares:
Based on the arrangements between HKSCC Participants and HKSCC, HKSCC
Participants will be required to hold sufficient application funds on deposit with their
Designated Bank before balloting. After balloting of Hong Kong Offer Shares, the Receiving
Bank will collect the portion of these funds required to settle each HKSCC Participant’s actual
Hong Kong Offer Share allotment from their Designated Bank.
There is a risk of money settlement failure. In the extreme event of money settlement
failure by a HKSCC Participant (or its Designated Bank), who is acting on your behalf in
settling payment for your allotted shares, HKSCC will contact the defaulting HKSCC
Participant and its Designated Bank to determine the cause of failure and request such
defaulting HKSCC Participant to rectify or procure to rectify the failure.
However, if it is determined that such settlement obligation cannot be met, the affected
Hong Kong Offer Shares will be reallocated to the International Offering. Hong Kong Offer
Shares applied for by you through the broker or custodian may be affected to the extent of
the settlement failure. In the extreme case, you will not be allocated any Hong Kong Offer
Shares due to the money settlement failure by such HKSCC Participant. None of us, the
Relevant Persons, the H Share Registrar and HKSCC is or will be liable if Hong Kong Offer
Shares are not allocated to you due to the money settlement failure.
HOW TO APPLY FOR HONG KONG OFFER SHARES
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--- page 471 ---
D. DESPATCH/COLLECTION OF H SHARE CERTIFICATES AND REFUND OF
APPLICATION MONIES
Y ou will receive one H Share certificate for all Hong Kong Offer Shares allotted to you
under the Hong Kong Public Offering (except pursuant to applications made through the
HKSCC EIPO channel where the H Share certificates will be deposited into CCASS as
described below).
No temporary document of title will be issued in respect of the H Shares. No receipt will
be issued for sums paid on application.
H Share certificates will only become valid at 8:00 a.m. on Friday, February 6, 2026
(Hong Kong time), provided that the Global Offering has become unconditional and the right
of termination described in the section headed “Underwriting” has not been exercised.
Investors who trade H Shares prior to the receipt of H Share certificates or the H Share
certificates becoming valid do so entirely at their own risk.
The right is reserved to retain any H Share certificate(s) and (if applicable) any surplus
application monies pending clearance of application monies.
HOW TO APPLY FOR HONG KONG OFFER SHARES
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--- page 472 ---
The following sets out the relevant procedures and time:
HK eIPO White Form service HKSCC EIPO channel
Despatch/collection of H Share certificate 1
For application
of 1,000,000
Hong Kong
Offer Shares
or more /H1118/H1118/H1118/H1118/H1118
Collection in person at H Share
Registrar, Tricor Investor
Services Limited, at 17/F, Far
East Finance Centre, 16
Harcourt Road, Hong Kong.
Time: from 9:00 a.m. to 1:00
p.m. on Friday, February 6,
2026 (Hong Kong time). If you
are an individual, you must not
authorize any other person to
collect for you. If you are a
corporate applicant, your
authorized representative must
bear a letter of authorization
from your corporation stamped
with your corporation’s chop.
Both individuals and authorized
representatives must produce, at
the time of collection, evidence
of identity acceptable to the H
Share Registrar.
Note: If you do not collect your
H Share certificate(s) personally
within the time above, it/they
will be sent to the address
specified in your application
instructions by ordinary post at
your own risk.
H Share certificate(s) will be
issued in the name of HKSCC
Nominees, deposited into
CCASS and credited to your
designated HKSCC Participant’s
stock account
No action by you is required
1 Except in the event of a tropical cyclone warning signal number 8 or above, a black rainstorm warning and/or
an “extreme conditions” announcement being in force in Hong Kong in the morning on Thursday, February 5,
2026, rendering it impossible for the relevant H Share certificates to be dispatched to HKSCC in a timely
manner, in which case the Company shall procure the H Share Registrar to arrange for delivery of the
supporting documents and H Share certificates in accordance with the contingency arrangements as agreed
between them. Y ou may refer to “— E. Severe Weather Arrangements” in this section.
HOW TO APPLY FOR HONG KONG OFFER SHARES
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--- page 473 ---
HK eIPO White Form service HKSCC EIPO channel
For application
of less than
1,000,000
Hong Kong
Offer Shares /H1118
Y our H Share certificate(s) will be
sent to the address specified in
your application instructions by
ordinary post at your own risk.
Date: Thursday, February 5, 2026
Refund mechanism for surplus application monies paid by you
Date /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Friday, February 6, 2026 Subject to the arrangement
between you and your broker
or custodian
Responsible
party /H1118/H1118/H1118/H1118/H1118/H1118
H Share Registrar Y our broker or custodian
Application
monies paid
through
single bank
account /H1118/H1118/H1118/H1118/H1118
HK eIPO White Form e-Auto
Refund payment instructions to
your designated bank account
Y our broker or custodian will
arrange refund to your
designated bank account subject
to the arrangement between you
and it
Application
monies paid
through
multiple
bank
accounts /H1118/H1118/H1118/H1118
Refund cheque(s) will be
despatched to the address as
specified in your application
instructions by ordinary post at
your own risk.
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--- page 474 ---
E. SEVERE WEATHER ARRANGEMENTS
The Opening and Closing of the Application Lists
The application lists will not open or close on Tuesday, February 3, 2026 if, there is/are:
 a tropical cyclone warning signal number 8 or above;
 a black rainstorm warning; and/or
 Extreme Conditions,
(collectively, “ Severe Weather Signals ”),
in force in Hong Kong at any time between 9:00 a.m. and 12:00 noon on Tuesday, February
3, 2026.
Instead they will open between 11:45 a.m. and 12:00 noon and/or close at 12:00 noon on
the next business day which does not have Severe Weather Signals in force at any time between
9:00 a.m. and 12:00 noon.
Prospective investors should be aware that a postponement of the opening/closing of the
application lists may result in a delay in the listing date. Should there be any changes to the
dates mentioned in the section headed “Expected Timetable” in this prospectus, an
announcement will be made and published on the Stock Exchange’s website at
www.hkexnews.hk and our website at www.muyuanfoods.com of the revised timetable.
If a Severe Weather Signal is hoisted on Thursday, February 5, 2026, the H Share
Registrar will make appropriate arrangements for the delivery of the H Share certificates to the
CCASS Depository’s service counter so that they would be available for trading on Friday,
February 6, 2026.
If a Severe Weather Signal is hoisted on Thursday, February 5, 2026, for application of
less than 1,000,000 Hong Kong Offer Shares, the despatch of physical H Share certificate(s)
will be made by ordinary post when the post office re-opens after the Severe Weather Signal
is lowered or cancelled (e.g. in the afternoon of Thursday, February 5, 2026 or on Friday,
February 6, 2026).
If a Severe Weather Signal is hoisted on Friday, February 6, 2026, for application of
1,000,000 Hong Kong Offer Shares or more, physical H Share certificate(s) will be available
for collection in person at the H Share Registrar’s office after the Severe Weather Signal is
lowered or cancelled (e.g. in the afternoon of Friday, February 6, 2026 or on Monday, February
9, 2026).
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--- page 475 ---
Prospective investors should be aware that if they choose to receive physical H Share
certificates issued in their own name, there may be a delay in receiving the H Share
certificates.
F. ADMISSION OF THE H SHARES INTO CCASS
If the Stock Exchange grants the listing of, and permission to deal in, the H Shares on the
Stock Exchange and we comply with the stock admission requirements of HKSCC, the H
Shares will be accepted as eligible securities by HKSCC for deposit, clearance and settlement
in CCASS with effect from the date of commencement of dealings in the H Shares or any other
date HKSCC chooses. Settlement of transactions between Exchange Participants is required to
take place in CCASS on the second settlement day after any trading day.
All activities under CCASS are subject to the General Rules of HKSCC and HKSCC
Operational Procedures in effect from time to time.
All necessary arrangements have been made enabling the H Shares to be admitted into
CCASS.
Y ou should seek the advice of your broker or other professional advisor for details of the
settlement arrangement as such arrangements may affect your rights and interests.
G. PERSONAL DATA
The following Personal Information Collection Statement applies to any personal data
collected and held by the Company, the H Share Registrar, the receiving bank and the Relevant
Persons about you in the same way as it applies to personal data about applicants other than
HKSCC Nominees. This personal data may include client identifier(s) and your identification
information. By giving application instructions to HKSCC, you acknowledge that you have
read, understood and agree to all of the terms of the Personal Information Collection Statement
below.
1. Personal Information Collection Statement
This Personal Information Collection Statement informs the applicant for, and holder of,
Hong Kong Offer Shares, of the policies and practices of the Company and the H Share
Registrar in relation to personal data and the Personal Data (Privacy) Ordinance (Chapter 486
of the Laws of Hong Kong).
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--- page 476 ---
2. Reasons for the collection of your personal data
It is necessary for applicants and registered holders of Hong Kong Offer Shares to ensure
that personal data supplied to the Company or its agents and the H Share Registrar is accurate
and up-to-date when applying for Hong Kong Offer Shares or transferring Hong Kong Offer
Shares into or out of their names or in procuring the services of the H Share Registrar.
Failure to supply the requested data or supplying inaccurate data may result in your
application for Hong Kong Offer Shares being rejected, or in the delay or the inability of the
Company or the H Share Registrar to effect transfers or otherwise render their services. It may
also prevent or delay registration or transfers of Hong Kong Offer Shares which you have
successfully applied for and/or the despatch of H Share certificate(s) to which you are entitled.
It is important that applicants for and holders of Hong Kong Offer Shares inform the
Company and the H Share Registrar immediately of any inaccuracies in the personal data
supplied.
3. Purposes
Y our personal data may be used, held, processed, and/or stored (by whatever means) for
the following purposes:
 processing your application and refund cheque and HK eIPO White Form e-Auto
Refund payment instruction(s), where applicable, verification of compliance with
the terms and application procedures set out in this prospectus and announcing
results of allocation of Hong Kong Offer Shares;
 compliance with applicable laws and regulations in Hong Kong and elsewhere;
 registering new issues or transfers into or out of the names of the holders of the H
Shares including, where applicable, HKSCC Nominees;
 maintaining or updating the register of members of the Company;
 verifying identities of applicants for and holders of the H Shares and identifying any
duplicate applications for the H Shares;
 facilitating Hong Kong Offer Shares balloting;
 establishing benefit entitlements of holders of the H Shares, such as dividends,
rights issues, bonus issues, etc.;
 distributing communications from the Company and its subsidiaries;
 compiling statistical information and profiles of the holder of the H Shares;
HOW TO APPLY FOR HONG KONG OFFER SHARES
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--- page 477 ---
 disclosing relevant information to facilitate claims on entitlements; and
 any other incidental or associated purposes relating to the above and/or to enable the
Company and the H Share Registrar to discharge their obligations to applicants and
holders of the H Shares and/or regulators and/or any other purposes to which
applicants and holders of the H Shares may from time to time agree.
4. Transfer of personal data
Personal data held by the Company and the H Share Registrar relating to the applicants
for and holders of Hong Kong Offer Shares will be kept confidential but the Company and the
H Share Registrar may, to the extent necessary for achieving any of the above purposes,
disclose, obtain or transfer (whether within or outside Hong Kong) the personal data to, from
or with any of the following:
 the Company’s appointed agents such as financial advisers, receiving bank and
overseas principal share registrar;
 HKSCC or HKSCC Nominees, who will use the personal data and may transfer the
personal data to the H Share Registrar, in each case for the purposes of providing its
services or facilities or performing its functions in accordance with its rules or
procedures and operating FINI and CCASS (including where applicants for the
Hong Kong Offer Shares request a deposit into CCASS);
 any agents, contractors or third-party service providers who offer administrative,
telecommunications, computer, payment or other services to the Company or the H
Share Registrar in connection with their respective business operation;
 the Stock Exchange, the SFC and any other statutory regulatory or governmental
bodies or otherwise as required by laws, rules or regulations, including for the
purpose of the Stock Exchange’s administration of the Listing Rules and the SFC’s
performance of its statutory functions; and
 any persons or institutions with which the holders of Hong Kong Offer Shares have
or propose to have dealings, such as their bankers, solicitors, accountants or brokers,
etc.
5. Retention of personal data
The Company and the H Share Registrar will keep the personal data of the applicants and
holders of Hong Kong Offer Shares for as long as necessary to fulfill the purposes for which
the personal data were collected. Personal data which is no longer required will be destroyed
or dealt with in accordance with the Personal Data (Privacy) Ordinance (Chapter 486 of the
Laws of Hong Kong).
HOW TO APPLY FOR HONG KONG OFFER SHARES
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--- page 478 ---
6. Access to and correction of personal data
Applicants for and holders of Hong Kong Offer Shares have the right to ascertain whether
the Company or the H Share Registrar hold their personal data, to obtain a copy of that data,
and to correct any data that is inaccurate. The Company and the H Share Registrar have the
right to charge a reasonable fee for the processing of such requests. All requests for access to
data or correction of data should be addressed to the Company and the H Share Registrar, at
their registered address disclosed in the section headed “Corporate information” in this
prospectus or as notified from time to time, for the attention of the company secretary, or the
H Share Registrar for the attention of the privacy compliance officer.
HOW TO APPLY FOR HONG KONG OFFER SHARES
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--- page 479 ---
The following is the text of a report set out on pages I-1 to I-205, received from the
Company’ s reporting accountants,ה(౷ஷΥྫ) (KPMG Huazhen
LLP), for the purpose of incorporation in this prospectus.
ACCOUNTANTS’ REPORT ON HISTORICAL FINANCIAL INFORMATION TO THE
DIRECTORS OF MUYUAN FOODS CO., LTD. AND MORGAN STANLEY ASIA
LIMITED, CITIC SECURITIES (HONG KONG) LIMITED AND GOLDMAN SACHS
(ASIA) L.L.C.
Introduction
We report on the historical financial information of Muyuan Foods Co., Ltd. (ۜ࠮ࡡى
ʮ̡) (the “Company”) and its subsidiaries (together, the “Group”) set out on pages
I-4 to I-205, which comprises the consolidated and company balance sheets as at 31 December
2022, 2023 and 2024 and 30 September 2025, the consolidated and company income
statements, the consolidated and company cash flow statements and the consolidated and
company statements of changes in shareholders’ equity for each of the years ended
31 December 2022, 2023 and 2024 and the nine months ended 30 September 2025 (the “Track
Record Period”), and material accounting policy information and other explanatory
information (together, the “Historical Financial Information”). The Historical Financial
Information set out on pages I-4 to I-205 forms an integral part of this report, which has been
prepared for inclusion in the prospectus of the Company dated 29 January 2026 (the
“Prospectus”) in connection with the initial listing of H Shares of the Company on the Main
Board of The Stock Exchange of Hong Kong Limited.
Directors’ responsibility for the Historical Financial Information
The directors of the Company are responsible for the preparation of the Historical
Financial Information that gives a true and fair view in accordance with the basis of preparation
and presentation set out in Note I to the Historical Financial Information, and for such internal
control as the directors of the Company determine is necessary to enable the preparation of the
Historical Financial Information that is free from material misstatement, whether due to fraud
or error.
APPENDIX I ACCOUNTANTS’ REPORT
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Reporting accountants’ responsibility
Our responsibility is to express an opinion on the Historical Financial Information and to
report our opinion to you. We conducted our work in accordance with Hong Kong Standard on
Investment Circular Reporting Engagements 200 “Accountants’ Reports on Historical
Financial Information in Investment Circulars” issued by the Hong Kong Institute of Certified
Public Accountants (the “HKICPA”). This standard requires that we comply with ethical
standards and plan and perform our work to obtain reasonable assurance about whether the
Historical Financial Information is free from material misstatement.
Our work involved performing procedures to obtain evidence about the amounts and
disclosures in the Historical Financial Information. The procedures selected depend on the
reporting accountants’ judgement, including the assessment of risks of material misstatement
of the Historical Financial Information, whether due to fraud or error. In making those risk
assessments, the reporting accountants consider internal control relevant to the entity’s
preparation of the Historical Financial Information that gives a true and fair view in accordance
with the basis of preparation and presentation set out in Note I to the Historical Financial
Information in order to design procedures that are appropriate in the circumstances, but not for
the purpose of expressing an opinion on the effectiveness of the entity’s internal control. Our
work also included evaluating the appropriateness of accounting policies used and the
reasonableness of accounting estimates made by the directors, as well as evaluating the overall
presentation of the Historical Financial Information.
We believe that the evidence we have obtained is sufficient and appropriate to provide a
basis for our opinion.
Opinion
In our opinion, the Historical Financial Information gives, for the purpose of the
accountants’ report, a true and fair view of the Group’s and the Company’s financial position
as at 31 December 2022, 2023 and 2024 and 30 September 2025 and of the Group’s and the
Company’s financial performance and cash flows for the Track Record Period in accordance
with the basis of preparation and presentation set out in Note I to the Historical Financial
Information.
APPENDIX I ACCOUNTANTS’ REPORT
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Review of stub period corresponding financial information
We have reviewed the stub period corresponding financial information of the Group
which comprises the consolidated and company income statements, the consolidated and
company cash flow statements and the consolidated and company statements of changes in
shareholders’ equity for the nine months ended 30 September 2024 and other explanatory
information (the “Stub Period Corresponding Financial Information”). The directors of the
Company are responsible for the preparation and presentation of the Stub Period
Corresponding Financial Information in accordance with the basis of preparation and
presentation set out in Note I to the Historical Financial Information. Our responsibility is to
express a conclusion on the Stub Period Corresponding Financial Information based on our
review. We conducted our review in accordance with China Standards on Review Engagements
2101 “Engagements to Review Financial Statements”. A review consists of making enquiries,
primarily of persons responsible for financial and accounting matters, and applying analytical
and other review procedures. A review is substantially less in scope than an audit conducted
in accordance with China Standards on Auditing for Certified Public Accountants and
consequently does not enable us to obtain assurance that we would become aware of all
significant matters that might be identified in an audit. Accordingly, we do not express an audit
opinion. Based on our review, nothing has come to our attention that causes us to believe that
the Stub Period Corresponding Financial Information, for the purpose of the accountants’
report, is not prepared, in all material respects, in accordance with the basis of preparation and
presentation set out in Note I to the Historical Financial Information.
Report on matters under the Rules Governing the Listing of Securities on The Stock
Exchange of Hong Kong Limited and the Companies (Winding Up and Miscellaneous
Provisions) Ordinance
Adjustments
In preparing the Historical Financial Information, no adjustments to the Underlying
Financial Statements as defined on page I-4 have been made.
Dividends
We refer to Note IV .41 to the Historical Financial Information which contains information
about the dividends paid by the Company in respect of the Track Record Period.
KPMG Huazhen LLP
8th Floor, KPMG Tower
Oriental Plaza
1 East Chang An Avenue
Beijing China
29 January 2026
APPENDIX I ACCOUNTANTS’ REPORT
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HISTORICAL FINANCIAL INFORMATION
Set out below is the Historical Financial Information which forms an integral part of this
accountants’ report.
The consolidated financial statements of the Group for the Track Record Period, on which
the Historical Financial Information is based, were audited byה( ࣿ
౷ஷΥྫ) (KPMG Huazhen LLP) under separate terms of engagement with the Company in
accordance with China Standards on Auditing for Certified Public Accountants (the
“Underlying Financial Statements”).
APPENDIX I ACCOUNTANTS’ REPORT
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CONSOLIDATED BALANCE SHEET
(Expressed in Renminbi Yuan)
As at 31 December
As at
30 September
Note 2022 2023 2024 2025
Assets
Current assets
Cash at bank and on hand /H1118 IV .1 20,793,548,584.65 19,429,106,263.01 16,951,642,855.00 19,035,214,044.41
Financial assets held for
trading /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118IV .2 3,041,536.82 21,184,000.00 2,886,840.00 2,208,296,144.65
Bills receivable /H1118/H1118/H1118/H1118/H1118/H1118IV .3 60,000,000.00 129,090,000.00 152,900,000.00 208,473,480.50
Accounts receivable /H1118/H1118/H1118/H1118IV .4 176,590,994.75 167,836,981.59 231,188,535.57 467,110,780.80
Prepayments /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118IV .5 2,101,539,155.37 535,050,361.12 524,347,851.25 481,672,060.15
Other receivables /H1118/H1118/H1118/H1118/H1118IV .6 492,775,020.47 175,547,675.62 90,551,665.56 57,524,966.20
Inventories /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118IV .7 38,251,719,104.60 41,930,812,919.17 41,969,838,456.65 36,520,289,325.05
Other current assets /H1118/H1118/H1118/H1118IV .8 699,133,375.61 1,194,170,765.71 1,395,245,001.82 1,575,756,465.68
Total current assets /H1118/H1118/H1118/H1118/H1118 62,578,347,772.27 63,582,798,966.22 61,318,601,205.85 60,554,337,267.44------------ ------------ ------------ ------------
Non-current assets
Long-term equity
investments /H1118/H1118/H1118/H1118/H1118/H1118/H1118IV .9 581,847,949.59 718,748,080.54 903,747,850.94 939,196,502.07
Investments in other
equity instruments /H1118/H1118/H1118IV .10 143,000,000.00 106,524,594.25 106,524,594.25 88,732,025.63
Investment properties /H1118/H1118/H1118IV .11 125,537,160.44 109,199,197.68 103,194,397.62 98,690,797.58
Fixed assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118IV .12 106,358,717,863.88 112,150,493,445.44 106,751,360,258.78 101,353,281,667.56
Construction in progress /H1118 IV .13 7,441,270,850.48 2,308,343,400.07 2,018,203,532.86 3,227,149,012.29
Productive biological
assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118IV .14 7,334,832,511.90 9,315,122,160.11 9,355,138,722.11 7,741,801,401.33
Right-of-use assets /H1118/H1118/H1118/H1118IV .15 6,682,770,525.52 5,274,127,008.31 5,122,362,401.24 4,728,890,053.41
Intangible assets /H1118/H1118/H1118/H1118/H1118/H1118IV .16 952,350,367.80 1,155,187,832.48 1,186,610,682.35 1,205,944,342.61
Long-term deferred
expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118IV .17 12,642,313.65 65,078,016.51 62,200,791.24 56,805,392.48
Deferred tax assets /H1118/H1118/H1118/H1118IV .18 65,805,671.17 69,452,821.28 100,762,251.66 127,419,158.46
Other non-current assets /H1118/H1118 IV .19 670,488,812.30 549,478,379.35 620,017,142.02 633,672,012.52
Total non-current assets /H1118/H1118/H1118 130,369,264,026.73 131,821,754,936.02 126,330,122,625.07 120,201,582,365.94------------ ------------ ------------ ------------
Total assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118192,947,611,799.00 195,404,553,902.24 187,648,723,830.92 180,755,919,633.38
The accompanying notes are integral part of the Historical Financial Information.
APPENDIX I ACCOUNTANTS’ REPORT
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As at 31 December
As at
30 September
Note 2022 2023 2024 2025
Liabilities and shareholders’
equity
Current liabilities
Short-term loans /H1118/H1118/H1118/H1118/H1118/H1118IV .21 29,165,439,679.99 46,929,024,084.71 45,257,669,125.09 39,760,262,858.02
Financial liabilities held
for trading /H1118/H1118/H1118/H1118/H1118/H1118/H1118 – – – 694,260.00
Bills payable /H1118/H1118/H1118/H1118/H1118/H1118/H1118IV .22 3,157,054,048.07 2,513,903,720.49 2,723,724,853.68 2,095,063,771.80
Accounts payable /H1118/H1118/H1118/H1118/H1118IV .23 25,186,203,024.02 23,463,033,895.99 17,993,020,605.06 12,306,405,043.65
Contract liabilities /H1118/H1118/H1118/H1118/H1118IV .24 849,730,442.94 570,960,230.30 599,509,850.21 907,896,945.58
Employee benefits
payable /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118IV .25 1,543,858,746.62 1,340,395,662.34 1,106,514,953.67 705,427,012.73
Taxes payable /H1118/H1118/H1118/H1118/H1118/H1118/H1118IV .26 154,775,289.00 56,076,675.29 61,655,813.71 273,490,202.54
Other payables /H1118/H1118/H1118/H1118/H1118/H1118IV .27 8,311,165,084.58 11,092,383,654.66 8,348,220,056.94 11,840,928,139.02
Non-current liabilities due
within one year /H1118/H1118/H1118/H1118/H1118IV .28 9,691,733,567.04 8,651,187,320.20 8,204,573,858.38 8,505,120,787.79
Other current liabilities /H1118/H1118 IV .29 107,216,533.16 42,074,470.18 1,181,623,633.17 403,693,403.40
Total current liabilities /H1118/H1118/H1118 78,167,176,415.42 94,659,039,714.16 85,476,512,749.91 76,798,982,424.53------------ ------------ ------------ ------------
Net current liabilities /H1118/H1118/H1118/H1118 (15,588,828,643.15) (31,076,240,747.94) (24,157,911,544.06) (16,244,645,157.09)
Non-current liabilities
Long-term loans /H1118/H1118/H1118/H1118/H1118/H1118IV .30 10,646,385,315.97 9,863,454,832.92 8,797,453,756.82 7,924,528,346.39
Debentures payable /H1118/H1118/H1118/H1118IV .31 8,921,277,714.77 9,206,800,808.08 9,465,543,691.34 11,638,198,817.00
Lease liabilities /H1118/H1118/H1118/H1118/H1118/H1118IV .32 4,384,635,532.40 4,111,587,064.55 4,354,705,901.57 2,231,392,698.21
Long-term payables /H1118/H1118/H1118/H1118IV .33 1,997,498,043.09 2,615,724,345.94 1,177,560,016.60 851,177,109.00
Deferred income /H1118/H1118/H1118/H1118/H1118IV .34 760,261,909.27 911,291,558.36 840,718,598.53 871,823,085.02
Total non-current liabilities /H1118 26,710,058,515.50 26,708,858,609.85 24,635,981,964.86 23,517,120,055.62------------ ------------ ------------ ------------
Total liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118104,877,234,930.92 121,367,898,324.01 110,112,494,714.77 100,316,102,480.15------------ ------------ ------------ ------------
Shareholders’ equity
Share capital /H1118/H1118/H1118/H1118/H1118/H1118/H1118IV .35 5,472,283,869.00 5,465,350,578.00 5,462,767,761.00 5,462,771,029.00
Other equity instruments /H1118 IV .36 1,017,236,197.66 1,017,198,445.32 1,017,159,925.57 1,017,143,127.81
Including:
Preference shares /H1118/H1118/H1118/H1118 ––––
Perpetual bonds /H1118/H1118/H1118/H1118/H1118 ––––
Capital reserve /H1118/H1118/H1118/H1118/H1118/H1118IV .37 17,631,340,182.64 17,691,548,238.01 13,729,431,669.13 12,946,446,656.49
Less: Treasury shares /H1118/H1118/H1118IV .38 2,084,422,931.59 2,818,870,388.83 2,999,995,136.61 4,049,917,635.58
Other comprehensive
income /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118IV .39 3,041,536.82 (4,713,185.75) (33,576,565.75) (53,724,534.37)
Surplus reserve /H1118/H1118/H1118/H1118/H1118/H1118IV .40 1,955,992,514.78 2,198,021,021.15 2,584,593,422.02 2,584,593,422.02
Retained earnings /H1118/H1118/H1118/H1118/H1118IV .41 47,787,878,960.00 39,279,516,665.20 52,271,396,781.65 58,963,018,682.04
Total equity attributable to
shareholders of the
Company /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111871,783,350,329.31 62,828,051,373.10 72,031,777,857.01 76,870,330,747.41
Non-controlling interests /H1118 16,287,026,538.77 11,208,604,205.13 5,504,451,259.14 3,569,486,405.82
Total shareholders’ equity /H1118/H1118 88,070,376,868.08 74,036,655,578.23 77,536,229,116.15 80,439,817,153.23------------
------------ ------------ ------------
Total liabilities and
shareholders’ equity /H1118/H1118/H1118/H1118 192,947,611,799.00 195,404,553,902.24 187,648,723,830.92 180,755,919,633.38
The accompanying notes are integral part of the Historical Financial Information.
APPENDIX I ACCOUNTANTS’ REPORT
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COMPANY BALANCE SHEET
(Expressed in Renminbi Yuan)
As at 31 December
As at
30 September
Note 2022 2023 2024 2025
Assets
Current assets
Cash at bank and on hand /H1118 XV .1 5,052,211,309.66 8,417,334,728.97 6,241,488,259.54 11,965,557,797.52
Financial assets held for
trading /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118 2,725,036.82 21,140,800.00 2,851,840.00 432,541,134.30
Bills receivable /H1118/H1118/H1118/H1118/H1118/H1118 360,000,000.00 143,300,000.00 697,591,400.00 206,690,000.00
Accounts receivable /H1118/H1118/H1118/H1118XV .2 6,349,376,814.20 2,130,074,158.53 1,490,963,098.11 1,535,355,508.25
Prepayments /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,880,578,741.02 26,112,113.05 11,602,678.76 34,227,683.13
Other receivables /H1118/H1118/H1118/H1118/H1118XV .3 53,713,922,050.01 43,000,203,390.02 45,710,631,616.32 61,717,182,798.81
Including:
Interest receivable /H1118/H1118/H1118 ––––
Dividends receivable /H1118/H1118 3,000,000,000.00 960,262.02 – –
Inventories /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118XV .4 630,049,106.69 697,436,781.34 705,698,433.07 740,396,742.28
Other current assets /H1118/H1118/H1118/H1118 9,726,034.40 9,070,955.49 16,338,518.06 53,725,184.23
Total current assets /H1118/H1118/H1118/H1118/H1118 69,998,589,092.80 54,444,672,927.40 54,877,165,843.86 76,685,676,848.52------------ ------------ ------------ ------------
Non-current assets
Long-term equity
investments /H1118/H1118/H1118/H1118/H1118/H1118/H1118XV .5 61,699,429,452.83 73,465,767,782.90 82,898,802,520.89 85,545,117,213.85
Fixed assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118XV .6 1,046,759,560.82 1,054,037,797.03 970,615,221.92 1,170,685,625.56
Construction in progress /H1118 54,896,128.31 42,499,310.54 26,910,825.50 48,115,929.73
Productive biological
assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118117,555,327.59 161,749,021.72 142,084,269.75 151,488,967.60
Right-of-use assets /H1118/H1118/H1118/H1118 58,179,039.45 245,843,807.55 202,764,814.55 186,041,295.07
Intangible assets /H1118/H1118/H1118/H1118/H1118/H1118 32,100,545.99 138,145,252.63 134,273,723.34 131,609,044.19
Long-term deferred
expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118 – 46,063,855.28 39,071,487.09 37,167,710.14
Other non-current assets /H1118/H1118 242,073,899.74 39,879,757.88 46,389,855.03 58,938,421.33
Total non-current assets /H1118/H1118/H1118 63,250,993,954.73 75,193,986,585.53 84,460,912,718.07 87,329,164,207.47------------ ------------ ------------ ------------
Total assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118133,249,583,047.53 129,638,659,512.93 139,338,078,561.93 164,014,841,055.99
The accompanying notes are integral part of the Historical Financial Information.
APPENDIX I ACCOUNTANTS’ REPORT
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As at 31 December
As at
30 September
Note 2022 2023 2024 2025
Liabilities and shareholders’
equity
Current liabilities
Short-term loans /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118XV .7 13,037,653,129.00 24,170,927,337.14 22,415,698,647.21 24,279,355,119.07
Financial liabilities held for
trading /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118 – – – 238,160.00
Bills payable /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118XV .8 2,476,100,593.58 4,262,446,823.34 5,037,425,874.36 4,621,410,000.00
Accounts payable /H1118/H1118/H1118/H1118/H1118/H1118/H1118XV .9 458,160,994.96 615,235,954.40 2,263,190,997.31 3,099,137,781.22
Contract liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118 382,610,310.69 315,390,508.75 524,059,355.55 569,706,547.47
Employee benefits payable /H1118/H1118 81,978,165.66 57,741,632.85 46,651,652.02 28,425,287.33
Taxes payable /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118103,650,228.73 3,584,390.58 6,789,956.60 23,404,740.47
Other payables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118XV .10 74,469,910,811.60 58,266,939,051.17 63,127,896,615.42 83,601,274,570.71
Non-current liabilities due
within one year /H1118/H1118/H1118/H1118/H1118/H1118/H1118XV .11 1,222,619,202.05 1,111,120,022.33 2,198,544,994.03 3,614,827,308.29
Other current liabilities /H1118/H1118/H1118/H1118 – 20,000,000.00 1,155,669,177.30 361,938,698.65
Total current liabilities /H1118/H1118/H1118/H1118/H1118 92,232,683,436.27 88,823,385,720.56 96,775,927,269.80 120,199,718,213.21----------- ----------- ----------- -----------
Net current liabilities /H1118/H1118/H1118/H1118/H1118/H1118 (22,234,094,343.47) (34,378,712,793.16) (41,898,761,425.94) (43,514,041,364.69)
Non-current liabilities
Long-term loans /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118XV .12 1,400,681,556.27 2,823,009,673.21 5,187,829,293.30 6,237,003,974.70
Debentures payable /H1118/H1118/H1118/H1118/H1118/H1118XV .13 8,921,277,714.77 9,206,800,808.08 9,465,543,691.34 11,638,198,817.00
Lease liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118 43,677,788.56 229,944,666.47 191,012,863.83 171,908,163.53
Long-term payables /H1118/H1118/H1118/H1118/H1118/H1118 – – 24,364,289.17 12,196,469.31
Deferred income /H1118/H1118/H1118/H1118/H1118/H1118/H1118 24,189,083.37 25,854,305.77 24,981,347.63 37,441,341.42
Total non-current liabilities /H1118/H1118/H1118 10,389,826,142.97 12,285,609,453.53 14,893,731,485.27 18,096,748,765.96----------- ----------- ----------- -----------
Total liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118102,622,509,579.24 101,108,995,174.09 111,669,658,755.07 138,296,466,979.17----------- ----------- ----------- -----------
Shareholders’ equity
Share capital /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118IV .35 5,472,283,869.00 5,465,350,578.00 5,462,767,761.00 5,462,771,029.00
Other equity instruments /H1118/H1118/H1118IV .36 1,017,236,197.66 1,017,198,445.32 1,017,159,925.57 1,017,143,127.81
Including:
Preference shares /H1118/H1118/H1118/H1118/H1118/H1118 ––––
Perpetual bonds /H1118/H1118/H1118/H1118/H1118/H1118/H1118 ––––
Capital reserve /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111817,705,416,705.24 17,903,195,897.64 17,891,640,689.43 17,019,085,254.60
Less: Treasury shares /H1118/H1118/H1118/H1118/H1118IV .38 2,084,422,931.59 2,818,870,388.83 2,999,995,136.61 4,049,917,635.58
Other comprehensive income /H1118 2,725,036.82 31,723,120.00 2,863,840.00 625,040.00
Surplus reserve /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,955,992,514.78 2,198,021,021.15 2,584,593,422.02 2,584,593,422.02
Retained earnings /H1118/H1118/H1118/H1118/H1118/H1118/H1118 6,557,842,076.38 4,733,045,665.56 3,709,389,305.45 3,684,073,838.97
Total shareholders’ equity /H1118/H1118/H1118/H1118 30,627,073,468.29 28,529,664,338.84 27,668,419,806.86 25,718,374,076.82----------- ----------- ----------- -----------
Total liabilities and
shareholders’ equity /H1118/H1118/H1118/H1118/H1118/H1118 133,249,583,047.53 129,638,659,512.93 139,338,078,561.93 164,014,841,055.99
The accompanying notes are integral part of the Historical Financial Information.
APPENDIX I ACCOUNTANTS’ REPORT
– I-8 –


--- page 487 ---
CONSOLIDATED INCOME STATEMENT
(Expressed in Renminbi Yuan)
Y ear ended 31 December
Nine months ended
30 September
Note 2022 2023 2024 2024 2025
(unaudited)
I. Revenue /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118IV .42 124,826,212,177.74 110,860,727,714.40 137,946,892,076.87 96,775,125,566.31 111,790,004,878.72
Less: Operating costs /H1118/H1118/H1118/H1118/H1118/H1118IV .42 102,987,059,470.99 107,414,785,992.36 111,666,526,476.89 80,065,365,369.90 90,855,472,034.76
Taxes and surcharges /H1118/H1118/H1118/H1118IV .43 185,304,036.48 189,563,390.10 223,192,113.78 162,335,264.45 202,646,927.24
Selling and distribution
expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118IV .44 758,741,877.22 982,629,505.79 1,095,680,280.69 789,207,900.14 943,713,593.90
General and administrative
expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118IV .45 4,201,403,857.32 3,876,278,534.16 3,331,717,607.87 2,688,276,990.82 2,741,455,314.71
Research and development
expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118IV .46 1,142,403,916.15 1,657,729,636.74 1,747,217,657.28 1,267,646,353.55 1,263,347,695.17
Financial expenses /H1118/H1118/H1118/H1118/H1118IV .47 2,907,716,277.46 3,054,136,191.99 2,975,449,911.06 2,285,137,859.51 1,950,978,061.16
Including:
Interest expenses /H1118/H1118/H1118/H1118 2,889,858,125.59 3,239,357,630.51 3,177,468,228.97 2,430,135,550.44 2,024,669,174.63
Interest income /H1118/H1118/H1118/H1118/H1118 159,638,278.63 249,835,044.71 237,500,715.55 184,703,009.31 137,319,705.14
Add: Other income /H1118/H1118/H1118/H1118/H1118/H1118/H1118IV .48 2,188,567,446.35 2,805,639,552.51 3,010,397,096.76 2,552,428,801.75 2,028,722,476.96
Investment income/
(losses) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118IV .49 46,891,941.67 (6,388,843.39) 99,638,320.05 42,171,395.16 95,790,321.35
Including:
Income/(losses) from
investment in associates
and joint ventures /H1118/H1118/H1118 46,131,577.04 (21,979,501.36) 72,263,566.47 37,488,147.89 62,351,886.88
Gains/(losses) from changes
in fair value /H1118/H1118/H1118/H1118/H1118/H1118 – – 158,000.00 (1,435,440.00) 6,027,084.65
Credit (losses)/reversal /H1118/H1118/H1118IV .50 (23,105,915.89) (4,165,810.97) 283,692.84 9,156,742.95 (13,032,562.84)
Impairment losses /H1118/H1118/H1118/H1118/H1118IV .51 – (202,476,115.94) (12,884,326.14) (12,472,553.87) (2,934,053.12)
(Losses)/gains from asset
disposals /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118IV .52 (2,241,278.21) (10,125,079.30) 5,845,833.88 7,590,173.16 1,783,198.80
II. Operating profit/(loss) /H1118/H1118/H1118/H1118/H1118 14,853,694,936.04 (3,731,911,833.83) 20,010,546,646.69 12,114,594,947.09 15,948,747,717.58
Add: Non-operating income /H1118/H1118/H1118IV .53 376,910,540.58 157,186,690.29 84,412,274.98 64,300,608.96 82,316,184.16
Less: Non-operating expenses /H1118/H1118 IV .53 300,573,288.40 595,363,342.03 1,198,480,011.03 965,561,318.04 934,591,851.01
III. Profit/(loss) before income tax /H1118/H1118 14,930,032,188.22 (4,170,088,485.57) 18,896,478,910.64 11,213,334,238.01 15,096,472,050.73
Less: Income tax expenses /H1118/H1118/H1118IV .54 (3,368,403.36) (2,219,502.73) (28,565,993.61) (32,317,420.15) (15,651,169.07)
IV . Net profit/(loss) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111814,933,400,591.58 (4,167,868,982.84) 18,925,044,904.25 11,245,651,658.16 15,112,123,219.80The accompanying notes are integral part of the Historical Financial Information.
APPENDIX I ACCOUNTANTS’ REPORT
– I-9 –


--- page 488 ---
Y ear ended 31 December
Nine months ended
30 September
Note 2022 2023 2024 2024 2025
(unaudited)
IV . Net profit/(loss) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111814,933,400,591.58 (4,167,868,982.84) 18,925,044,904.25 11,245,651,658.16 15,112,123,219.80
(1) Net profit/(loss) classified by
business continuity:
1. Net profit/(loss) from
continuing operations /H1118/H1118/H1118/H1118 14,933,400,591.58 (4,167,868,982.84) 18,925,044,904.25 11,245,651,658.16 15,112,123,219.80
2. Net profit/(loss) from
discontinued operations /H1118/H1118/H1118 –––––
(2) Net profit/(loss) classified by
ownership:
1. Net profit/(loss) attributable
to shareholders of the
Company /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111813,266,156,512.39 (4,263,280,820.31) 17,881,260,485.27 10,481,068,452.78 14,778,904,957.09
2. Net profit/(loss) attributable
to non-controlling interests /H1118 1,667,244,079.19 95,411,837.47 1,043,784,418.98 764,583,205.38 333,218,262.71
V . Other comprehensive income,
net of tax /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118IV .39
(1) Other comprehensive income
(net of tax) attributable to
shareholders of the Company
1. Items that will not be
reclassified to profit or loss
a. Changes in fair value of
investments in other
equity instruments /H1118/H1118/H1118 – (36,475,405.75) – – (17,792,568.62)
2. Items that may be
reclassified to profit or loss
a. Cash flow hedge
reserve /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111856,850,697.59 28,720,683.18 (28,863,380.00) (31,828,670.00) (2,355,400.00)
(2) Other comprehensive income
(net of tax) attributable to
non-controlling interests /H1118/H1118/H1118/H1118 –––––----------
---------- ---------- ---------- ----------
VI. Total comprehensive income /H1118/H1118/H1118/H1118/H1118 14,990,251,289.17 (4,175,623,705.41) 18,896,181,524.25 11,213,822,988.16 15,091,975,251.18
(1) Attributable to shareholders of
the Company /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111813,323,007,209.98 (4,271,035,542.88) 17,852,397,105.27 10,449,239,782.78 14,758,756,988.47
(2) Attributable to
non-controlling interests /H1118/H1118/H1118/H1118 1,667,244,079.19 95,411,837.47 1,043,784,418.98 764,583,205.38 333,218,262.71
VII. Earnings per share:
(1) Basic earnings/(loss) per
share /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118IV .55 2.49 (0.79) 3.30 1.94 2.74
(2) Diluted earnings/(loss) per
share /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118IV .55 2.45 (0.79) 3.24 1.91 2.69
The accompanying notes are integral part of the Historical Financial Information.
APPENDIX I ACCOUNTANTS’ REPORT
– I-10 –


--- page 489 ---
COMPANY INCOME STATEMENT
(Expressed in Renminbi Yuan)
Y ear ended 31 December
Nine months ended
30 September
Note 2022 2023 2024 2024 2025
(unaudited)
I. Revenue /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118XV .14 8,522,541,347.09 5,245,953,577.28 3,672,780,881.03 2,642,255,274.89 2,539,765,722.67
Less: Operating costs /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118XV .14 7,274,648,893.41 5,030,715,735.60 2,886,959,892.30 2,122,501,430.28 2,022,062,697.96
Taxes and surcharges /H1118/H1118/H1118/H1118/H1118/H1118 9,661,519.51 5,336,085.56 9,586,598.48 7,712,090.89 4,250,680.95
Selling and distribution expenses /H1118 30,651,165.13 36,242,708.48 48,792,549.05 33,235,589.44 54,069,033.09
General and administrative
expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118678,770,308.15 587,953,612.84 516,364,995.72 376,434,432.71 402,720,858.08
Research and development
expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118135,950,481.48 189,826,092.82 200,374,912.68 147,450,375.08 128,427,153.94
Financial expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118 1,273,356,084.56 1,397,630,596.84 1,451,951,438.45 1,094,264,923.86 1,145,902,374.24
Including:
Interest expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118 1,200,854,079.55 1,489,365,710.10 1,561,483,224.76 1,171,175,528.98 1,202,389,476.87
Interest income /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118 68,161,398.80 103,695,778.59 126,810,494.13 93,071,041.99 77,100,935.67
Add: Other income /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111844,081,858.35 89,161,656.21 104,534,954.50 101,915,500.36 37,908,324.66
Investment income /H1118/H1118/H1118/H1118/H1118/H1118/H1118XV .15 4,238,730,224.63 4,425,170,947.95 5,306,059,598.49 2,481,952,706.18 9,236,446,556.27
Including:
Income/(losses) from investment
in associates and joint ventures /H1118 40,140,982.14 (26,345,510.57) 62,270,356.72 28,036,220.98 52,392,449.18
Gains/(losses) from
changes in fair value /H1118/H1118/H1118/H1118/H1118 – – 158,000.00 (1,435,440.00) 646,574.30
Credit (losses)/reversal /H1118/H1118/H1118/H1118/H1118 (12,365,000.98) 916,039.65 10,232,988.04 9,699,540.78 (989,589.21)
Gains/(losses) from asset
disposals /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118 104,794.91 1,089,665.10 1,269,170.98 1,325,621.19 (5,757.27)
II. Operating profit /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,390,054,771.76 2,514,587,054.05 3,981,005,206.36 1,454,114,361.14 8,056,339,033.16
Add: Non-operating income /H1118/H1118/H1118/H1118/H1118 56,781,772.30 28,479,463.40 13,429,150.93 10,964,396.65 16,427,795.31
Less: Non-operating expenses /H1118/H1118/H1118/H1118 16,814,057.83 122,781,453.78 128,710,348.58 125,321,775.81 10,799,238.25
III. Profit before income tax /H1118/H1118/H1118/H1118/H1118/H1118/H1118 3,430,022,486.23 2,420,285,063.67 3,865,724,008.71 1,339,756,981.98 8,061,967,590.22
Less: Income tax expenses /H1118/H1118/H1118/H1118/H1118 –––––
IV . Net profit /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,430,022,486.23 2,420,285,063.67 3,865,724,008.71 1,339,756,981.98 8,061,967,590.22---------- ---------- ---------- ---------- ----------
(1) Net profit from continuing
operations /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,430,022,486.23 2,420,285,063.67 3,865,724,008.71 1,339,756,981.98 8,061,967,590.22
(2) Net profit from discontinued
operations /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118 –––––
V . Other comprehensive income, net of tax
1. Items that may be reclassified to
profit or loss
a. Cash flow hedge reserve /H1118/H1118 56,556,327.59 28,998,083.18 (28,859,280.00) (31,723,120.00) (2,238,800.00)----------
---------- ---------- ---------- ----------
VI. Total comprehensive income /H1118/H1118/H1118/H1118/H1118 3,486,578,813.82 2,449,283,146.85 3,836,864,728.71 1,308,033,861.98 8,059,728,790.22
The accompanying notes are integral part of the Historical Financial Information.
APPENDIX I ACCOUNTANTS’ REPORT
– I-11 –


--- page 490 ---
CONSOLIDATED CASH FLOW STATEMENT
(Expressed in Renminbi Yuan)
Y ear ended 31 December
Nine months ended
30 September
Note 2022 2023 2024 2024 2025
(unaudited)
I. Cash flows from operating
activities
Proceeds from sale of goods and
rendering of services /H1118/H1118/H1118/H1118/H1118/H1118 127,402,641,896.52 113,022,315,178.98 139,571,501,962.38 98,604,777,768.48 115,157,711,555.67
Refund of taxes /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118 182,265,457.08 13,927,483.36 – – –
Proceeds from other operating
activities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118IV .56(1) 4,235,274,201.81 5,844,758,135.52 7,339,201,723.10 7,437,841,544.70 4,735,625,492.61
Subtotal of cash inflows /H1118/H1118/H1118/H1118/H1118 131,820,181,555.41 118,881,000,797.86 146,910,703,685.48 106,042,619,313.18 119,893,337,048.28---------- ---------- ---------- ---------- ----------
Payment for goods and services /H1118/H1118 90,775,355,085.21 84,645,839,128.46 86,812,610,344.77 58,951,677,053.79 73,888,145,524.90
Payment to and for employees /H1118/H1118 14,831,553,703.23 16,791,267,576.95 18,221,803,375.20 13,241,402,396.05 14,248,313,551.33
Payment of various taxes /H1118/H1118/H1118/H1118/H1118 178,848,251.10 191,883,560.04 227,954,875.53 168,589,368.52 255,775,509.54
Payment for other operating
activities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118IV .56(1) 3,023,873,713.94 7,359,193,668.69 4,105,268,875.49 4,503,076,543.00 2,921,559,615.04
Subtotal of cash outflows /H1118/H1118/H1118/H1118/H1118 108,809,630,753.48 108,988,183,934.14 109,367,637,470.99 76,864,745,361.36 91,313,794,200.81---------- ---------- ---------- ---------- ----------
Net cash inflow from operating
activities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118IV .57(1) 23,010,550,801.93 9,892,816,863.72 37,543,066,214.49 29,177,873,951.82 28,579,542,847.47---------- ---------- ---------- ---------- ----------
II. Cash flows from investing
activities
Proceeds from disposal of
investments /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118305,000,000.00 2,759,378,000.00 20,033,700,000.00 6,987,700,000.00 8,439,999,000.00
Investment returns received /H1118/H1118/H1118/H1118 944,166.66 15,959,603.10 44,407,908.71 15,689,792.09 78,837,808.05
Net proceeds from disposal of
fixed assets, intangible assets
and other long-term assets /H1118/H1118/H1118 45,604,263.47 58,051,367.20 137,236,341.71 94,695,629.53 62,362,528.19
Subtotal of cash inflows /H1118/H1118/H1118/H1118/H1118 351,548,430.13 2,833,388,970.30 20,215,344,250.42 7,098,085,421.62 8,581,199,336.24---------- ---------- ---------- ---------- ----------
Payment for acquisition of fixed
assets, intangible assets and
other long-term assets /H1118/H1118/H1118/H1118/H1118 15,738,918,946.02 17,015,725,403.56 12,380,725,812.00 10,165,085,857.38 7,286,587,136.74
Payment for investments /H1118/H1118/H1118/H1118/H1118 541,350,000.00 3,036,478,000.00 21,067,200,000.00 9,591,500,000.00 9,793,929,000.00
Payment for other investing
activities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118 – – 13,586,560.00 9,959,920.00 –
Subtotal of cash outflows /H1118/H1118/H1118/H1118/H1118 16,280,268,946.02 20,052,203,403.56 33,461,512,372.00 19,766,545,777.38 17,080,516,136.74----------
---------- ---------- ---------- ----------
Net cash outflow from investing
activities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(15,928,720,515.89) (17,218,814,433.26) (13,246,168,121.58) (12,668,460,355.76) (8,499,316,800.50)---------- ---------- ---------- ---------- ----------
The accompanying notes are integral part of the Historical Financial Information.
APPENDIX I ACCOUNTANTS’ REPORT
– I-12 –


--- page 491 ---
Y ear ended 31 December
Nine months ended
30 September
Note 2022 2023 2024 2024 2025
(unaudited)
III. Cash flows from financing
activities
Proceeds from investors /H1118/H1118/H1118/H1118 9,723,671,057.39 1,068,549,389.76 1,020,000,000.00 – 1,053,327,078.64
Including:
Proceeds from
non-controlling
shareholders of
subsidiaries /H1118/H1118/H1118/H1118/H1118/H1118/H1118 1,770,000,000.00 1,030,000,000.00 1,020,000,000.00 – 4,900,000.00
Proceeds from borrowings /H1118/H1118/H1118 66,577,309,212.68 71,649,358,139.98 68,138,887,124.71 53,802,217,770.38 45,890,206,969.26
Proceeds from other
financing activities /H1118/H1118/H1118/H1118IV .56(2) – 84,621,525.91 2,467,653.89 1,300,620.89 4,180,000.00
Subtotal of cash inflows /H1118/H1118/H1118/H1118 76,300,980,270.07 72,802,529,055.65 69,161,354,778.60 53,803,518,391.27 46,947,714,047.90---------- ---------- ---------- ---------- ----------
Repayments of borrowings /H1118/H1118/H1118 64,250,484,381.65 53,366,146,816.45 73,608,496,028.66 59,135,225,691.21 52,921,389,518.98
Payment for dividends,
profit distributions or
interest /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184,190,777,891.87 7,747,123,200.88 8,255,880,276.03 3,171,920,405.46 4,963,784,283.57
Including:
Dividends and profits paid
to non-controlling
shareholders of
subsidiaries /H1118/H1118/H1118/H1118/H1118/H1118/H1118 357,000,000.00 1,184,973,346.05 1,185,033,794.32 1,185,033,794.32 209,575,064.56
Payment for other financing
activities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118IV .56(2) 5,439,143,613.28 8,490,290,696.11 12,525,691,999.56 6,037,020,937.74 4,718,801,597.27
Subtotal of cash outflows /H1118/H1118/H1118 73,880,405,886.80 69,603,560,713.44 94,390,068,304.25 68,344,167,034.41 62,603,975,399.82----------
---------- ---------- ---------- ----------
Net cash inflow/(outflow) from
financing activities /H1118/H1118/H1118/H1118 2,420,574,383.27 3,198,968,342.21 (25,228,713,525.65) (14,540,648,643.14) (15,656,261,351.92)---------- ---------- ---------- ---------- ----------
IV . Effect of foreign exchange rate
changes on cash and cash
equivalents /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118 629,416.72 (6,867,595.44) (25,855.07) (26,334.04) 219,797.70----------
---------- ---------- ---------- ----------
V . Net increase/(decrease) in cash
and cash equivalents /H1118/H1118/H1118/H1118/H1118/H1118IV .57(1) 9,503,034,086.03 (4,133,896,822.77) (931,841,287.81) 1,968,738,618.88 4,424,184,492.75
Add: Cash and cash equivalents
at the beginning of the
year/period /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118 8,407,255,637.63 17,910,289,723.66 13,776,392,900.89 13,776,392,900.89 12,844,551,613.08
VI. Cash and cash equivalents at the
end of the year/period /H1118/H1118/H1118/H1118/H1118IV .57(2) 17,910,289,723.66 13,776,392,900.89 12,844,551,613.08 15,745,131,519.77 17,268,736,105.83
The accompanying notes are integral part of the Historical Financial Information.
APPENDIX I ACCOUNTANTS’ REPORT
– I-13 –


--- page 492 ---
COMPANY CASH FLOW STATEMENT
(Expressed in Renminbi Yuan)
Y ear ended 31 December
Nine months ended
30 September
2022 2023 2024 2024 2025
(unaudited)
I. Cash flows from operating activities
Proceeds from sale of goods and rendering of services /H1118/H1118/H11188,338,312,697.79 9,865,328,032.72 4,120,295,594.68 3,040,054,127.16 2,960,999,042.22
Refund of taxes /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–––––
Proceeds from other operating activities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111848,458,916,665.12 28,353,686,820.31 28,131,944,958.60 33,460,650,129.90 34,206,793,128.24
Subtotal of cash inflows /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111856,797,229,362.91 38,219,014,853.03 32,252,240,553.28 36,500,704,257.06 37,167,792,170.46---------- ---------- ---------- ---------- ----------
Payment for goods and services /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111811,546,244,204.71 851,820,969.41 1,151,955,221.83 1,515,949,620.49 906,662,089.35
Payment to and for employees /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118553,188,039.99 837,044,625.72 717,503,120.91 535,076,314.92 557,931,271.17
Payment of various taxes /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111812,813,248.29 5,337,488.37 9,359,081.83 7,738,400.97 5,572,633.22
Payment for other operating activities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111824,915,832,859.32 37,378,428,727.77 10,416,381,495.58 17,744,274,475.00 35,547,965,144.46
Subtotal of cash outflows /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111837,028,078,352.31 39,072,631,811.27 12,295,198,920.15 19,803,038,811.38 37,018,131,138.20---------- ---------- ---------- ---------- ----------
Net cash inflow/(outflow) from operating activities /H1118/H1118/H1118/H1118/H111819,769,151,010.60 (853,616,958.24) 19,957,041,633.13 16,697,665,445.68 149,661,032.26---------- ---------- ---------- ---------- ----------
II. Cash flows from investing activities
Proceeds from disposal of investments /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 22,000,000.00 14,075,000,000.00 3,750,000,000.00 6,230,000,000.00
Investment returns received /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,198,797,788.27 7,451,874,575.69 6,471,877,084.48 2,454,960,149.06 9,229,445,103.73
Net proceeds from disposal of fixed assets, intangible assets
and other long-term assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,892,062.93 3,336,693.07 3,308,069.90 2,533,913.82 3,526,701.19
Subtotal of cash inflows /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,200,689,851.20 7,477,211,268.76 20,550,185,154.38 6,207,494,062.88 15,462,971,804.92---------- ---------- ---------- ---------- ----------
Payment for acquisition of fixed assets, intangible assets and
other long-term assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118227,044,660.73 380,623,616.58 142,855,385.55 126,269,560.99 417,242,841.70
Payment for investments /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111818,962,688,441.56 11,453,189,932.27 35,309,394,178.09 21,094,866,079.00 9,254,364,562.68
Subtotal of cash outflows /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111819,189,733,102.29 11,833,813,548.85 35,452,249,563.64 21,221,135,639.99 9,671,607,404.38---------- ---------- ---------- ---------- ----------
Net cash (outflow)/inflow from investing activities /H1118/H1118/H1118/H1118/H1118(17,989,043,251.09) (4,356,602,280.09) (14,902,064,409.26) (15,013,641,577.11) 5,791,364,400.54---------- ---------- ---------- ---------- ----------
III. Cash flows from financing activities
Proceeds from investors /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11187,953,671,057.39 38,549,389.76 – – 1,048,427,078.64
Proceeds from borrowings /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111837,388,832,000.00 38,753,560,720.26 36,659,154,733.33 30,091,741,400.00 30,055,830,650.00
Proceeds from other financing activities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118 – 51,200,191.71 – – –
Subtotal of cash inflows /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111845,342,503,057.39 38,843,310,301.73 36,659,154,733.33 30,091,741,400.00 31,104,257,728.64---------- ---------- ---------- ---------- ----------
Repayments of borrowings /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111838,423,404,770.85 25,461,172,887.87 35,835,367,131.20 30,258,371,970.56 24,460,115,363.27
Payment for dividends or interest /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,478,578,812.20 5,114,523,812.35 5,665,252,036.63 909,796,667.51 4,026,096,307.81
Payment for other financing activities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,674,802,639.69 2,189,522,747.61 1,221,637,466.78 175,361,642.32 2,135,325,131.61
Subtotal of cash outflows /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111843,576,786,222.74 32,765,219,447.83 42,722,256,634.61 31,343,530,280.39 30,621,536,802.69---------- ---------- ---------- ---------- ----------
Net cash inflow/(outflow) from financing activities /H1118/H1118/H1118/H1118/H11181,765,716,834.65 6,078,090,853.90 (6,063,101,901.28) (1,251,788,880.39) 482,720,925.95---------- ---------- ---------- ---------- ----------
IV . Effect of foreign exchange rate changes on cash and cash
equivalents /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111810.99 1,284.66 5,914.21 6,718.65 148.33---------- ---------- ---------- ---------- ----------
V . Net increase/(decrease) in cash and cash equivalents /H1118/H1118/H1118/H11183,545,824,605.15 867,872,900.23 (1,008,118,763.20) 432,241,706.83 6,423,746,507.08
Add: Cash and cash equivalents at the beginning of the
year/period /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,004,915,197.99 4,550,739,803.14 5,418,612,703.37 5,418,612,703.37 4,410,493,940.17
VI. Cash and cash equivalents at the end of the year/period /H1118/H11184,550,739,803.14 5,418,612,703.37 4,410,493,940.17 5,850,854,410.20 10,834,240,447.25
The accompanying notes are integral part of the Historical Financial Information.
APPENDIX I ACCOUNTANTS’ REPORT
– I-14 –


--- page 493 ---
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITY
(Expressed in Renminbi Yuan)
Note
Attributable to shareholders of the Company
Non-
controlling
interests TotalShare capital
Other equity instruments
Capital reserve
Less:
Treasury shares
Other
comprehensive
income Surplus reserve
Retained
earnings SubtotalPreference shares Others
I. As at 1 January 2022 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118 5,262,358,594.00 2,459,689,826.11 1,017,885,395.37 9,122,536,351.21 1,421,551,682.52 (53,809,160.77) 1,612,990,266.16 36,351,668,929.8 0 54,351,768,519.36 14,252,348,511.99 68,604,117,031.35
II. Changes in equity during the year
1. Total comprehensive income /H1118/H1118/H1118/H1118/H1118 –––– – 56,850,697.59 – 13,266,156,512.39 13,323,007,209.98 1,667,244,079.19 14,990,251,289.17
2. Shareholders’ contributions and decrease
of capital
(1) Contribution by ordinary
shareholders /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118 209,797,775.00 – – 7,598,600,924.57 662,871,249.07 – – – 7,145,527,450.50 724,433,947.59 7,869,961,398.09
(2) Contribution by holders of other
equity instruments /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118IV .31 127,500.00 (2,459,689,826.11) (649,197.71) (10,010,141.71) –––– (2,470,221,665.53) – (2,470,221,665.53)
(3) Equity-settled share-based payments /H1118 – – – 850,037,704.02 –––– 850,037,704.02 – 850,037,704.02
(4) Acquisition of non-controlling
interests /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118VI.2 – – – (71,899,701.01) –––– (71,899,701.01) – (71,899,701.01)
(5) A shareholder’s donation /H1118/H1118/H1118/H1118/H1118IV .37 – – – 86,888,084.29 –––– 86,888,084.29 – 86,888,084.29
(6) Modification of share-based payments IV .37 – – – 55,186,961.27 –––– 55,186,961.27 – 55,186,961.27
3. Appropriation of profits IV .41
(1) Appropriation for surplus reserve /H1118/H1118 –––– –– 343,002,248.62 (343,002,248.62) – – –
(2) Distributions to shareholders /H1118/H1118/H1118/H1118 –––– ––– (1,486,944,233.57) (1,486,944,233.57) (357,000,000.00) (1,843,944,233.57)
III. As at 31 December 2022 /H1118/H1118/H1118/H1118/H1118/H1118/H1118 5,472,283,869.00 – 1,017,236,197.66 17,631,340,182.64 2,084,422,931.59 3,041,536.82 1,955,992,514.78 47,787,878,960.00 71,783,350,329.3 1 16,287,026,538.77 88,070,376,868.08
The accompanying notes are integral part of the Historical Financial Information.
APPENDIX I ACCOUNTANTS’ REPORT
– I-15 –


--- page 494 ---
Note
Attributable to shareholders of the Company
Non-
controlling
interests TotalShare capital
Other equity
instruments Capital reserve
Less:
Treasury shares
Other
comprehensive
income Surplus reserve
Retained
earnings Subtotal
I. As at 1 January 2023 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185,472,283,869.00 1,017,236,197.66 17,631,340,182.64 2,084,422,931.59 3,041,536.82 1,955,992,514.78 47,787,878,960.00 71,783,350,329.31 16,287,026,538.77 88,070,376,868.08
II. Changes in equity during the year
1. Total comprehensive income /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118 –––– (7,754,722.57) – (4,263,280,820.31) (4,271,035,542.88) 95,411,837.47 (4,175,623,705.41)
2. Shareholders’ contributions and decrease of capital
(1) Contribution by ordinary shareholders /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118 (6,940,779.00) – (185,096,467.64) (1,265,545,775.16) – – – 1,073,508,528.52 1,030,000,000.00 2,103,508,528.52
(2) Contribution by holders of other equity instruments /H1118/H1118/H1118 IV .31 7,488.00 (37,752.34) 363,366.59 – – – – 333,102.25 – 333,102.25
(3) Equity-settled share-based payments /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118 – – 343,962,903.69 – – – – 343,962,903.69 – 343,962,903.69
(4) Repurchase of ordinary shares /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118IV .38 – – – 1,999,993,232.40 – – – (1,999,993,232.40) – (1,999,993,232.40)
(5) Acquisition of non-controlling interests /H1118/H1118/H1118/H1118/H1118/H1118/H1118VI.2 – – (137,571,137.03) – – – – (137,571,137.03) (5,018,860,825.06) (5,156,431,962.09)
(6) Modification of share-based payments /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118IV .37 – – 38,549,389.76 – – – – 38,549,389.76 – 38,549,389.76
3. Appropriation of profits IV .41
(1) Appropriation for surplus reserve /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118 –––– – 242,028,506.37 (242,028,506.37) – – –
(2) Distributions to shareholders /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118 –––– –– (4,003,052,968.12) (4,003,052,968.12) (1,184,973,346.05) (5,188,026,314.17)
III. As at 31 December 2023 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185,465,350,578.00 1,017,198,445.32 17,691,548,238.01 2,818,870,388.83 (4,713,185.75) 2,198,021,021.15 39,279,516,665.20 62,828,051,373. 10 11,208,604,205.13 74,036,655,578.23
The accompanying notes are integral part of the Historical Financial Information.
APPENDIX I ACCOUNTANTS’ REPORT
– I-16 –


--- page 495 ---
Note
Attributable to shareholders of the Company
Non-
controlling
interests TotalShare capital
Other equity
instruments Capital reserve
Less:
Treasury shares
Other
comprehensive
income Surplus reserve
Retained
earnings Subtotal
I. As at 1 January 2024 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185,465,350,578.00 1,017,198,445.32 17,691,548,238.01 2,818,870,388.83 (4,713,185.75) 2,198,021,021.15 39,279,516,665.20 62,828,051,373. 10 11,208,604,205.13 74,036,655,578.23
II. Changes in equity during the year
1. Total comprehensive income /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118 –––– (28,863,380.00) – 17,881,260,485.27 17,852,397,105.27 1,043,784,418.98 18,896,181,524.25
2. Shareholders’ contributions and decrease of capital
(1) Contribution by ordinary shareholders /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118 (2,590,619.00) – (75,475,760.98) (818,877,156.43) – – – 740,810,776.45 1,020,000,000.00 1,760,810,776.45
(2) Contribution by holders of other equity instruments /H1118/H1118/H1118 IV .31 7,802.00 (38,519.75) 386,681.88 –––– 355,964.13 – 355,964.13
(3) Equity-settled share-based payments /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118 – – 35,645,926.90 –––– 35,645,926.90 – 35,645,926.90
(4) Repurchase of ordinary shares /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118IV .38 – – – 1,000,001,904.21 – – – (1,000,001,904.21) – (1,000,001,904.21)
(5) Acquisition of non-controlling interests /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118VI.2 – – (3,950,561,360.67) –––– (3,950,561,360.67) (6,556,841,199.93) (10,507,402,560.60)
(6) Modification of share-based payments /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118IV .37 – – 27,887,943.99 –––– 27,887,943.99 – 27,887,943.99
3. Appropriation of profits IV .41
(1) Appropriation for surplus reserve /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118 ––––– 386,572,400.87 (386,572,400.87) – – –
(2) Distributions to shareholders /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118 –––––– (4,502,807,967.95) (4,502,807,967.95) (1,211,096,165.04) (5,713,904,132.99)
III. As at 31 December 2024 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185,462,767,761.00 1,017,159,925.57 13,729,431,669.13 2,999,995,136.61 (33,576,565.75) 2,584,593,422.02 52,271,396,781.65 72,031,777,857 .01 5,504,451,259.14 77,536,229,116.15
The accompanying notes are integral part of the Historical Financial Information.
APPENDIX I ACCOUNTANTS’ REPORT
– I-17 –


--- page 496 ---
Note
Attributable to shareholders of the Company
Non-
controlling
interests TotalShare capital
Other equity
instruments Capital reserve
Less:
Treasury shares
Other
comprehensive
income Surplus reserve
Retained
earnings Subtotal
I. As at 1 January 2025 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185,462,767,761.00 1,017,159,925.57 13,729,431,669.13 2,999,995,136.61 (33,576,565.75) 2,584,593,422.02 52,271,396,781.65 72,031,777,857 .01 5,504,451,259.14 77,536,229,116.15
II. Changes in equity during the period
1. Total comprehensive income /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118 –––– (20,147,968.62) – 14,778,904,957.09 14,758,756,988.47 333,218,262.71 15,091,975,251.18
2. Shareholders’ contributions and decrease of capital
(1) Contribution by ordinary shareholders /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118 – – (951,936,890.98) (951,566,153.76) – – – (370,737.22) 4,900,000.00 4,529,262.78
(2) Contribution by holders of other equity instruments /H1118/H1118/H1118 IV .31 3,268.00 (16,797.76) 166,324.60 – – – – 152,794.84 – 152,794.84
(3) Equity-settled share-based payments /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118 – – 71,656,569.35 – – – – 71,656,569.35 – 71,656,569.35
(4) Repurchase of ordinary shares /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118IV .38 – – – 2,001,488,652.73 – – – (2,001,488,652.73) – (2,001,488,652.73)
(5) Acquisition of non-controlling interests /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118VI.2 – – 89,570,422.19 – – – – 89,570,422.19 (2,089,570,422.19) (2,000,000,000.00)
(6) Modification of share-based payments /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118IV .37 – – 7,558,562.20 – – – – 7,558,562.20 – 7,558,562.20
3. Appropriation of profits /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118IV .41
(1) Appropriation for surplus reserve /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118 –––– ––––––
(2) Distributions to shareholders /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118 –––– –– (8,087,283,056.70) (8,087,283,056.70) (183,512,693.84) (8,270,795,750.54)
III. As at 30 September 2025 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185,462,771,029.00 1,017,143,127.81 12,946,446,656.49 4,049,917,635.58 (53,724,534.37) 2,584,593,422.02 58,963,018,682.04 76,870,330,747 .41 3,569,486,405.82 80,439,817,153.23
The accompanying notes are integral part of the Historical Financial Information.
APPENDIX I ACCOUNTANTS’ REPORT
– I-18 –


--- page 497 ---
Note
Attributable to shareholders of the Company
Non-
controlling
interests TotalShare capital
Other equity
instruments Capital reserve
Less:
Treasury shares
Other
comprehensive
income Surplus reserve
Retained
earnings Subtotal
(unaudited)
I. As at 1 January 2024 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185,465,350,578.00 1,017,198,445.32 17,691,548,238.01 2,818,870,388.83 (4,713,185.75) 2,198,021,021.15 39,279,516,665.20 62,828,051,373. 10 11,208,604,205.13 74,036,655,578.23
II. Changes in equity during the period
1. Total comprehensive income /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118 –––– (31,828,670.00) – 10,481,068,452.78 10,449,239,782.78 764,583,205.38 11,213,822,988.16
2. Shareholders’ contributions and decrease of capital
(1) Contribution by ordinary shareholders /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118 – – – (740,810,776.45) – – – 740,810,776.45 – 740,810,776.45
(2) Contribution by holders of other equity instruments /H1118/H1118/H1118 IV .31 2,583.00 (12,854.12) 127,943.73 – – – – 117,672.61 – 117,672.61
(3) Equity-settled share-based payments /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118 – – 35,645,926.90 – – – – 35,645,926.90 – 35,645,926.90
(4) Acquisition of non-controlling interests /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118 – – (1,822,922,804.32) – – – – (1,822,922,804.32) (3,441,029,756.28) (5,263,952,560.60)
(5) Modification of share-based payments /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118IV .37 – – 21,692,783.99 – – – – 21,692,783.99 – 21,692,783.99
3. Appropriation of profits /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118IV .41
(1) Appropriation for surplus reserve /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118 –––– ––––––
(2) Distributions to shareholders /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118 –––– –– 2,109,218.44 2,109,218.44 (1,185,033,794.32) (1,182,924,575.88)
III. As at 30 September 2024 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185,465,353,161.00 1,017,185,591.20 15,926,092,088.31 2,078,059,612.38 (36,541,855.75) 2,198,021,021.15 49,762,694,336.42 72,254,744,729 .95 7,347,123,859.91 79,601,868,589.86
The accompanying notes are integral part of the Historical Financial Information.
APPENDIX I ACCOUNTANTS’ REPORT
– I-19 –


--- page 498 ---
COMPANY STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITY
(Expressed in Renminbi Yuan)
Share capital
Other equity instruments
Capital reserve
Less:
Treasury shares
Other
comprehensive
income Surplus reserve Retained earnings TotalPreference shares Others
I. As at 1 January 2022 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185,262,358,594.00 2,459,689,826.11 1,017,885,395.37 9,124,713,172.80 1,421,551,682.52 (53,831,290.77) 1,612,990,266.16 4,957,766,072.34 22,960,020,353.49
II. Changes in equity during the year
1. Total comprehensive income /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–––– – 56,556,327.59 – 3,430,022,486.23 3,486,578,813.82
2. Shareholders’ contributions and decrease of capital
(1) Contribution by ordinary shareholders /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118209,797,775.00 – – 7,598,600,924.57 662,871,249.07 – – – 7,145,527,450.50
(2) Contribution by holders of other equity instruments /H1118/H1118/H1118/H1118/H1118/H1118 127,500.00 (2,459,689,826.11) (649,197.71) (10,010,141.71) – – – – (2,470,221,665.53)
(3) Equity-settled share-based payments /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – 850,037,704.02 – – – – 850,037,704.02
(4) A shareholder’s donation /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – 86,888,084.29 – – – – 86,888,084.29
(5) Modification of share-based payments /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118 – – – 55,186,961.27 – – – – 55,186,961.27
3. Appropriation of profits
(1) Appropriation for surplus reserve /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–––– –– 343,002,248.62 (343,002,248.62) –
(2) Distributions to shareholders /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–––– ––– (1,486,944,233.57) (1,486,944,233.57)
III. As at 31 December 2022 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185,472,283,869.00 – 1,017,236,197.66 17,705,416,705.24 2,084,422,931.59 2,725,036.82 1,955,992,514.78 6,557,842,076.38 30,627,073,468.29
The accompanying notes are integral part of the Historical Financial Information.
APPENDIX I ACCOUNTANTS’ REPORT
– I-20 –


--- page 499 ---
Share capital
Other equity
instruments Capital reserve
Less:
Treasury shares
Other
comprehensive
income Surplus reserve Retained earnings Total
I. As at 1 January 2023 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185,472,283,869.00 1,017,236,197.66 17,705,416,705.24 2,084,422,931.59 2,725,036.82 1,955,992,514.78 6,557,842,076.38 30,627,073,468.29
II. Changes in equity during the year
1. Total comprehensive income /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–––– 28,998,083.18 – 2,420,285,063.67 2,449,283,146.85
2. Shareholders’ contributions and decrease of capital
(1) Contribution by ordinary shareholders /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(6,940,779.00) – (185,096,467.64) (1,265,545,775.16) – – – 1,073,508,528.52
(2) Contribution by holders of other equity instruments /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118 7,488.00 (37,752.34) 363,366.59 –––– 333,102.25
(3) Equity-settled share-based payments /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 343,962,903.69 –––– 343,962,903.69
(4) Repurchase of ordinary shares /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – 1,999,993,232.40 – – – (1,999,993,232.40)
(5) Modification of share-based payments /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 38,549,389.76 –––– 38,549,389.76
3. Appropriation of profits
(1) Appropriation for surplus reserve /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118––––– 242,028,506.37 (242,028,506.37) –
(2) Distributions to shareholders /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–––––– (4,003,052,968.12) (4,003,052,968.12)
III. As at 31 December 2023 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185,465,350,578.00 1,017,198,445.32 17,903,195,897.64 2,818,870,388.83 31,723,120.00 2,198,021,021.15 4,733,045,665.56 28,529,664,338.84
The accompanying notes are integral part of the Historical Financial Information.
APPENDIX I ACCOUNTANTS’ REPORT
– I-21 –


--- page 500 ---
Share capital
Other equity
instruments Capital reserve
Less:
Treasury shares
Other
comprehensive
income Surplus reserve Retained earnings Total
I. As at 1 January 2024 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185,465,350,578.00 1,017,198,445.32 17,903,195,897.64 2,818,870,388.83 31,723,120.00 2,198,021,021.15 4,733,045,665.56 28,529,664,338.84
II. Changes in equity during the year
1. Total comprehensive income /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118———— (28,859,280.00) — 3,865,724,008.71 3,836,864,728.71
2. Shareholders’ contributions and decrease of capital
(1) Contribution by ordinary shareholders /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(2,590,619.00) — (75,475,760.98) (818,877,156.43) — — — 740,810,776.45
(2) Contribution by holders of other equity instruments /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118 7,802.00 (38,519.75) 386,681.88 ———— 355,964.13
(3) Equity-settled share-based payments /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118— — 35,645,926.90 ———— 35,645,926.90
(4) Repurchase of ordinary shares /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118— — — 1,000,001,904.21 — — — (1,000,001,904.21)
(5) Modification of share-based payments /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118— — 27,887,943.99 ———— 27,887,943.99
3. Appropriation of profits
(1) Appropriation for surplus reserve /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118————— 386,572,400.87 (386,572,400.87) —
(2) Distributions to shareholders /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118—————— (4,502,807,967.95) (4,502,807,967.95)
III. As at 31 December 2024 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185,462,767,761.00 1,017,159,925.57 17,891,640,689.43 2,999,995,136.61 2,863,840.00 2,584,593,422.02 3,709,389,305.45 27,668,419,806.86
The accompanying notes are integral part of the Historical Financial Information.
APPENDIX I ACCOUNTANTS’ REPORT
– I-22 –


--- page 501 ---
Share capital
Other equity
instruments Capital reserve
Less: Treasury
shares
Other
comprehensive
income Surplus reserve Retained earnings Total
I. As at 1 January 2025 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185,462,767,761.00 1,017,159,925.57 17,891,640,689.43 2,999,995,136.61 2,863,840.00 2,584,593,422.02 3,709,389,305.45 27,668,419,806.86
II. Changes in equity during the period
1. Total comprehensive income /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–––– (2,238,800.00) – 8,061,967,590.22 8,059,728,790.22
2. Shareholders’ contributions and decrease of capital
(1) Contribution by ordinary shareholders /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – (951,936,890.98) (951,566,153.76) – – – (370,737.22)
(2) Contribution by holders of other equity instruments /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118 3,268.00 (16,797.76) 166,324.60 –––– 152,794.84
(3) Equity-settled share-based payments /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 71,656,569.35 –––– 71,656,569.35
(4) Repurchase of ordinary shares /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – 2,001,488,652.73 – – – (2,001,488,652.73)
(5) Modification of share-based payments /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 7,558,562.20 –––– 7,558,562.20
3. Appropriation of profits
(1) Appropriation for surplus reserve /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118––––––––
(2) Distributions to shareholders /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–––––– (8,087,283,056.70) (8,087,283,056.70)
III. As at 30 September 2025 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185,462,771,029.00 1,017,143,127.81 17,019,085,254.60 4,049,917,635.58 625,040.00 2,584,593,422.02 3,684,073,838.97 25,718,374,076.82
The accompanying notes are integral part of the Historical Financial Information.
APPENDIX I ACCOUNTANTS’ REPORT
– I-23 –


--- page 502 ---
Share capital
Other equity
instruments Capital reserve
Less: Treasury
shares
Other
comprehensive
income Surplus reserve Retained earnings Total
(unaudited)
I. As at 1 January 2024 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185,465,350,578.00 1,017,198,445.32 17,903,195,897.64 2,818,870,388.83 31,723,120.00 2,198,021,021.15 4,733,045,665.56 28,529,664,338.84
II. Changes in equity during the period
1. Total comprehensive income /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–––– (31,723,120.00) – 1,339,756,981.98 1,308,033,861.98
2. Shareholders’ contributions and decrease of capital
(1) Contribution by ordinary shareholders /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – (740,810,776.45) – – – 740,810,776.45
(2) Contribution by holders of other equity instruments /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118 2,583.00 (12,854.12) 127,943.73 –––– 1 17,672.61
(3) Equity-settled share-based payments /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 35,645,926.90 –––– 35,645,926.90
(4) Modification of share-based payments /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 21,692,783.99 –––– 21,692,783.99
3. Appropriation of profits
(1) Appropriation for surplus reserve /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118––––––––
(2) Distributions to shareholders /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–––––– 2,109,218.44 2,109,218.44
III. As at 30 September 2024 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185,465,353,161.00 1,017,185,591.20 17,960,662,552.26 2,078,059,612.38 – 2,198,021,021.15 6,074,911,865.98 30,638,074,579.21
The accompanying notes are integral part of the Historical Financial Information.
APPENDIX I ACCOUNTANTS’ REPORT
– I-24 –


--- page 503 ---
NOTES TO THE HISTORICAL FINANCIAL INFORMATION
(Expressed in Renminbi (“RMB”) Yuan unless otherwise indicated)
I. BASIS OF PREPARATION AND PRESENTATION OF THE HISTORICAL FINANCIAL
INFORMATION
ʮ̡ (Muyuan Foods Co., Ltd.) (the “Company”) was established in Nanyang City, Henan
Province, the People’s Republic of China (the “PRC”) on 13 July 2000 as a limited liability company under the PRC
Company Law, with its head office located at Nanyang City, Henan Province. The Company was previously known
asʮ̡ (Henan Province Neixiang County Muyuan Breeding Co., Ltd.) before it was
converted into a joint stock limited liability company on 28 December 2009. On 28 January 2014, the Company’s A
Shares were listed on Shenzhen Stock Exchange.
The Company and its subsidiaries (“the Group”) are principally engaged in: (i) sale of piglets, finished hogs
and breeding hogs, (ii) sale of hog carcasses, pork cuts and by-products. Please refer to Note VI.1 for relevant
information of principal subsidiaries of the Group.
The Company’s statutory financial statements for the year ended 31 December 2022 were audited by ʕጳശ
ה( ౷ஷΥྫ) (Zhongxinghua Certified Public Accountants LLP). The Company’s statutory financial
statements for the years ended 31 December 2023 and 2024 were audited byה( ౷ஷΥ
ྫ) (KPMG Huazhen LLP).
As at 30 September 2025, the Group had net current liabilities of RMB16.2 billion. The liquidity of the Group
is primarily dependent on its ability to maintain adequate cash inflows from operations and sufficient financing to
meet its financial obligations as and when they fall due. The directors of the Company have reviewed the Group’s
cash flow projections and are of the opinion that considering the Group’s sources of liquidity and the unutilized bank
facilities, the Group will have sufficient financial resources to satisfy its future working capital requirements and
meet its financial obligations as and when they fall due for at least twelve months from 30 September 2025.
Accordingly, the directors of the Company consider it appropriate to prepare the Historical Financial Information on
a going concern basis.
The Historical Financial Information has been prepared in accordance with the requirements of all applicable
China Accounting Standards for Business Enterprises (“CASBE”), which are also referred to as China Accounting
Standards, issued by the Ministry of Finance (“MOF”) of the PRC. Further details of the material accounting policy
information are set out in Note II.
MOF has issued a number of new and revised CASBEs. For the purpose of preparing the Historical Financial
Information, the Group has adopted all applicable new and revised CASBEs to the Track Record Period, except for
any new standards or interpretations that are not yet effective for the accounting period beginning 1 January 2025.
The Historical Financial Information also complies with the disclosure requirements of “Regulation on the
Preparation of Information Disclosures by Companies Issuing Securities, No. 15: General Requirements for Financial
Reports” as revised by the China Securities Regulatory Commission (“CSRC”) in 2023 and the applicable disclosure
provisions of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited.
The accounting policies set out below have been applied consistently to all periods presented in the Historical
Financial Information.
The Stub Period Corresponding Financial Information has been prepared in accordance with the same basis of
preparation and presentation adopted in respect of the Historical Financial Information.
The Historical Financial Information and the Stub Period Corresponding Financial Information are presented
in RMB Y uan except when otherwise indicated.
APPENDIX I ACCOUNTANTS’ REPORT
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II. MATERIAL ACCOUNTING POLICY INFORMATION AND ACCOUNTING ESTIMATES
1 Accounting period
The Group has adopted the calendar year as its accounting year, i.e. from 1 January to 31 December.
2 Operating cycle
The operating cycle of the Group is usually less than 12 months and 12 months is used to classify the liquidity
of assets and liabilities.
3 Functional currency
The Company’s functional currency is RMB, and its financial statements are presented in RMB. The functional
currency is determined by the Company and its subsidiaries on the basis of the currency in which major income and
costs are denominated and settled.
4 Method used to determine the materiality threshold and the basis for selection
Item Materiality threshold
Material construction in
progress /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
The period-end amount of construction in progress is greater than 0.05% of the
latest audited consolidated total assets.
Material associates /H1118/H1118/H1118The period-end amount of long-term equity investments is greater than 0.05% of
the latest audited consolidated total assets.
Material non-wholly-
owned subsidiaries /H1118/H1118
The period-end amount of non-controlling interests is greater than 10% of the
latest audited consolidated non-controlling interests.
5 Accounting treatments for business combinations involving entities under common control and not
under common control
A transaction or event constitutes a business combination when the Group obtains control of one or more
entities (or a group of assets or net assets) which meet the definition of a business. Business combinations are
classified as either business combinations involving entities under common control or business combinations not
involving entities under common control.
For a transaction not involving entities under common control, the acquirer determines whether an acquired
set of assets constitutes a business. The Group may elect to apply the simplified assessment method, the concentration
test, to determine whether an acquired set of assets is a business. If the concentration test is met, the set of assets
is determined not to be a business, no further assessment is needed. If the concentration test is not met, the Group
should perform the assessment according to the guidance on the determination of a business.
When the set of assets the Group acquired does not constitute a business, acquisition costs should be allocated
to each identifiable asset and liability on the basis of their relative fair values at the date of acquisition. The
accounting treatments for business combinations described below are not applied.
(1) Business combinations involving entities under common control
A business combination involving entities under common control is a business combination in which all of the
combining entities are ultimately controlled by the same party or parties both before and after the business
combination, and that control is not transitory. The assets acquired and liabilities assumed are measured based on
their carrying amounts in the consolidated financial statements of the ultimate controlling party at the combination
date. The difference between the share of carrying amount of the net assets acquired and the consideration paid for
the combination (or the total par value of shares issued) is adjusted against share premium in the capital reserve, with
any excess deducted from surplus reserve and retained earnings sequentially. Any costs directly attributable to the
combination are recognised in profit or loss when incurred. The combination date is the date on which one combining
entity obtains control of other combining entities.
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(2) Business combinations involving entities not under common control
A business combination involving entities not under common control is a business combination in which all
of the combining entities are not ultimately controlled by the same party or parties both before and after the business
combination. Where (1) the aggregate of the acquisition-date fair value of assets transferred (including the acquirer’s
previously-held equity interest in the acquiree), liabilities incurred or assumed, and equity securities issued by the
acquirer, in exchange for control of the acquiree, exceeds (2) the acquirer’s interest in the acquisition-date fair value
of the acquiree’s identifiable net assets, the difference is recognised as goodwill after taking into account deferred
tax impact. If (1) is less than (2), the difference is recognised in profit or loss for the current period. The costs of
issuing equity or debt securities as a part of the consideration for the acquisition are included in the carrying amounts
of these equity or debt securities upon initial recognition. Other acquisition-related costs are expensed when incurred.
Any difference between the fair value and the carrying amount of the assets transferred as consideration is recognised
in profit or loss. The acquiree’s identifiable assets, liabilities and contingent liabilities, if the recognition criteria are
met, are recognised by the Group at their acquisition-date fair values. The acquisition date is the date on which the
acquirer obtains control of the acquiree.
6 Criteria of control and preparation of consolidated financial statements
(1) General principles
The scope of consolidated financial statements is based on control, and the consolidated financial statements
comprise the Company and its subsidiaries. Control exists when the investor has all of the following: power over the
investee; exposure, or rights, to variable returns from its involvement with the investee; and the ability to affect those
returns through its power over the investee. The financial position, financial performance and cash flows of
subsidiaries are included in the consolidated financial statements from the date that control commences until the date
that control ceases.
Intra-group balances and transactions, and any unrealised profit or loss arising from intra-group transactions,
are eliminated when preparing the consolidated financial statements. Unrealised losses resulting from intra-group
transactions are eliminated in the same way as unrealised gains, unless they represent impairment losses that are
recognised in full in the financial statements.
(2) Subsidiaries acquired through a business combination
Where a subsidiary is acquired during the reporting period through a business combination involving entities
under common control, the financial statements of the subsidiary are included in the consolidated financial statements
based on the carrying amounts of the assets and liabilities of the subsidiary in the financial statements of the ultimate
controlling party as if the combination had occurred at the date that the ultimate controlling party first obtained
control. The opening balances and the comparative figures of the consolidated financial statements are also restated.
Where a subsidiary is acquired during the reporting period through a business combination involving entities
not under common control, the identifiable assets and liabilities of the acquired subsidiaries are included in the scope
of consolidation from the date that control commences, based on the fair values of those identifiable assets and
liabilities at the acquisition date.
(3) Disposal of subsidiaries
When the Group loses control over a subsidiary, any resulting disposal gains or losses are recognised as
investment income for the current period. The remaining equity investment is re-measured at its fair value at the date
when control is lost, and any resulting gains or losses are also recognised as investment income or loss for the current
period.
(4) Changes in non-controlling interests
Where the Company acquires more interest in a subsidiary from the subsidiary’s non-controlling shareholders
or disposes of a portion of an interest in a subsidiary without losing control, the difference between the portion of
the interest in the subsidiary’s net assets being acquired or disposed of and the amount of the consideration paid or
received is adjusted to the capital reserve (share premium) in the consolidated balance sheet, with any excess
deducted from surplus reserve and retained earnings sequentially.
APPENDIX I ACCOUNTANTS’ REPORT
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7 Cash and cash equivalents
Cash and cash equivalents comprise cash on hand, deposits that can be readily withdrawn on demand, and
short-term, highly liquid investments that are readily convertible into known amounts of cash and are subject to an
insignificant risk of change in value.
8 Foreign currency transactions and translation of foreign currency financial statements
When the Group receives capital in foreign currencies from investors, the capital is translated to RMB at the
spot exchange rate at the date of receipt. Other foreign currency transactions are, on initial recognition, translated
to RMB at the spot exchange rates on the dates of the transactions.
Monetary items denominated in foreign currencies are translated to RMB at the spot exchange rate at the
balance sheet date. The resulting exchange differences are generally recognised in profit or loss, unless they arise
from the re-translation of the principal and interest of specific borrowings for the acquisition, construction or
production of qualifying asset. Non-monetary items that are measured at historical cost in foreign currencies are
translated to RMB using the exchange rate at the transaction date.
In translating the financial statements of a foreign operation, assets and liabilities of foreign operation are
translated to RMB at the spot exchange rate at the balance sheet date. Equity items, excluding retained earnings and
the translation differences in other comprehensive income, are translated to RMB at the spot exchange rates at the
transaction dates. Income and expenses of foreign operation are translated to RMB at the spot exchange rates at the
transaction dates. The resulting translation differences are recognised in other comprehensive income. The translation
differences accumulated in other comprehensive income with respect to a foreign operation are transferred to profit
or loss in the period when the foreign operation is disposed of.
9 Financial instruments
Financial instruments include cash at bank and on hand, investments in equity securities other than those
classified as long-term equity investments, receivables, payables, loans and borrowings, debentures payable and
share capital.
(1) Recognition and initial measurement of financial assets and financial liabilities
A financial asset or financial liability is recognised in the balance sheet when the Group becomes a party to
the contractual provisions of a financial instrument.
A financial asset or financial liability is measured initially at fair value. For financial assets and financial
liabilities measured at fair value through profit or loss, any related directly attributable transaction costs are charged
to profit or loss; for other categories of financial assets and financial liabilities, any related directly attributable
transaction costs are included in their initial costs. Accounts receivable that do not have a significant financing
component or do not account for the significant financing component in one-year-or-less contracts under the practical
expedient are initially measured at the transaction price in accordance with Note II.22.
(2) Classification and subsequent measurement of financial assets
(a) Classification of financial assets
The classification of financial assets is generally based on the business model under which a financial asset
is managed and its contractual cash flow characteristics. On initial recognition, a financial asset is classified as
measured at amortised cost, at fair value through other comprehensive income (“FVOCI”), or at fair value through
profit or loss (“FVTPL”).
Financial assets are not reclassified subsequent to their initial recognition unless the Group changes its
business model for managing financial assets, in which case all affected financial assets are reclassified on the first
day of the first reporting period following the change in the business model.
APPENDIX I ACCOUNTANTS’ REPORT
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A financial asset is measured at amortised cost if it meets both of the following conditions and is not designated
as at FVTPL:
– it is held under a business model whose objective is to hold assets to collect contractual cash flows; and
– its contractual terms give rise on specified dates to cash flows that are solely payments of principal and
interest on the principal amount outstanding.
A financial asset is measured at FVOCI if it meets both of the following conditions and is not designated as
at FVTPL:
– it is held under a business model whose objective is achieved by both collecting contractual cash flows
and selling financial assets; and
– its contractual terms give rise on specified dates to cash flows that are solely payments of principal and
interest on the principal amount outstanding.
On initial recognition of an equity investment that is not held for trading, the Group may irrevocably elect to
present subsequent changes in the investment’s fair value in other comprehensive income. This election is made on
an investment-by-investment basis, and the instrument meets the definition of equity from the perspective of the
issuer.
All financial assets not classified as measured at amortised cost or FVOCI as described above are measured
at FVTPL. On initial recognition, the Group may irrevocably designate a financial asset that otherwise meets the
requirements to be measured at amortised cost or at FVOCI as at FVTPL if doing so eliminates or significantly
reduces an accounting mismatch that would otherwise arise.
The business model refers to how the Group manages its financial assets in order to generate cash flows. That
is, the Group’s business model determines whether cash flows will result from collecting contractual cash flows,
selling financial assets or both. The Group determines the business model for managing the financial assets according
to the facts and based on the specific business objective for managing the financial assets determined by the Group’s
key management personnel.
In assessing whether the contractual cash flows are solely payments of principal and interest, the Group
considers the contractual terms of the instrument. For the purposes of this assessment, ‘principal’ is defined as the
fair value of the financial asset on initial recognition. ‘Interest’ is defined as consideration for the time value of
money and for the credit risk associated with the principal amount outstanding during a particular period of time and
for other basic lending risks and costs, as well as a profit margin. The Group also assesses whether the financial asset
contains a contractual term that could change the timing or amount of contractual cash flows such that it would not
meet this condition.
(b) Subsequent measurement of financial assets
– Financial assets at FVTPL
These financial assets are subsequently measured at fair value. Net gains and losses, including any interest or
dividend income, are recognised in profit or loss unless the financial assets are part of a hedging relationship.
– Financial assets at amortised cost
These assets are subsequently measured at amortised cost using the effective interest method. A gain or loss
on a financial asset that is measured at amortised cost and that is not part of a hedging relationship should be
recognised in profit or loss when the financial asset is derecognised, amortised under the effective interest method
or when an impairment gain or loss is recognised.
– Equity investments at FVOCI
These assets are subsequently measured at fair value. Dividends are recognised as income in profit or loss.
Other net gains and losses are recognised in other comprehensive income. On derecognition, gains and losses
accumulated in other comprehensive income are reclassified to retained earnings.
APPENDIX I ACCOUNTANTS’ REPORT
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--- page 508 ---
(3) Classification and subsequent measurement of financial liabilities
Financial liabilities are classified as measured at FVTPL or as financial liabilities measured at amortised cost.
– Financial liabilities at FVTPL
A financial liability is classified as at FVTPL if it is classified as held-for-trading (including derivative
financial liabilities) or if it is designated as such on initial recognition.
Financial liabilities at FVTPL are subsequently measured at fair value; and net gains and losses, are recognised
in profit or loss, unless the financial liabilities are part of a hedging relationship.
– Financial liabilities at amortised cost
These financial liabilities are subsequently measured at amortised cost using the effective interest method.
(4) Offsetting
Financial assets and financial liabilities are generally presented separately in the balance sheet, and are not
offset. However, a financial asset and a financial liability are offset and the net amount is presented in the balance
sheet when both of the following conditions are satisfied:
– The Group currently has a legally enforceable right to set off the recognised amounts;
– The Group intends either to settle on a net basis, or to realise the financial asset and settle the financial
liability simultaneously.
(5) Derecognition of financial assets and financial liabilities
A financial asset is derecognised when one of the following conditions is met:
– the Group’s contractual rights to the cash flows from the financial asset expire;
– the financial asset has been transferred and the Group transfers substantially all of the risks and rewards
of ownership of the financial asset; or
– the financial asset has been transferred; and although the Group neither transfers nor retains
substantially all of the risks and rewards of ownership of the financial asset, it does not retain control
over the transferred asset.
Where a transfer of a financial asset in its entirety meets the criteria for derecognition, the difference between
the two amounts below is recognised in profit or loss:
– the carrying amount of the financial asset transferred measured at the date of derecognition;
– the consideration received from the transfer.
The Group derecognises a financial liability (or part of it) only when its contractual obligation (or part of it)
is extinguished.
(6) Impairment
The Group recognises loss allowances for expected credit loss (ECL) on financial assets measured at amortised
cost.
The Group does not use ECL model on financial assets measured at fair value, including equity investments
at FVOCI and derivative financial assets.
APPENDIX I ACCOUNTANTS’ REPORT
– I-30 –


--- page 509 ---
Measurement of ECLs
ECLs are a probability-weighted estimate of credit losses. Credit losses are measured as the present
value of all cash shortfalls (i.e. the difference between the cash flows due to the Group in accordance with the
contract and the cash flows that the Group expects to receive).
The maximum period considered when estimating ECLs is the maximum contractual period (including
extension options) over which the Group is exposed to credit risk.
Lifetime ECLs are the ECLs that result from all possible default events over the expected life of a
financial instrument.
12-month ECLs are the portion of ECLs that result from default events that are possible within the 12
months after the balance sheet date (or a shorter period if the expected life of the instrument is less than 12
months).
Loss allowances for bills receivable and accounts receivable arising from ordinary business activities
such as sale of goods and provision of services are always measured at an amount equal to lifetime ECLs. ECLs
on these financial assets are estimated using a provision matrix based on the Group’s historical credit loss
experience, adjusted for factors that are specific to the debtors and an assessment of both the current and
forecast general economic conditions at the balance sheet date.
Except for bills receivable and accounts receivable, the Group measures loss allowances at an amount
equal to 12-month ECLs for the following financial instruments, and at an amount equal to lifetime ECLs for
all other financial instruments:
– Financial instruments that have been determined to have low credit risk at the balance sheet date;
– Financial instruments for which credit risk has not increased significantly since initial
recognition.
Provisions for bad and doubtful debts arising from receivables
(a) Categories of groups for collective assessment based on credit risk characteristics and basis for
determination
Bills receivable /H1118/H1118/H1118/H1118/H1118/H1118/H1118Based on the different credit risk characteristics of acceptors, the Group
classifies bills receivable into two groups: bank acceptance bills and
commercial acceptance bills.
Accounts receivable /H1118/H1118/H1118/H1118/H1118Based on the credit risk characteristics of different counterparties, the
Group classifies accounts receivable into two groups: accounts
receivable due from related parties within the consolidation scope and
accounts receivable due from other customers.
Other receivables /H1118/H1118/H1118/H1118/H1118/H1118Based on the nature of receivables and the credit risk characteristics of
different counterparties, the Group classifies other receivables into
three groups, specifically: dividends receivable, receivables due from
related parties within the consolidation scope and other parts of other
receivables.
(b) Criteria for individual assessment
Bills receivable, accounts receivable and other receivables are usually assessed collectively as a group
based on credit risk characteristics to make provisions. When a counterparty is significantly different from
other counterparties in a group in terms of credit risk characteristics, or if there has been a significant change
in its credit risk characteristics, the individual approach is adopted for receivables due from this counterparty.
For example, when a counterparty is in serious financial difficulties and the expected credit loss ratio of
receivables due from this counterparty is significantly higher than the average expected credit loss ratio of the
relevant ageing range, it should be individually assessed for provisioning purposes.
APPENDIX I ACCOUNTANTS’ REPORT
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--- page 510 ---
Financial instruments that have low credit risk
The credit risk on a financial instrument is considered low if the financial instrument has a low risk of
default, the borrower has a strong capacity to meet its contractual cash flow obligations in the near term, and
adverse changes in economic and business conditions in the longer term may, but will not necessarily, reduce
the ability of the borrower to fulfil its contractual cash flow obligations.
Significant increases in credit risk
In assessing whether the credit risk of a financial instrument has increased significantly since initial
recognition, the Group compares the risk of default occurring on the financial instrument assessed at the
balance sheet date with that assessed at the date of initial recognition.
When determining whether the credit risk of a financial asset has increased significantly since initial
recognition, the Group considers reasonable and supportable information that is relevant and available without
undue cost or effort, including forward-looking information. In particular, the following information is taken
into account:
– failure to make payments of principal or interest on their contractual due dates;
– an actual or expected significant deterioration in a financial instrument’s external or internal
credit rating (if available);
– an actual or expected significant deterioration in the operating results of the debtor; and
– existing or forecast changes in the technological, market, economic or legal environment that
have a significant adverse effect on the debtor’s ability to meet its obligation to the Group.
The Group assumes that the credit risk on a financial asset has increased significantly if it is more than
30 days past due.
Credit-impaired financial assets
At each balance sheet date, the Group assesses whether financial assets carried at amortised cost and
debt investments at FVOCI are credit-impaired. A financial asset is ‘credit-impaired’ when one or more events
that have a detrimental impact on the estimated future cash flows of the financial asset have occurred. Evidence
that a financial asset is credit-impaired includes the following observable data:
– significant financial difficulties of the issuer or debtor;
– a breach of contract, such as a default or delinquency in interest or principal payments;
– for economic or contractual reasons relating to the debtor’s financial difficulties, the Group
having granted to the debtor a concession that it would not otherwise consider;
– it is probable that the debtor will enter bankruptcy or other financial reorganisation; or
– the disappearance of an active market for the financial asset because of financial difficulties of
the issuer or debtor.
Presentation of allowance for ECL
ECLs are remeasured at each balance sheet date to reflect changes in the financial instrument’s credit
risk since initial recognition. Any change in the ECL amount is recognised as an impairment gain or loss in
profit or loss. Loss allowances for financial assets measured at amortised cost are deducted from the gross
carrying amount of the assets.
APPENDIX I ACCOUNTANTS’ REPORT
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--- page 511 ---
Write-off
The gross carrying amount of a financial asset is written off (either partially or in full) to the extent that
there is no realistic prospect of recovery. A write-off constitutes a derecognition event. This generally occurs
when the Group determines that the debtor does not have assets or sources of income that could generate
sufficient cash flows to repay the amounts subject to the write-off. However, financial assets that are written
off could still be subject to enforcement activities in order to comply with the Group’s procedures for recovery
of amounts due.
Subsequent recoveries of an asset that was previously written off are recognised as a reversal of
impairment in profit or loss in the period in which the recovery occurs.
(7) Equity instruments
The issuance of equity instruments is recognised at the actual issue price in shareholders’ equity, relevant
transaction costs are deducted from shareholders’ equity (capital reserve), with any excess deducted from surplus
reserve and retained earnings sequentially. Consideration and transaction costs paid by the Company for repurchasing
self-issued equity instruments are deducted from shareholders’ equity.
When the Company repurchases its own shares, those shares are treated as treasury shares. The entire
repurchase expenditure is recorded as the cost of the treasury shares in the reference register. Treasury shares are
excluded from profit distributions and are presented as a deduction from shareholders’ equity on the balance sheet.
When treasury shares are cancelled, the share capital should be reduced to the extent of the total par value of
the treasury shares cancelled. Where the cost of the treasury shares cancelled exceeds the total par value, the excess
is deducted from capital reserve (share premium), surplus reserve and retained earnings sequentially. If the cost of
treasury shares cancelled is less than the total par value, the difference is credited to the capital reserve (share
premium).
When treasury shares are disposed of, any excess of proceeds above cost is recognised in capital reserve (share
premium); otherwise, the shortfall is deducted against capital reserve (share premium), surplus reserve and retained
earnings sequentially.
(8) Convertible instruments containing an equity component
Convertible instruments issued by the Group that can be converted to equity instruments of the Group, where
a fixed number of equity instruments is issued in exchange for a fixed amount of consideration at the time of
conversion, are accounted for as compound financial instruments containing both liability and equity components.
The initial carrying amount of a compound financial instrument is allocated to its equity and liability
components. The Group first determines the fair value of the liability component which includes the fair value of any
embedded derivatives other than the equity component. The amount allocated to the equity component is the residual
amount after deducting the fair value of the liability component from the fair value of the entire compound
instrument. Transaction costs that relate to the issue of a compound financial instrument are allocated to the liability
and equity components of the instrument in proportion to the allocation of proceeds.
Subsequent to initial recognition, the liability component is measured at amortised cost using the effective
interest method, unless it is designated upon recognition as measured at fair value through profit or loss. The equity
component is not re-measured.
If the convertible instrument is converted, the liability component is transferred to equity and the equity
component remains as equity, both of which are transferred to the relevant captions in equity. If the convertible
instrument is redeemed, the consideration paid for the redemption and the transaction costs that relate to the
redemption are allocated to the liability and equity components. The method used to allocate the consideration and
transaction costs is consistent with that used for the issue of the convertible instrument. After allocating the
consideration and transaction costs, the relevant difference between the allocated amount and carrying amount of the
liability component is recognised in profit and loss, and the relevant difference between the allocated amount and
carrying amount of the equity component is directly recognised in equity.
APPENDIX I ACCOUNTANTS’ REPORT
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10 Inventories
(1) Categories
Inventories include raw materials, finished goods, consumable biological assets, low value consumables and
packaging materials.
(2) Measurement method of cost of inventories
When the Group obtains main raw materials, low value consumables and packaging materials, the initial
measurement is based on the actual cost, including procurement costs, processing costs and other costs. Cost of main
raw materials recognised is calculated using the weighted average method.
Consumable biological assets include suckling piglets, piglets under nursing period, hogs under finishing
period and others.
The cost of consumable biological assets includes feed costs, labor costs, fixed assets depreciation expenses
and other indirect costs that should be allocated before they reach the saleable state.
The cost of suckling piglets includes the depreciation expenses and feeding cost of reproductive sows and
boars and the feeding cost of suckling piglets themselves. The cost of piglets under nursing period includes the cost
of suckling piglets and the feeding cost consumed at the nursing period. The cost of hogs under finishing period
includes the cost of piglets under nursing period and the feeding cost consumed at the finishing period.
Cost of consumable biological assets recognised is calculated using the weighted average method at the end
of each month.
(3) Basis for determining net realisable value of inventories and criteria and method for provision for
inventories
At the balance sheet date, inventories are carried at the lower of cost and net realisable value. Any excess of
the cost over the net realisable value of inventories is recognised as a provision for inventories, and is recognised
in profit or loss. The net realisable value of materials held for production is measured based on the net realisable
value of the finished goods in which they will be incorporated. If there is clear evidence that the net realisable value
of a consumable biological asset is lower than its carrying amount due to reasons such as natural disasters,
pest-outbreaks, diseases or changes in market conditions, a provision for decline in value in respect of that biological
asset shall be recognised and charged to profit or loss for the current period. The provision amount is the difference
between the carrying amount and the net realizable value.
Provisions for inventories are usually assessed by each item. When the circumstances that previously caused
inventories to be written down below cost no longer exist, the amount of the write-down shall be reversed. The
reversal shall be limited to the amount originally provided for the decline in value of inventories. The amount of the
reversal is included in profit or loss for the current period.
(4) Inventory count system
The Group maintains a perpetual inventory system.
11 Long-term equity investments
(1) Investment cost of long-term equity investments
(a) Long-term equity investments acquired through a business combination
– The initial cost of a long-term equity investment acquired through a business combination involving
entities under common control is the Company’s share of the carrying amount of the subsidiary’s equity
in the consolidated financial statements of the ultimate controlling party at the combination date. The
difference between the initial investment cost and the carrying amount of the consideration given is
adjusted to the share premium in the capital reserve, with any excess deducted from surplus reserve and
retained earnings sequentially.
APPENDIX I ACCOUNTANTS’ REPORT
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--- page 513 ---
– For a long-term equity investment obtained through a business combination not involving entities under
common control, the initial cost comprises the aggregate of the fair value of assets transferred, liabilities
incurred or assumed, and equity securities issued by the Company, in exchange for control of the
acquiree.
(b) Long-term equity investments acquired other than through a business combination
– A long-term equity investment acquired other than through a business combination is initially
recognised at the amount of cash paid if the Group acquires the investment by cash, or at the fair value
of the equity securities issued if an investment is acquired by issuing equity securities.
(2) Subsequent measurement of long-term equity investment
(a) Investments in subsidiaries
In the Company’s separate financial statements, long-term equity investments in subsidiaries are accounted for
using the cost method for subsequent measurement, unless the investment is classified as held for sale. The Company
recognises its share of the cash dividends or profit distributions declared by the investee as investment income for
the current period.
(b) Investment in joint ventures and associates
A joint venture is an arrangement whereby the Group and other parties have joint control and rights to the net
assets of the arrangement. An associate is an entity over which the Group has significant influence.
An investment in a joint venture or an associate is accounted for using the equity method for subsequent
measurement, unless the investment is classified as held for sale.
After acquiring the investment, the Group recognises its share of the investee’s profit or loss and other
comprehensive income as investment income or losses and other comprehensive income respectively, and adjusts the
carrying amount of the investment accordingly. Once the investee declares any cash dividends or profit distributions,
the carrying amount of the investment is reduced by the amount attributable to the Group. Changes in the Group’s
share of the investee’s owners’ equity, other than those arising from the investee’s net profit or loss, other
comprehensive income or profit distribution (referred to as “other changes in owners’ equity”), are recognised
directly in the Group’s equity, and the carrying amount of the investment is adjusted accordingly.
Unrealised profits and losses resulting from transactions between the Group and its associates or joint ventures
are eliminated to the extent of the Group’s interest in the associates or joint ventures. Unrealised losses resulting from
transactions between the Group and its associates or joint ventures are eliminated in the same way as unrealised gains,
unless they represent impairment losses that are recognised in full in the financial statements.
The Group discontinues recognising its share of further losses of the investee after the carrying amount of the
long-term equity investment and any long-term interest that in substance forms part of the Group’s net investment
in the joint venture or associate is reduced to zero, except to the extent that the Group has an obligation to assume
additional losses. If the joint venture or associate subsequently reports net profits, the Group resumes recognising its
share of those profits only after its share of the profits has fully covered the share of losses not recognised.
(3) Criteria for determining the existence of joint control or significant influence over an investee
Joint control is the contractually agreed sharing of control of an arrangement, which exists only when decisions
about the relevant activities (activities with significant impact on the returns of the arrangement) require the
unanimous consent of the parties sharing control.
The following factors are usually considered when assessing whether the Group can exercise joint control over
an investee:
– Whether no single participant party is in a position to control the investee’s relevant activities
unilaterally;
– Whether decisions relating to the investee’s relevant activities require the unanimous consent of all
participant parties that share control.
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Significant influence is the power to participate in the financial and operating policy decisions of an investee
but is not control or joint control of those policies.
12 Investment properties
Investment properties are properties held either to earn rental income or for capital appreciation or both.
Investment properties are accounted for using the cost model. The cost of investment property, less its estimated
residual value and accumulated impairment losses, is depreciated using the straight-line method over its estimated
useful life, unless the investment property is classified as held for sale.
The estimated useful lives, residual value rates and depreciation rates of each class of investment properties
are as follows:
Method of depreciation
Estimated useful
life (years)
Residual
value rate
Depreciation rate
per year
Plant & buildings /H1118/H1118/H1118/H1118/H1118Straight-line method 20 5% 4.75%
Land use rights /H1118/H1118/H1118/H1118/H1118/H1118Straight-line method 40-50 0% 2.00%-2.50%
13 Fixed assets
(1) Recognition of fixed assets
The cost of a purchased fixed asset comprises the purchase price, related taxes, and any directly attributable
expenditure for bringing the asset to working condition for its intended use. The cost of self-constructed assets is
measured in accordance with the policy set out in Note II.14.
Where the parts of an item of fixed assets have different useful lives or provide benefits to the Group in a
different pattern, thus necessitating use of different depreciation rates or methods, each part is recognised as a
separate fixed asset.
Any subsequent costs including the cost of replacing part of an item of fixed assets are recognised as assets
when it is probable that the economic benefits associated with the costs will flow to the Group, and the carrying
amount of the replaced part is derecognised. The costs of the day-to-day maintenance of fixed assets are recognised
in profit or loss as incurred.
Fixed assets are presented in the balance sheet at cost less accumulated depreciation and impairment provision.
(2) Depreciation of fixed assets
The cost of a fixed asset, less its estimated residual value and accumulated impairment losses, is depreciated
using the straight-line method over its estimated useful life, unless the fixed asset is classified as held for sale.
The estimated useful lives, residual value rates and depreciation rates of each class of fixed assets are as
follows:
Method of depreciation
Estimated useful
life (years)
Residual
value rate
Depreciation rate
per year
Plant & buildings /H1118/H1118/H1118/H1118/H1118Straight-line method 10-20 5% 4.75%-9.50%
Machinery & equipment /H1118 Straight-line method 3-20 5% 4.75%-31.67%
Motor vehicles /H1118/H1118/H1118/H1118/H1118/H1118/H1118Straight-line method 6 5% 15.83%
Others /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Straight-line method 3-10 5% 9.50%-31.67%
Useful lives, estimated residual values and depreciation methods are reviewed at least at each year-end.
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14 Construction in progress
The cost of construction in progress is determined according to the actual project expenditure, including
various project expenditure and capitalised borrowing costs and other related costs attributable to bringing the asset
to working condition for its intended use. A construction in progress is transferred to fixed assets when it is ready
for its intended use. No depreciation is recorded against construction in progress.
15 Borrowing costs
Borrowing costs include interest on borrowings, amortisation of any discount or premium, ancillary costs and
exchange differences arising from specific-purpose borrowings dominated in foreign currency. Borrowing costs that
are directly attributable to the acquisition, construction or production of a qualifying asset are capitalised as part of
the cost of that asset. The capitalisation can commence when expenditures for the asset are being incurred, borrowing
costs are being incurred and activities relating to the acquisition, construction or production of the asset that are
necessary to prepare the asset for its intended use or sale have commenced. Capitalisation of borrowing costs cease
when the qualifying asset being acquired, constructed or produced becomes ready for its intended use or sale. Other
borrowing costs are recognised as financial expenses when incurred.
For funds that are borrowed specifically for the acquisition, construction or production of a qualifying asset,
the amount of interest to be capitalised is the actual interest expense during the period less any interest income earned
from depositing the borrowed funds or any investment income on the temporary investment of those funds before they
are used on the asset; For funds are borrowed generally and used for the acquisition, construction or production of
a qualifying asset, the amount of borrowing costs eligible for capitalisation is determined by applying a capitalisation
rate to the weighted average of the excess amounts of cumulative expenditure on the asset over the above amounts
of specific borrowings. The capitalisation rate is the weighted average of the interest rates applicable to the
general-purpose borrowings.
During the capitalisation period, exchange differences related to a specific-purpose borrowing denominated in
foreign currency are capitalised as part of the cost of the qualifying asset. The exchange differences related to a
general-purpose borrowing denominated in foreign currency is recognised in profit or loss when incurred.
Qualifying assets are assets (fixed assets, investment property, inventories, etc.) that necessarily take a
substantial period of time for acquisition, construction or production to get ready for their intended use or sale.
Capitalisation of borrowing costs are suspended during periods in which the acquisition, construction or
production of a qualifying asset is interrupted abnormally, when the interruption is for a continuous period of more
than 3 months, until the acquisition, construction or production is resumed.
16 Biological assets
Biological assets of the Group include consumable biological assets and productive biological assets.
Consumable biological assets include suckling piglets, piglets under nursing period, hogs under finishing
period and others. Consumable biological assets are recognised in inventories (see Note II.10).
Productive biological assets include immature breeding hogs and mature breeding hogs. Mature breeding hogs
are reproductive boars and reproductive sows.
Productive biological assets are initially measured at cost. The cost of purchased productive biological assets
comprises purchase price, relevant taxes, transportation costs, insurance costs, and other expenditures directly
attributable to the purchase of the assets. The cost of self-breeding productive biological assets comprises those costs
necessarily incurred before the assets become available for intended production and operating purposes, including
feed costs, labor costs, an appropriate allocation of the depreciation cost of fixed assets and mature productive
biological assets and an appropriate allocation of other indirect costs.
The subsequent costs of mature productive biological assets, including feed costs, labor costs and depreciation
costs, are collected and included in the cost of piglets.
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The Group accrues depreciation of productive biological assets using straight-line method. The Group
determines the useful life and estimated net residual value of a productive biological asset and the depreciation
method on a reasonable basis according to the asset’s nature, usage and the pattern in which the associated economic
benefits are expected to be realised. The Group reviews the useful life and estimated net residual value of a
productive biological asset and the depreciation method applied at least at each financial year-end. If the expected
useful life or estimated net residual value is different from the previous estimate, or the pattern in which the economic
benefits associated with the asset is realised has changed significantly, the useful life, estimated net residual value
or the depreciation method shall be revised or changed accordingly. Such revisions or changes shall be accounted for
as changes in accounting estimates. The useful life, expected net residual value and depreciation method of the
mature productive biological assets of the Group are as follows:
Estimated useful
life (years)
Estimated net
residual value rate
Depreciation rate
per month
Breeding hogs /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182.5 30% 2.33%
The Group carries out an examination on productive biological assets at least at each financial year-end. If
there is clear evidence that the recoverable amount of a productive biological asset is lower than its carrying amount
due to reasons such as natural disasters, pest-outbreaks, diseases or changes in market conditions, impairment losses
in respect of that biological asset shall be recognised and charged to profit or loss for the current period. The
impairment amount is the difference between the carrying amount and the recoverable amount.
Once an impairment loss is provided for a productive biological asset, it should not be reversed in a subsequent
period.
When the intended use of a productive biological asset changes, the transfer cost shall be recorded at the
carrying amount at the date of transfer.
17 Intangible assets
(1) Useful life and amortisation methods
For an intangible asset with a finite useful life, its cost less estimated residual value and accumulated
impairment losses is amortised over its estimated useful life, unless the intangible asset is classified as held for sale.
The estimated useful lives, basis for determination and amortisation methods of intangible assets are as
follows:
Estimated useful life
(years) Basis for determination Amortisation method
Land use rights /H1118/H1118/H1118 10-50 Term of property right
registration
Straight-line method
Software /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183-10 Expected economic benefit
period
Straight-line method
Emission right /H1118/H1118/H1118/H1118 5 Expected economic benefit
period
Straight-line method
Trademark /H1118/H1118/H1118/H1118/H1118/H1118/H111810 Expected economic benefit
period
Straight-line method
Useful lives and amortisation methods of intangible assets with finite useful lives are reviewed at least at each
year-end.
An intangible asset is regarded as having an indefinite useful life and is not amortised when there is no
foreseeable limit to the period over which the asset is expected to generate economic benefits for the Group. The
Group reassesses the useful lives of intangible assets with indefinite useful lives in each accounting period.
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(2) Expenditures on research and development
Expenditures on internal research and development projects are classified into expenditures incurred during the
research phase and expenditures incurred during the development phase.
Expenditures during the research phase are expensed when incurred. Expenditures during the development
phase are capitalised if development costs can be measured reliably, the product or process is technically and
commercially feasible, and the Group intends to and has sufficient resources to complete the development. Other
development expenditures are recognised as expenses in the period in which it is incurred.
18 Impairment of assets other than inventories and financial assets
The carrying amounts of the following assets are reviewed at each balance sheet date based on internal and
external sources of information to determine whether there is any indication of impairment:
– fixed assets
– construction in progress
– right-of-use assets
– intangible assets
– productive biological assets
– investment properties measured using a cost model
– long-term equity investments
– long-term deferred expenses
If any indication exists, the recoverable amount of the asset is estimated. The recoverable amount of an asset
(or asset group or set of asset groups) is the higher of its fair value less costs of disposal and the present value of
its expected future cash flows.
An asset group is composed of assets related to cash generation and is the smallest identifiable group of assets
that generates cash inflows that are largely independent of the cash inflows from other assets or asset groups.
The present value of an asset’s expected future cash flows is determined by discounting the future cash flows,
estimated to be derived from continuing use of the asset and from its ultimate disposal, to their present value using
an appropriate pre-tax discount rate.
An impairment loss is recognised in profit or loss when the recoverable amount of an asset is less than its
carrying amount. A provision for impairment of the asset is recognised accordingly to reduce the carrying amount to
the recoverable amount. Impairment losses related to an asset group or a set of asset groups are allocated first to
reduce the carrying amount of any goodwill allocated to the asset group or set of asset groups, and then to reduce
the carrying amount of the other assets in the asset group or set of asset groups on a pro rata basis. However, such
allocations would not reduce the carrying amount of an asset below the highest of its fair value less costs of disposal
(if measurable), the present value of its expected future cash flows (if determinable) and zero.
Once an impairment loss is recognised, it should not be reversed in a subsequent period.
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19 Fair value measurement
Unless otherwise specified, the Group measures fair value as follows:
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly
transaction between market participants at the measurement date.
When measuring fair value, the Group takes into account the characteristics of the particular asset or liability
(including the condition and location of the asset and restrictions, if any, on the sale or use of the asset) that market
participants would consider when pricing the asset or liability at the measurement date, and the Group uses valuation
techniques that are appropriate in the circumstances and for which sufficient data and other information are available
to measure fair value. V aluation techniques mainly include the market approach, the income approach and the cost
approach.
20 Provisions
A provision is recognised for an obligation related to a contingency if the Group has a present obligation that
can be estimated reliably, and it is probable that an outflow of economic benefits will be required to settle the
obligation.
A provision is initially measured at the best estimate of the expenditure required to settle the related present
obligation. Where the effect of the time value of money is material, provisions are determined by discounting the
expected future cash flows. Factors pertaining to a contingency such as the risks, uncertainties and time value of
money are taken into account as a whole in reaching the best estimate. Where there is a continuous range of possible
outcomes for the expenditure required, and each possible outcome in that range is as likely as any other, the best
estimate is the mid-point of that range. In other cases, the best estimate is determined as follows:
– Where the contingency involves a single item, the best estimate is the most likely outcome.
– Where the contingency involves a large population of items, the best estimate is determined by
weighting all possible outcomes by their associated probabilities.
The Group reviews the carrying amounts of provisions at the balance sheet date and adjusts their carrying
amounts to the current best estimates.
21 Share-based payments
(1) Classification of share-based payments
Share-based payment transactions in the Group are equity-settled share-based payments.
(2) Accounting treatment of share-based payments
– Equity-settled share-based payments
Where the Group uses shares or other equity instruments as consideration for services received from
employees, the payment is measured at the fair value of the equity instruments granted to employees at the grant date.
If the equity instruments granted do not vest until the completion of services for a period, or until the achievement
of a specified performance condition, the Group recognises an amount at each balance sheet date during the vesting
period based on the best estimate of the number of equity instruments expected to vest according to newly obtained
subsequent information regarding changes in the number of employees expected to vest the equity instruments. The
Group measures the services received at the grant-date fair value of the equity instruments and recognises the costs
or expenses as the services are received, with a corresponding increase in capital reserve.
When the Group modifies share-based payment transactions, if the modification increases the fair value of the
equity instruments granted, the Group should recognise the increase of the services obtained according to the increase
in the fair value of the equity instruments. The increase in the fair value of the equity instruments is the difference
between the fair value of the modified share-based payment and that of the original share-based payment, both
measured at the date of the modification. If the modification decreases the fair value of the equity instruments granted
APPENDIX I ACCOUNTANTS’ REPORT
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or is not beneficial to employees, the Group should continue to recognise the amount of the services obtained based
on the fair value of the equity instruments on the date of grant, without considering the modification, unless the
Group cancels or settles some or all of the equity instruments granted.
If a grant of equity instruments is cancelled during the vesting period, the Group accounts for the cancellation
as an acceleration of vesting, and therefore recognise immediately the amount that otherwise would have been
recognised for services received over the remainder of the vesting period, with a corresponding increase in capital
reserve. If an employee or counterparty can choose whether to meet a non-vesting condition, the Group treats as a
cancellation when the employee’s or counterparty’s failure to meet that non-vesting condition during the vesting
period.
22 Revenue recognition
Revenue is recognised when the customers obtain control over relevant goods, if the contract with customers
meets all of the following criteria: (i) the parties to the contract have approved the contract and are committed to
perform their respective obligations; (ii) the parties to the contract can identify each party’s rights regarding the
goods to be transferred; (iii) the parties to the contract can identify the payment terms for the goods to be transferred;
(iv) the contract has commercial substance (i.e. the risk, timing or amount of the entity’s future cash flows is expected
to change as a result of the contract); and (v) it is probable that the Group will collect the consideration to which
it will be entitled in exchange for the goods that will be transferred to the customer.
Performance obligation is the Group’s commitment to transfer distinct goods to customers as specified in
related contracts. A good that is promised to a customer is distinct if both of the following criteria are met: (i) the
customer can benefit from the good either on its own or together with other resources that are readily available to
the customer; and (ii) the Group’s promise to transfer the good to the customer is separately identifiable from other
promises in the contract.
Where a contract has two or more performance obligations, the Group determines the stand-alone selling price
at contract inception of the distinct good or service underlying each performance obligation in the contract and
allocates the transaction price in proportion to those stand-alone selling prices. The Group recognises as revenue the
amount of the transaction price that is allocated to each performance obligation. The stand-alone selling price is the
price at which the Group separately sells goods or provides services to customers. If the stand-alone selling price
cannot be directly observable, the Group will comprehensively consider all the relevant information that is reasonably
available to the Group and use the observable inputs to estimate the stand-alone selling price to the maximum extent.
The Group satisfies a performance obligation over time if one of the following criteria is met; otherwise, the
performance obligation is satisfied at a point in time:
– the customer simultaneously receives and consumes the benefits provided by the Group’s performance
as the Group performs;
– the customer can control the asset created or enhanced during the Group’s performance; or
– the Group’s performance does not create an asset with an alternative use to it and the Group has an
enforceable right to payment for performance completed to date.
For performance obligation satisfied at a point in time, the Group recognises revenue at the point in time at
which the customer obtains control of relevant goods. To determine whether a customer has obtained control of
goods, the Group considers the following indicators: (i) the Group has a present right to payment for the goods and
the customer is presently obliged to pay for the goods; (ii) the Group has transferred physical possession of the goods
and the customer has physical possession of the goods; (iii) the Group has transferred the legal title of the goods and
the customer has legal title to the goods; (iv) the Group has transferred the significant risks and rewards of ownership
of the goods and the customer has the significant risks and rewards of ownership of the goods; (v) the customer has
accepted the goods; (vi) other indicators of that the customer obtains control of relevant goods.
The Group determines whether it is a principal or an agent, based on whether it obtains control of the specified
good or service before that good or service is transferred to a customer. The Group is a principal if it controls the
specified good or service before that good or service is transferred to a customer, and recognises revenue in the gross
amount of consideration which it has received (or which is receivable). Otherwise, the Group is an agent, and
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recognises revenue in the amount of any fee or commission to which it expects to be entitled. The fee or commission
is the net amount of consideration that the Group retains after paying the other party the consideration, or is
determined according to the established amount or proportion.
A contract asset is the Group’s right to consideration in exchange for goods or services that it has transferred
to a customer when that right is conditional on something other than the passage of time. The Group recognises loss
allowances for expected credit loss on contract assets. Accounts receivable is the Group’s right to consideration that
is unconditional (only the passage of time is required). A contract liability is the Group’s obligation to transfer goods
or services to a customer for which the Group has received consideration (or an amount of consideration is due) from
the customer.
The recognition of revenue from sales of goods is as follows:
– Sales of hogs
Hogs are usually collected by customers from the Group’s premises. According to the sales contract, the
control of the hogs is transferred to the customers when the hogs have been weighted. The revenue will be recognised
based on the weight information on the weight note and the agreed unit prices.
– Sales of meat products
For orders collected by customers from the Group’s premises, revenue is recognised when the customers sign
the delivery note. For orders that the Group is responsible for the delivery, revenue is recognised when the goods are
delivered to the location designated by the customers and the delivery note is signed by the customers.
23 Employee benefits
(1) Short-term employee benefits
Short-term employee benefits mainly include fees, salaries, contribution to pension schemes, housing
allowances, other allowances, benefits-in-kind, discretionary bonuses and other non-monetary benefits. During the
period of the employee provides services, the Group measures the short-term employee benefits at the amount
incurred or accrued at the applicable benchmarks and rates, and recognises the amount as a liability, with a
corresponding charge to profit or loss or included in the cost of assets where appropriate. Non-monetary benefits are
measured at fair value of the assets.
(2) Post-employment benefits — defined contribution plans
Pursuant to the relevant laws and regulations of the PRC, the Group participates in a defined contribution basic
pension insurance plan in the social insurance system established and managed by government organisations. The
Group makes contributions to basic pension insurance plans based on the applicable benchmarks and rates stipulated
by the government. Basic pension insurance contributions payable is recognised as a liability as the employee
provides services, with a corresponding charge to profit or loss or included in the cost of assets where appropriate.
(3) Termination benefits
When the Group terminates an employee’s employment before the employment contract expires, or provides
compensation under an offer to encourage employees to accept voluntary redundancy, a provision is recognised with
a corresponding expense in profit or loss at the earlier of the following dates:
– When the Group cannot unilaterally withdraw the offer of termination benefits provided in an employee
termination plan or a curtailment proposal;
– When the Group has a formal detailed restructuring plan involving the payment of termination benefits
and has raised a valid expectation in those affected that it will carry out the restructuring by starting to
implement that plan or announcing its main features to those affected by it.
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24 Government grants
A government grant is recognised when there is reasonable assurance that the grant will be received and that
the Group will comply with the conditions attached to the grant.
If a government grant is in the form of a transfer of a monetary asset, it is measured at the amount received
or receivable. If a government grant is in the form of a transfer of a non-monetary asset, it is measured at fair value
of the non-monetary asset.
Government grants related to assets are grants whose primary condition is that the Group qualifying for them
should purchase, construct or otherwise acquire long-term assets. Government grants related to income are grants
other than those related to assets. A government grant related to an asset is recognised as deferred income and
amortised over the useful life of the related asset on a reasonable and systematic manner as other income or
non-operating income. A grant that compensates the Group for expenses or losses to be incurred in the future is
recognised as deferred income, and included in other income or non-operating income in the periods in which the
expenses or losses are recognised. Otherwise, the grant is included in other income or non-operating income.
The Group recognises the interest subsidy for policy-related preferential loans as following:
– Where the government appropriates an interest subsidy to the lending bank, allowing the latter to
provide loans to the Group at a preferential interest rate, the Group recognises the loan amount received
as the book-entry value of such loans, and calculating the relevant loan expenses according to the loan
principal and the preferential interest rate;
– Where the government directly appropriates an interest subsidy to the Group, the Group shall use the
interest subsidy to offset relevant loan expenses.
25 Income tax
Current tax and deferred tax are recognised in profit or loss except to the extent that they relate to a business
combination or items recognised directly in equity (including other comprehensive income).
Current tax is the expected tax payable calculated at the applicable tax rate on taxable income for the reporting
period, plus any adjustment to tax payable in respect of previous years.
At the balance sheet date, current tax assets and liabilities are offset only if the Group has a legally enforceable
right to set them off and also intends either to settle on a net basis or to realise the asset and settle the liability
simultaneously.
Deferred tax assets and deferred tax liabilities arise from deductible and taxable temporary differences
respectively, being the differences between the carrying amounts of assets and liabilities for financial reporting
purposes and their tax bases, which include deductible losses and tax credits carried forward to subsequent periods.
Deferred tax assets are recognised to the extent that it is probable that future taxable profits will be available against
which deductible temporary differences can be utilised.
Deferred tax is not recognised for temporary differences arising from the initial recognition of assets or
liabilities in a single transaction that is not a business combination, affects neither accounting profit nor taxable profit
(or deductible loss) and does not give rise to equal taxable and deductible temporary differences. Deferred tax is also
not recognised for taxable temporary differences arising from the initial recognition of goodwill.
At the balance sheet date, deferred tax is measured based on the tax consequences that would follow from the
expected manner of recovery or settlement of the carrying amounts of the assets and liabilities, using tax rates enacted
at the balance sheet date that are expected to be applied in the period when the asset is recovered or the liability is
settled.
The carrying amount of a deferred tax asset is reviewed at each balance sheet date, and is reduced to the extent
that it is no longer probable that the related tax benefits will be utilised. Such reductions are reversed to the extent
that it becomes probable that sufficient taxable profits will be available.
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At the balance sheet date, deferred tax assets and deferred tax liabilities are offset if all of the following
conditions are met:
– the taxable entity has a legally enforceable right to offset current tax liabilities and current tax assets;
– they relate to income taxes levied by the same tax authority on either: (i) the same taxable entity; or (ii)
different taxable entities which intend either to settle the current tax liabilities and current tax assets on
a net basis, or to realise the assets and settle the liabilities simultaneously, in each future period in which
significant amounts of deferred tax liabilities or deferred tax assets are expected to be settled or
recovered.
26 Leases
At inception of a contract, the Group assesses whether a contract is, or contains, a lease.
For a contract that contains multiple separate lease components, the lessee and the lessor separate the lease
components and account for each lease component as a lease separately. For a contract that contains lease and
non-lease components, the lessee and the lessor separate the lease components from the non-lease components.
However, for leases of land and buildings in which it is a lessee, the Group has elected not to separate lease
components from non-lease components and accounts for each lease component and any associated non-lease
components as a single lease component.
As a lessee
The Group recognises a right-of-use asset and a lease liability at the lease commencement date.
The right-of-use asset is depreciated using the straight-line method. If the lessee is reasonably certain
to obtain the ownership of the lease asset by the end of the lease term, the right-of-use asset is depreciated over
the remaining useful life of the underlying asset. Otherwise, the right-of-use asset is depreciated over the
shorter of the lease term or the remaining useful life of the lease asset.
The lease liability is initially measured at the present value of the lease payments that are not paid at
the commencement date, discounted using the interest rate implicit in the lease or, if that rate cannot be readily
determined, the Group’s incremental borrowing rate.
A constant periodic rate is used to calculate the interest on the lease liability in each period during the
lease term with a corresponding charge to profit or loss or included in the cost of assets where appropriate.
V ariable lease payments not included in the measurement of the lease liability are charged to profit or loss or
included in the cost of assets where appropriate as incurred.
Under the following circumstances after the lease commencement date, the Group remeasures lease
liabilities based on the present value of revised lease payments:
– there is a change in the amounts expected to be payable under a residual value guarantee;
– there is a change in future lease payments resulting from a change in an index or a rate used to
determine those payments;
– there is a change in the assessment of whether the Group will exercise a purchase, extension or
termination option, or the Group has exercised the extension or termination option in a different
manner from the original assessment.
When the lease liability is remeasured, a corresponding adjustment is made to the carrying amount of
the right-of-use asset, or is recorded in profit or loss if the carrying amount of the right-of-use asset has been
reduced to zero.
The Group has elected not to recognise right-of-use assets and lease liabilities for short-term leases that
have a lease term of 12 months or less and leases of low-value assets (A leased asset is of low value
individually when it is new). The Group recognises the lease payments associated with these leases in profit
or loss or as the cost of the assets where appropriate using the straight-line method over the lease term.
APPENDIX I ACCOUNTANTS’ REPORT
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27 Hedge accounting
Hedge accounting is a method which recognises in profit or loss (or other comprehensive income) the gain or
loss on the hedging instrument and the hedged item in the same accounting period(s) to represent the effect of risk
management.
Hedged items are items that expose the Group to risks of changes in fair value or cash flows and that are
designated as being hedged and can be reliably measured. The Group’s hedged items include highly probable forecast
purchase or sales that expose the Group to the risk of variability in cash flows.
A hedging instrument is a designated financial instrument whose changes in fair value or cash flows are
expected to offset changes in the fair value or cash flows of the hedged item.
The Group assesses at the inception of a hedging relationship, and on an ongoing basis, whether the hedging
relationship meets the hedge effectiveness requirements. A hedging relationship is regarded as having met the hedge
effectiveness requirements if all of the following conditions are satisfied:
– There is an economic relationship between the hedged item and the hedging instrument.
– The effect of credit risk does not dominate the value changes that result from the economic relationship.
– The hedge ratio of the hedging relationship is the same as that resulting from the quantity of the hedged
item that the entity actually hedges and the quantity of the hedging instrument that the entity actually
uses to hedge that quantity of the hedged item.
When a hedging relationship no longer meets the hedge effectiveness requirements due to the hedge ratio, but
the risk management objective of the designated hedging relationship remains unchanged, the Group rebalances the
hedging relationship. Rebalancing refers to the adjustments made to the designated quantities of the hedged item or
the hedging instrument of an already existing hedging relationship for the purpose of maintaining a hedge ratio that
complies with the hedge effectiveness requirements.
The Group discontinues applying hedge accounting in any of the following circumstances:
– The hedging relationship no longer meets the risk management objective due to changes in the risk
management objective.
– The hedging instrument expires or is sold, terminated or exercised.
– There is no longer an economic relationship between the hedged item and the hedging instrument, or the
effect of credit risk starts to dominate the value changes that result from that economic relationship.
– The hedging relationship no longer meets other criteria for applying hedge accounting.
Cash flow hedges
A cash flow hedge is a hedge of the exposure to variability in cash flows. The portion of the gain or loss
on a hedging instrument that is determined to be an effective hedge is recognised in other comprehensive
income as a cash flow hedge reserve. The amount of the cash flow hedge reserve is adjusted to the lower of
the following (in absolute amounts):
– the cumulative gain or loss on the hedging instrument from the inception of the hedge;
– the cumulative change in present value of the expected future cash flows of the hedged item from
the inception of the hedge.
The change in the amount of the cash flow hedge reserve is recognised in other comprehensive income
in each period.
The portion of the gain or loss on the hedging instrument that is determined to be ineffective is
recognised in profit or loss.
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If a hedged forecast transaction subsequently results in the recognition of a non-financial asset or
non-financial liability, or a hedged forecast transaction for a non-financial asset or non-financial liability
becomes a firm commitment for which fair value hedge accounting is applied, the Group removes that amount
from the cash flow hedge reserve and includes it in the initial cost or other carrying amount of the asset or
liability.
For cash flow hedges other than those covered above, the amount is reclassified from the cash flow
hedge reserve in other comprehensive income to profit or loss as a reclassification adjustment in the same
period or periods during which the hedged expected future cash flows affect profit or loss.
When the Group discontinues hedge accounting for a cash flow hedge, the amount of the accumulated
cash flow hedge reserve recognised in other comprehensive income is accounted for as follows:
– If the hedged future cash flows are still expected to occur, the amount will remain in the cash flow
hedge reserve, and be accounted for in accordance with the above policy.
– If the hedged future cash flows are no longer expected to occur, the amount is immediately
reclassified from the cash flow hedge reserve to profit or loss as a reclassification adjustment.
28 Dividends distributions
Dividends or profit distributions proposed in the profit appropriation plan, which will be approved after the
balance sheet date, are not recognised as a liability at the balance sheet date but are disclosed in the notes separately.
29 Related parties
If a party has the power to control, jointly control or exercise significant influence over another party, or vice
versa, or where two or more parties are subject to common control or joint control from another party, they are
considered to be related parties. Related parties may be individuals or enterprises. Enterprises with which the
Company is under common control only from the State and that have no other related-party relationships are not
regarded as related parties.
In addition to the related parties stated above, the Company determines related parties based on the disclosure
requirements of the Administrative Procedures on the Information Disclosures of Listed Companies issued by the
CSRC.
30 Segment reporting
Reportable segments are identified based on operating segments which are determined based on the structure
of the Group’s internal organisation, management requirements and internal reporting system after taking the
materiality principle into account. Two or more operating segments may be aggregated into a single operating
segment if the segments have similar economic characteristics and are the same or similar in respect of the nature
of products and services, the nature of production processes, the types or classes of customers for the products and
services, the methods used to distribute the products or provide the services, and the nature of the regulatory
environment.
For segment reporting, inter-segment revenues are measured on the basis of the actual transaction prices for
such transactions, and segment accounting policies are consistent with those used to prepare the consolidated
financial statements.
31 Material accounting estimates and judgements
The preparation of the financial statements requires management to make estimates and assumptions that affect
the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual
results may differ from these estimates. Estimates as well as the underlying assumptions and uncertainties involved
are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the
estimate is revised and in any future periods affected.
APPENDIX I ACCOUNTANTS’ REPORT
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Material accounting estimates
In addition to the accounting estimates relating to assumptions and risk factor of fair value
measurements of financial instruments (see Notes IX), other significant accounting estimates are as follows:
– Provision of inventories
According to inventories accounting policy of the Group, inventories are measured at the lower
of cost and net realisable value. If the cost of inventories is higher than the net realisable value, a
provision for decline in value of inventories will be recognised. The decline in value of inventories to
net realisable value is based on the assessment of the marketability and net realisable value of
inventories. Identification of inventories impairment requires management to make judgments and
estimates based on solid evidence obtained and after taking into consideration the purpose for which the
inventory is held, and the effect of events occurring after the balance sheet date.
– Impairment of assets other than inventories and financial assets
At the balance sheet date, the Group assesses whether there is any indication that assets other than
inventories and financial assets may be impaired. For other non-current assets other than financial
assets, impairment testing will be carried out if any indication exists that their carrying amount is not
recoverable.
When the carrying amount of the assets or assets group is higher than the recoverable amount,
ie, the higher of its fair value less costs to sell and the present value of the future cash flows expected
to be derived from the asset, it indicates that the impairment has occurred.
Fair value less costs to sell, is determined with reference to sales contract price of the similar
assets in an arm’s length transaction or observable market price, less the incremental cost directly
attributable to the disposal of the assets.
When estimating the present value of the future cash flows, the Group needs to make a major
judgment on the output, selling price, related operating costs of the assets (or assets group) and the
discount rate used in calculating the present value. When estimating the recoverable amount, the Group
will use all available relevant information, including the prediction of production, selling price and
related operating costs based on reasonable and supportable assumptions.
– Depreciation and amortisation
After considering the residual value of fixed assets, productive biological assets, right-of-use
assets and intangible assets, the Group accrues depreciation and amortisation using straight-line method
over their estimated useful life. The Group regularly reviews the estimated useful life to determine the
amount of depreciation and amortisation expense to be recognised in each reporting period. The
estimated useful life is determined by the Group based on the past experience of similar assets and in
combination with the expected technology update. If there are significant changes in the previous
estimates, the depreciation and amortisation expenses will be adjusted in the future.
APPENDIX I ACCOUNTANTS’ REPORT
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III. TAXATION
1 Main types of taxes and corresponding tax rates
Tax type Tax basis
Tax rate during the
Track Record Period
V alue-added tax (“V A T”)/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Based on taxable revenue 13%, 9%, 6%, 5%,
3%, 1%
Enterprise income tax /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Based on taxable profits 0%, 15%, 16.5%,
17%, 20%, 25%
Real estate tax /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Based on the cost of the real estate
with 30% one-off deduction or
lease income
1.2%, 12%
Urban maintenance and construction tax /H1118/H1118Based on V A T paid 7%, 5%, 1%
Education surcharges /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Based on V A T paid 3%
Local education surcharges /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Based on V A T paid 2%
Entities in the Group that apply different enterprise income tax rates are disclosed as below:
Tax rate during the year ended 31 December
Tax rate during the
nine months ended 30 September
Entity Name Note 2022 2023 2024 2024 2025
(unaudited)
Muyuan International (BVI)
Limited /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(i) 0% 0% 0% 0% 0%
Henan Muyuan Smart
Technology Co., Ltd. /H1118/H1118/H1118III.2(2) 15% 15% 15% 15% 15%
Muyuan International
Limited /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(ii) 16.5% 16.5% 16.5% 16.5% 16.5%
Hap Grain International
Agricultural Trading
Pte. Ltd. /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(iii)
Not
registered 17% 17% 17% 17%
Muyuan Vietnam Company
Limited /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(iv)
Not
registered
Not
registered
Not
registered
Not
registered 20%
Shenzhen Muyuan Digital
Technology Co., Ltd. /H1118/H1118/H1118III.2(2) 20% 20% 20% 20% 20%
Zhengzhou Muyuan Digital
Technology Co., Ltd. /H1118/H1118/H1118III.2(2) 20% 20% 20% 20% 20%
Henan Muyuan Ecology
Environment Technology
Co., Ltd. /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118III.2(2) 20% 20% 25% 25% 25%
Hubei Muxin Detection
Technology Co., Ltd. /H1118/H1118/H1118III.2(2) 20% De-registered De-registered De-registered De-registered
Henan Muyuan New Energy
Industry Development
Co., Ltd. and its
subsidiaries /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118III.2(2) 20% 20% 20% 20% 20%
APPENDIX I ACCOUNTANTS’ REPORT
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Notes:
(i) Muyuan International (BVI) Limited is not subject to income tax under the relevant laws and regulations of
the British Virgin Islands.
(ii) Muyuan International Limited is subject to income tax rate of 16.5% under the relevant laws and regulations
of Hong Kong.
(iii) Hap Grain International Agricultural Trading Pte. Ltd. is subject to income tax rate of 17% under the relevant
laws and regulations of Singapore.
(iv) Muyuan Vietnam Company Limited is subject to income tax rate of 20% under the relevant laws and
regulations of Vietnam.
2 Preferential tax treatments
(1) VAT
In accordance with Article 15 of the Provisional Regulations of the PRC on VAT , self-produced agricultural
products sold by agricultural producers are exempted from V A T. During the Track Record Period, the Company and
its subsidiaries engaged in the production and sales of live hogs qualified as sales of self-produced agricultural
products, thereby benefiting from a V A T exemption policy.
Pursuant to the Notice of the MOF and the State Taxation Administration (the “SAT”) on VAT Exemption for
Feed Products (Cai Shui [2001] No. 121), the Company and its subsidiaries were entitled to V A T exemption for
qualifying feed and premix products sold during the Track Record Period.
According to the Announcement on Improving the VAT Policy for Comprehensive Utilisation of Resources
(Announcement [2021] No. 40) issued by the SA T, and other relevant regulations, entities engaged in sales of eligible
industrial-grade blended oil included in the Catalogue of Preferential V A T on Products and Services for
Comprehensive Utilisation of Resources is entitled to 70% refund of V A T upon collection. The Company and its
subsidiaries enjoyed this preferential treatment throughout the Track Record Period.
In accordance with Announcement on Relevant Policies for Deepening the Reform of VAT (Announcement
[2019] No. 39) issued by the MOF, the SA T and General Administration of Customs, certain subsidiaries were eligible
for an additional 10% deduction in the current deductible input tax from 1 April 2019 to 31 December 2021. The
implementation period was further extended to 31 December 2022 according to Announcement on Promoting the
Development of VAT Policies for Difficult Industries in the Service Sector (Announcement [2022] No. 11) issued by
the MOF and SA T. The Company’s subsidiaries, Henan Xinghua Biotechnology Co., Ltd. and Henan Hongxin
Detection Technology Co., Ltd., were subject to this preferential treatment during the year ended 31 December 2022.
According to Announcement of the MOF and the SAT on the Clarification of VAT Reduction and Exemption
for Small-Scale VAT Taxpayers and Other Policies (Announcement [2023] No. 1), the Company’s subsidiary, Henan
Hongxin Detection Technology Co., Ltd. was eligible to offset the V A T payable by an additional 5% of the deductible
input tax during the year ended 31 December 2023.
According to the Announcement on the Additional VAT Deduction Policy for Advanced Manufacturing
Enterprises (Announcement [2023] No. 43 of the MOF and the SA T), one subsidiary of the Group is eligible to offset
the V A T payable by an additional 5% of the deductible input tax of the current period as advanced manufacturing
enterprises from 1 January 2023 to 31 December 2027. The advanced manufacturing enterprise in the announcement
refers to a general taxpayer in the manufacturing industry, which is a high and new-tech enterprise. The Company’s
subsidiary, Henan Muyuan Smart Technology Co., Ltd., which is a high and new-tech enterprise, was subject to the
preferential treatment during the years ended 31 December 2023 and 2024 and the nine months ended 30 September
2025.
APPENDIX I ACCOUNTANTS’ REPORT
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(2) Income tax
Pursuant to the Enterprise Income Tax Law of the PRC and the Implementation Regulations for the Enterprise
Income Tax Law of the PRC, during the Track Record Period, income of the Company and its subsidiaries derived
from livestock husbandry and poultry farming, as well as hog slaughtering, were exempted from enterprise income
tax.
The Company’s subsidiary, Henan Muyuan Smart Technology Co., Ltd., obtained the high-tech enterprise
certification (certificate No. GR202241000434) on 1 December 2022 with a validity period of three years. According
to the preferential tax policies for high-tech enterprises in the Enterprise Income Tax Law of the PRC, the applicable
enterprise income tax rate of Henan Muyuan Smart Technology Co., Ltd. is 15% during each of the years ended 31
December 2022, 2023 and 2024. The directors of the Company are of the view that Henan Muyuan Smart Technology
Co., Ltd. is highly likely to obtain the renewal of the high-tech enterprise certification. Therefore, for the nine months
ended 30 September 2025, Henan Muyuan Smart Technology Co., Ltd. has pre-paid income tax by tax rate of 15%.
In accordance with the Announcement on Further Implementing Preferential Income Tax Policies for Small and
Micro Enterprises (Announcement [2022] No. 13), the Announcement on Income Tax Preferences for Small and
Micro Enterprises and Individual Businesses (Announcement [2023] No. 6), and Announcement on Further
Supporting the Development of Small and Micro Enterprises and Individual Businesses Related to Tax and Fee
Policies (Announcement [2023] No. 12), for small and micro enterprises with an annual taxable income less than
RMB3 million, 25% of the amount is included in the taxable income, and the applicable enterprise income tax rate
is 20%. During the Track Record Period, the Company’s subsidiaries, Shenzhen Muyuan Digital Technology Co.,
Ltd., Zhengzhou Muyuan Digital Technology Co., Ltd., Hubei Muxin Detection Technology Co., Ltd. (applicable for
the year ended 31 December 2022), Henan Muyuan Ecology Environment Technology Co., Ltd. (applicable for each
of the years ended 31 December 2022 and 2023), and Henan Muyuan New Energy Industry Development Co. Ltd.
together with its subsidiaries, benefited from these preferential policies.
(3) Others
In accordance with the Announcement of the MOF and the SAT on Relevant Tax and Fee Policies with Respect
to Further Supporting the Development of Small and Micro Enterprises and Individual Businesses (MOF and SA T
Announcement [2023] No. 12), from 1 January 2023 to 31 December 2027, for small-scale V A T taxpayers, small and
low-profit enterprises and individual businesses, resource tax (excluding water resource tax), urban maintenance and
construction tax, real estate tax, urban land use tax, stamp duty (excluding stamp duty on securities transaction),
cultivated land occupation tax and educational surcharges and local educational surcharges shall be reduced by half.
IV . NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
1 Cash at bank and on hand
As at 31 December As at 30 September
Item 2022 2023 2024 2025
Cash on hand /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111819,376.0 0–––
Deposits with banks /H1118/H1118/H1118/H1118/H111817,842,850,658.61 13,679,139,040.28 12,677,308,375.77 16,921,456,137.71
Other monetary funds /H1118/H1118/H1118/H11182,950,678,550.04 5,749,967,222.73 4,274,334,479.23 2,113,757,906.70
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111820,793,548,584.65 19,429,106,263.01 16,951,642,855.00 19,035,214,044.41
Including:
Total overseas deposits /H1118 8,441.72 157.31 3,567,919.93 6,389,091.71
APPENDIX I ACCOUNTANTS’ REPORT
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Cash at bank and on hand that has restriction of use:
As at 31 December As at 30 September
Item 2022 2023 2024 2025
Bank acceptance bill
deposit, loan deposit,
futures deposit, letter of
credit deposit, etc. /H1118/H1118/H1118/H11182,883,258,860.99 5,652,713,362.12 4,107,091,241.92 1,766,477,938.58
2 Financial assets held for trading
As at 31 December As at 30 September
Item 2022 2023 2024 2025
Financial assets at
FVTPL
Including:
Futures contracts /H1118/H1118/H1118/H1118316,500.00 21,184,000.00 2,886,840.00 1,885,816.33
Financial wealth
management
products /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – 2,206,410,328.32
Foreign exchange
forward and interest
rate swap contracts /H1118/H1118 2,725,036.82 – – –
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,041,536.82 21,184,000.00 2,886,840.00 2,208,296,144.65
3 Bills receivable
(1) Classification of bills receivable
As at 31 December As at 30 September
Item 2022 2023 2024 2025
Bank acceptance bills /H1118/H1118/H1118/H111860,000,000.00 129,090,000.00 152,900,000.00 208,473,480.50
All of the above bills are due within one year. There were no pledged bills of the Group at the end of each
reporting period.
(2) Outstanding endorsed or discounted bills that have not matured at the end of each reporting period
As at 31 December As at 30 September
2022 2023 2024 2025
Item
Amount
derecognised
at year end
Amount not
derecognised
at year end
Amount
derecognised
at year end
Amount not
derecognised
at year end
Amount
derecognised
at year end
Amount not
derecognised
at year end
Amount
derecognised
at period end
Amount not
derecognised
at period end
Bank
acceptance
bills /H1118/H1118/H1118/H111822,000,000.00 60,000,000.00 – 129,090,000.00 60,442,935.00 152,900,000.00 456,881,534.65 206,690,000.00
APPENDIX I ACCOUNTANTS’ REPORT
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4 Accounts receivable
(1) The ageing analysis of accounts receivable is as follows:
As at 31 December As at 30 September
2022 2023 2024 2025
Within 1 year (inclusive) /H1118 180,658,436.54 175,655,770.74 241,823,636.13 490,920,507.53
Over 1 year but within
2 years (inclusive) /H1118/H1118/H1118/H11186,206,850.05 12,491,664.11 1,483,342.28 86,659.61
Over 2 years but within
3 years (inclusive) /H1118/H1118/H1118/H1118 – 319,752.75 1,133,815.55 1,747,672.36
Over 3 years /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – 130,859.80
Subtotal /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118186,865,286.59 188,467,187.60 244,440,793.96 492,885,699.30
Less: Provision for bad
and doubtful debts /H1118/H1118/H1118/H111810,274,291.84 20,630,206.01 13,252,258.39 25,774,918.50
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118176,590,994.75 167,836,981.59 231,188,535.57 467,110,780.80
The ageing is counted starting from the date when accounts receivable is recognised.
(2) Accounts receivable by provision method
As at 31 December 2022
Book value
Provision for bad
and doubtful debts
Carrying amountAmount
Percentage
(%) Amount
Percentage
(%)
Individual assessment /H1118/H1118/H1118/H1118/H1118/H1118–– –– –
Collective assessment /H1118/H1118/H1118/H1118/H1118/H1118186,865,286.59 100.00 10,274,291.84 5.50 176,590,994.75
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118186,865,286.59 100.00 10,274,291.84 176,590,994.75
As at 31 December 2023
Book value
Provision for bad
and doubtful debts
Carrying amountAmount
Percentage
(%) Amount
Percentage
(%)
Individual assessment /H1118/H1118/H1118/H1118/H1118/H111811,606,417.63 6.16 11,606,417.63 100.00 –
Collective assessment /H1118/H1118/H1118/H1118/H1118/H1118176,860,769.97 93.84 9,023,788.38 5.10 167,836,981.59
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118188,467,187.60 100.00 20,630,206.01 167,836,981.59
As at 31 December 2024
Book value
Provision for bad
and doubtful debts
Carrying amountAmount
Percentage
(%) Amount
Percentage
(%)
Individual assessment /H1118/H1118/H1118/H1118/H1118/H1118595,000.00 0.24 595,000.00 100.00 –
Collective assessment /H1118/H1118/H1118/H1118/H1118/H1118243,845,793.96 99.76 12,657,258.39 5.19 231,188,535.57
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118244,440,793.96 100.00 13,252,258.39 231,188,535.57
APPENDIX I ACCOUNTANTS’ REPORT
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--- page 531 ---
As at 30 September 2025
Book value
Provision for bad
and doubtful debts
Carrying amountAmount
Percentage
(%) Amount
Percentage
(%)
Individual assessment /H1118/H1118/H1118/H1118/H1118/H1118413,729.81 0.08 413,729.81 100.00 –
Collective assessment /H1118/H1118/H1118/H1118/H1118/H1118492,471,969.49 99.92 25,361,188.69 5.15 467,110,780.80
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118492,885,699.30 100.00 25,774,918.50 467,110,780.80
Collective assessment and assessment of ECL:
At all times, the Group measures impairment loss for accounts receivable at an amount equal to lifetime ECLs,
and the ECLs are based on the ageing and the expected credit loss rate.
As at 31 December 2022
Book value
Expected credit
loss rate (%)
Provision for bad and
doubtful debts
Within 1 year (inclusive) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118180,658,436.54 5.00 9,032,921.83
Over 1 year but within 2 years (inclusive) /H1118/H1118/H11186,206,850.05 20.00 1,241,370.01
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118186,865,286.59 10,274,291.84
As at 31 December 2023
Book value
Expected credit
loss rate (%)
Provision for bad and
doubtful debts
Within 1 year (inclusive) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118175,655,770.74 5.00 8,782,788.53
Over 1 year but within 2 years (inclusive) /H1118/H1118/H11181,204,999.23 20.00 240,999.85
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118176,860,769.97 9,023,788.38
As at 31 December 2024
Book value
Expected credit
loss rate (%)
Provision for bad and
doubtful debts
Within 1 year (inclusive) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118241,823,636.13 5.00 12,091,182.15
Over 1 year but within 2 years (inclusive) /H1118/H1118/H11181,483,342.28 20.00 296,668.46
Over 2 years but within 3 years (inclusive) /H1118/H1118 538,815.55 50.00 269,407.78
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118243,845,793.96 12,657,258.39
As at 30 September 2025
Book value
Expected credit loss
rate (%)
Provision for bad and
doubtful debts
Within 1 year (inclusive) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118490,920,507.53 5.00 24,546,025.69
Over 1 year but within 2 years (inclusive) /H1118/H1118/H1118 86,659.61 20.00 17,331.92
Over 2 years but within 3 years (inclusive) /H1118/H1118 1,333,942.55 50.00 666,971.28
Over 3 years /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118130,859.80 100.00 130,859.80
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118492,471,969.49 25,361,188.69
The expected credit loss rate is determined based on historical credit loss experience, and is adjusted for
differences in economic conditions during the historical period, current economic conditions and anticipated
economic conditions during the expected lifetime.
APPENDIX I ACCOUNTANTS’ REPORT
– I-53 –


--- page 532 ---
(3) Movements of provisions for bad and doubtful debts:
Y ear ended 31 December
Nine months
ended 30 September
2022 2023 2024 2025
As at 1 January /H1118/H1118/H1118/H1118/H1118/H1118/H11187,134,280.47 10,274,291.84 20,630,206.01 13,252,258.39
Additions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,140,011.37 10,355,914.17 3,333,470.01 12,522,660.11
Written-offs /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – (10,711,417.63) –
As at 31 December/
30 September /H1118/H1118/H1118/H1118/H1118/H1118/H111810,274,291.84 20,630,206.01 13,252,258.39 25,774,918.50
(4) Five largest debtors by accounts receivable at the end of each reporting period
As at 31 December 2022
Book value
Percentage of the
total balance (%)
Provision for bad and
doubtful debts
First /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111817,390,997.60 9.31 869,549.88
Second /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111813,868,516.40 7.42 693,425.82
Third /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111810,691,664.88 5.72 534,583.24
Fourth /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111810,530,958.93 5.64 526,547.95
Fifth /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111810,490,656.65 5.61 524,532.83
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111862,972,794.46 33.70 3,148,639.72
As at 31 December 2023
Book value
Percentage of the
total balance (%)
Provision for bad and
doubtful debts
First /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111822,719,135.10 12.05 1,135,956.76
Second /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111812,380,440.78 6.57 619,022.04
Third /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111811,924,392.18 6.33 596,219.61
Fourth /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111810,691,664.88 5.67 10,691,664.88
Fifth /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11189,120,511.95 4.84 456,025.60
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111866,836,144.89 35.46 13,498,888.89
As at 31 December 2024
Book value
Percentage of the
total balance (%)
Provision for bad and
doubtful debts
First /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111821,157,148.89 8.66 1,057,857.44
Second /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111812,447,570.91 5.09 622,378.55
Third /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11188,506,629.23 3.48 425,331.46
Fourth /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11188,186,439.56 3.35 409,321.98
Fifth /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11187,354,459.95 3.01 367,723.00
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111857,652,248.54 23.59 2,882,612.43
APPENDIX I ACCOUNTANTS’ REPORT
– I-54 –


--- page 533 ---
As at 30 September 2025
Book value
Percentage of the
total balance (%)
Provision for bad and
doubtful debts
First /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111853,187,106.77 10.79 2,659,355.34
Second /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111844,876,555.00 9.10 2,243,827.75
Third /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111826,962,694.32 5.47 1,348,134.72
Fourth /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111818,871,184.75 3.83 943,559.24
Fifth /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111816,046,796.96 3.26 802,339.85
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118159,944,337.80 32.45 7,997,216.90
5 Prepayments
(1) The ageing analysis of prepayments is as follows:
As at 31 December As at 30 September
2022 2023 2024 2025
Amount
Percentage
(%) Amount
Percentage
(%) Amount
Percentage
(%) Amount
Percentage
(%)
Within 1 year (inclusive) /H1118/H1118/H11182,078,485,787.65 98.90 507,575,069.69 94.86 500,546,106.43 95.46 449,660,843.86 93.35
Over 1 year but within
2 years (inclusive) /H1118/H1118/H1118/H1118/H111819,636,351.72 0.94 14,580,735.15 2.73 13,505,743.75 2.58 18,343,374.86 3.81
Over 2 years but within
3 years (inclusive) /H1118/H1118/H1118/H1118/H11183,417,016.00 0.16 9,625,654.70 1.80 7,315,458.07 1.40 5,276,744.81 1.10
Over 3 years /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 3,268,901.58 0.61 2,980,543.00 0.56 8,391,096.62 1.74
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,101,539,155.37 100.00 535,050,361.12 100.00 524,347,851.25 100.00 481,672,060.15 100.00
The ageing is counted starting from the date when prepayments are recognised.
(2) Five largest debtors by prepayments at the end of each reporting period
As at 31 December 2022, 2023 and 2024 and 30 September 2025, the total prepayments of the five largest
debtors of the Group were RMB852,030,585.27, RMB180,763,566.89, RMB147,827,525.44 and
RMB101,814,720.26, respectively, representing 40.54%, 33.79%, 28.19% and 21.14% of the total prepayments,
respectively.
6 Other receivables
As at 31 December As at 30 September
Note 2022 2023 2024 2025
Dividends
receivable /H1118/H1118(1) – 960,262.02 – –
Others /H1118/H1118/H1118/H1118/H1118/H1118(2) 492,775,020.47 174,587,413.60 90,551,665.56 57,524,966.20
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118492,775,020.47 175,547,675.62 90,551,665.56 57,524,966.20
APPENDIX I ACCOUNTANTS’ REPORT
– I-55 –


--- page 534 ---
(1) Dividends receivable
(a) Dividends receivable by category
As at 31 December As at 30 September
2022 2023 2024 2025
Guangdong Guangken
Muyuan Livestock
Husbandry Co., Ltd. /H1118/H1118/H1118/H1118 – 960,262.02 – –
(2) Others
(a) Others categorised by nature
As at 31 December As at 30 September
2022 2023 2024 2025
Security deposits /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118525,650,354.79 201,053,101.54 110,352,283.62 74,855,858.14
Other deposits /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118212,656.82 432,200.00 208,963.17 3,188,592.02
Subtotal /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118525,863,011.61 201,485,301.54 110,561,246.79 78,044,450.16
Less: Provision for bad and
doubtful debts /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111833,087,991.14 26,897,887.94 20,009,581.23 20,519,483.96
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118492,775,020.47 174,587,413.60 90,551,665.56 57,524,966.20
(b) The ageing analysis is as follows:
As at 31 December As at 30 September
2022 2023 2024 2025
Within 1 year (inclusive) /H1118/H1118/H1118502,767,161.87 129,520,488.90 87,576,574.28 52,233,171.87
Over 1 year but within 2
years (inclusive) /H1118/H1118/H1118/H1118/H1118/H1118/H111815,585,645.14 57,048,500.84 4,050,091.72 5,291,433.07
Over 2 years but within 3
years (inclusive) /H1118/H1118/H1118/H1118/H1118/H1118/H11185,355,401.16 11,808,297.04 8,227,693.35 7,340,612.99
Over 3 years /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,154,803.44 3,108,014.76 10,706,887.44 13,179,232.23
Subtotal /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118525,863,011.61 201,485,301.54 110,561,246.79 78,044,450.16
Less: Provision for bad and
doubtful debts /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111833,087,991.14 26,897,887.94 20,009,581.23 20,519,483.96
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118492,775,020.47 174,587,413.60 90,551,665.56 57,524,966.20
The ageing is counted starting from the date when other receivables are recognised.
APPENDIX I ACCOUNTANTS’ REPORT
– I-56 –


--- page 535 ---
(c) Others by provision method
As at 31 December 2022
Book value
Provision for bad and
doubtful debts
Carrying amountAmount
Percentage
(%) Amount
Percentage
(%)
Individual assessment /H1118/H1118/H1118/H1118/H1118/H1118–– –– –
Collective assessment /H1118/H1118/H1118/H1118/H1118/H1118525,863,011.61 100.00 33,087,991.14 6.29 492,775,020.47
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118525,863,011.61 100.00 33,087,991.14 492,775,020.47
As at 31 December 2023
Book value
Provision for bad and
doubtful debts
Carrying amountAmount
Percentage
(%) Amount
Percentage
(%)
Individual assessment /H1118/H1118/H1118/H1118/H1118/H1118–– –– –
Collective assessment /H1118/H1118/H1118/H1118/H1118/H1118201,485,301.54 100.00 26,897,887.94 13.35 174,587,413.60
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118201,485,301.54 100.00 26,897,887.94 174,587,413.60
As at 31 December 2024
Book value
Provision for bad and
doubtful debts
Carrying amountAmount
Percentage
(%) Amount
Percentage
(%)
Individual assessment /H1118/H1118/H1118/H1118/H1118/H1118–– –– –
Collective assessment /H1118/H1118/H1118/H1118/H1118/H1118110,561,246.79 100.00 20,009,581.23 18.10 90,551,665.56
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118110,561,246.79 100.00 20,009,581.23 90,551,665.56
As at 30 September 2025
Book value
Provision for bad and
doubtful debts
Carrying amountAmount
Percentage
(%) Amount
Percentage
(%)
Individual assessment /H1118/H1118/H1118/H1118/H1118/H1118–– –– –
Collective assessment /H1118/H1118/H1118/H1118/H1118/H111878,044,450.16 100.00 20,519,483.96 26.29 57,524,966.20
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111878,044,450.16 100.00 20,519,483.96 57,524,966.20
APPENDIX I ACCOUNTANTS’ REPORT
– I-57 –


--- page 536 ---
(d) Movements of provisions for bad and doubtful debts
Stage 1 Stage 2 Stage 3
Total12-month ECL
Lifetime ECL –
Not credit impaired
Lifetime ECL –
Credit impaired
As at 1 January 2022 /H1118/H1118/H1118/H1118/H1118/H111817,383,224.28 – – 17,383,224.28
Transfer to stage 3 /H1118/H1118/H1118/H1118/H1118/H1118/H1118(4,261,137.66) – 4,261,137.66 –
Additions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111819,965,904.52 – – 19,965,904.52
Written-offs /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – (4,261,137.66) (4,261,137.66)
As at 31 December 2022 /H1118/H1118/H1118/H111833,087,991.14 – – 33,087,991.14
Transfer to stage 3 /H1118/H1118/H1118/H1118/H1118/H1118/H1118––––
Reversals /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(6,190,103.20) – – (6,190,103.20)
Written-offs /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118––––
As at 31 December 2023 /H1118/H1118/H1118/H111826,897,887.94 – – 26,897,887.94
Transfer to stage 3 /H1118/H1118/H1118/H1118/H1118/H1118/H1118(3,271,143.86) – 3,271,143.86 –
Reversals /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(3,617,162.85) – – (3,617,162.85)
Written-offs /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – (3,271,143.86) (3,271,143.86)
As at 31 December 2024 /H1118/H1118/H1118/H111820,009,581.23 – – 20,009,581.23
Transfer to stage 3 /H1118/H1118/H1118/H1118/H1118/H1118/H1118––––
Additions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118509,902.73 – – 509,902.73
Written-offs /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118––––
As at 30 September 2025 /H1118/H1118/H111820,519,483.96 – – 20,519,483.96
(e) Provisions for bad and doubtful debts
Group of security deposits and other deposits
Y ear ended 31 December
Nine months
ended
30 September
2022 2023 2024 2025
As at 1 January /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111817,383,224.28 33,087,991.14 26,897,887.94 20,009,581.23
Additions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111819,965,904.52 – – 509,902.73
Reversals /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– (6,190,103.20) (3,617,162.85) –
Written-offs /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(4,261,137.66) – (3,271,143.86) –
Other movements /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118––––
As at 31 December/30 September /H1118/H111833,087,991.14 26,897,887.94 20,009,581.23 20,519,483.96
(f) Five largest debtors by other receivables at the end of each reporting period
As at 31 December 2022
Nature of the
receivable Book value Ageing
Percentage of
ending balance
of others
(%)
Provision for bad
and doubtful debts
First /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Security deposits 165,684,318.25 Within 1 year 31.51 8,284,215.91
Second /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Security deposits 70,950,000.00 Within 1 year 13.49 3,547,500.00
Third /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Security deposits 62,628,315.00 Within 1 year 11.91 3,131,415.75
Fourth /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Security deposits 50,890,000.00 Within 1 year 9.68 2,544,500.00
Fifth /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Security deposits 40,725,520.00 Within 1 year 7.74 2,036,276.00
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118390,878,153.25 74.33 19,543,907.66
APPENDIX I ACCOUNTANTS’ REPORT
– I-58 –


--- page 537 ---
As at 31 December 2023
Nature of the
receivable Book value Ageing
Percentage of ending
balance of others
(%)
Provision for bad
and doubtful debts
First /H1118/H1118/H1118/H1118/H1118/H1118Security deposits 71,674,457.00 Within 1 year/
Over 1 year but
within 2 years
35.57 10,398,284.20
Second /H1118/H1118/H1118/H1118Security deposits 26,313,205.63 Within 1 year 13.06 1,315,660.28
Third /H1118/H1118/H1118/H1118/H1118Security deposits 18,453,000.00 Within 1 year 9.16 922,650.00
Fourth /H1118/H1118/H1118/H1118/H1118Security deposits 12,034,000.00 Within 1 year 5.97 601,700.00
Fifth /H1118/H1118/H1118/H1118/H1118/H1118Security deposits 7,918,240.00 Within 1 year 3.93 395,912.00
Total /H1118/H1118/H1118/H1118/H1118/H1118 136,392,902.63 67.69 13,634,206.48
As at 31 December 2024
Nature of the
receivable Book value Ageing
Percentage of ending
balance of others
(%)
Provision for bad
and doubtful debts
First /H1118/H1118/H1118/H1118/H1118/H1118Security deposits 26,434,294.27 Within 1 year 23.91 1,321,714.71
Second /H1118/H1118/H1118/H1118Security deposits 19,972,980.00 Within 1 year 18.07 998,649.00
Third /H1118/H1118/H1118/H1118/H1118Security deposits 19,410,000.00 Within 1 year 17.56 970,500.00
Fourth /H1118/H1118/H1118/H1118/H1118Security deposits 3,801,654.39 Over 2 years but
within 3 years
3.44 1,900,827.20
Fifth /H1118/H1118/H1118/H1118/H1118/H1118Security deposits 2,054,600.00 Over 3 years 1.85 2,054,600.00
Total /H1118/H1118/H1118/H1118/H1118/H1118 71,673,528.66 64.83 7,246,290.91
As at 30 September 2025
Nature of the
receivable Book value Ageing
Percentage of ending
balance of others
(%)
Provision for bad
and doubtful debts
First /H1118/H1118/H1118/H1118/H1118/H1118Security deposits 9,610,000.00 Within 1 year 16.71 480,500.00
Second /H1118/H1118/H1118/H1118Security deposits 5,213,760.00 Within 1 year 9.06 260,688.00
Third /H1118/H1118/H1118/H1118/H1118Security deposits 5,000,000.00 Within 1 year 8.69 250,000.00
Fourth /H1118/H1118/H1118/H1118/H1118Security deposits 4,060,240.00 Within 1 year 7.06 203,012.00
Fifth /H1118/H1118/H1118/H1118/H1118/H1118Security deposits 4,030,000.00 Within 1 year 7.01 201,500.00
Total /H1118/H1118/H1118/H1118/H1118/H1118 27,914,000.00 48.53 1,395,700.00
7 Inventories
(1) Inventories by category
As at 31 December As at 30 September
2022 2023 2024 2025
Book value
Provision for
impairment of
inventories
Carrying
amount Book value
Provision for
impairment of
inventories
Carrying
amount Book value
Provision for
impairment of
inventories
Carrying
amount Book value
Provision for
impairment
of inventories
Carrying
amount
Raw materials /H1118 9,138,515,932.09 – 9,138,515,932.09 8,025,727,598.32 – 8,025,727,598.32 8,336,495,928.55 – 8,336,495,928.55 5,469,652,277.77 – 5,469,652,2 77.77
Finished goods /H1118 614,957,866.87 – 614,957,866.87 1,298,226,258.93 43,095,052.41 1,255,131,206.52 565,504,572.73 621,043.09 564,883,529.64 1,081,673,183.9 1 1,160,505.51 1,080,512,678.40
Consumable
biological
assets /H1118/H1118/H111828,498,245,305.64 – 28,498,245,305.64 32,809,335,177.86 159,381,063.53 32,649,954,114.33 33,068,458,998.46 – 33,068,458,998.46 29,970,12 4,368.88 – 29,970,124,368.88
Total /H1118/H1118/H111838,251,719,104.60 – 38,251,719,104.60 42,133,289,035.11 202,476,115.94 41,930,812,919.17 41,970,459,499.74 621,043.09 41,969,838,456.65 36,521,449,830.56 1,160,505.51 36,520,289,325.05
APPENDIX I ACCOUNTANTS’ REPORT
– I-59 –


--- page 538 ---
(2) Provision for impairment of inventories
As at
1 January
2022 and
31 December
2022 Additions
Reversals or
transfers out
As at
31 December
2023 Additions
Reversals or
transfers out
As at
31 December
2024 Additions
Reversals or
transfers out
As at
30 September
2025
Finished goods /H1118 – 43,095,052.41 – 43,095,052.41 29,555,907.89 72,029,917.21 621,043.09 3,120,050.44 2,580,588.02 1,160,505.51
Consumable
biological
assets /H1118/H1118/H1118 – 159,381,063.53 – 159,381,063.53 – 159,381,063.53 ––––
Total /H1118/H1118/H1118/H1118 – 202,476,115.94 – 202,476,115.94 29,555,907.89 231,410,980.74 621,043.09 3,120,050.44 2,580,588.02 1,160,505.51
8 Other current assets
Item
As at 31 December As at 30 September
2022 2023 2024 2025
Deductible input V A T /H1118/H1118/H1118/H1118/H1118/H1118561,863,945.19 922,184,410.53 956,149,278.07 994,162,359.88
Insurance expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111893,754,649.12 212,465,633.20 264,882,692.24 216,321,834.84
Rental fees /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111833,447,226.44 56,944,785.42 33,967,117.54 66,196,523.92
Prepayments for costs incurred
in connection with the
proposed initial offering of
H shares of the Company
(i) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118––––
Financing issuance fees /H1118/H1118/H1118/H1118/H111810,067,554.86 366,900.00 – 35,448,577.42
Others /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 2,209,036.56 140,245,913.97 263,627,169.62
Subtotal /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118699,133,375.61 1,194,170,765.71 1,395,245,001.82 1,575,756,465.68
Less: Provision for
impairment /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118––––
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118699,133,375.61 1,194,170,765.71 1,395,245,001.82 1,575,756,465.68
Note:
(i) The balance as at 30 September 2025 will be transferred to the capital reserve account within equity
upon the listing of H Shares of the Company on The Stock Exchange of Hong Kong Limited.
9 Long-term equity investments
(1) Long-term equity investments by category:
Item
As at 31 December As at 30 September
2022 2023 2024 2025
Investments in associates /H1118/H1118/H1118581,847,949.59 718,748,080.54 903,747,850.94 939,196,502.07
Less: Provision for
impairment /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118––––
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118581,847,949.59 718,748,080.54 903,747,850.94 939,196,502.07
APPENDIX I ACCOUNTANTS’ REPORT
– I-60 –


--- page 539 ---
(2) Movements of long-term equity investments during the Track Record Period are as follows:
Y ear ended 31 December 2022
As at
1 January
Increase in
capital
Decrease in
capital
Investment
income/(losses)
recognised
under the
equity method
Adjustments
to other
comprehensive
income
Other equity
movements
Declared
distribution of
cash dividends
or profits
Provision for
impairment Others
As at
31 December
Balance of
provision for
impairment
as at
31 December
Associates
Henan Longda Muyuan
Meat Co., Ltd. /H1118/H1118/H1118/H1118/H1118/H1118102,134,325.13 – – 23,241,990.0 8––––– 125,376,315.21 –
China Securities Jiaotong
Fund Management
Co., Ltd. /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111860,936,787.04 – – (1,138,012.60) ––––– 5 9 , 7 98,774.44 –
Guangdong Guangken
Muyuan Livestock
Husbandry Co., Ltd. /H1118/H1118/H111848,499,819.07 71,400,000.00 – 2,034,730.6 6––––– 121,934,549.73 –
Rongtong Nongfa Muyuan
(Chongzhou) Co., Ltd. /H1118/H111858,732,560.44 – – 13,826,090.6 2––––– 7 2 , 5 58,651.06 –
Rongtong Nongfa Muyuan
(Tangshan) Livestock
Husbandry Co., Ltd. /H1118/H1118/H111822,131,137.27 61,250,000.00 – 276,241.7 0––––– 8 3 , 6 57,378.97 –
Rongtong Nongfa Muyuan
(Jianyang) Co., Ltd. /H1118/H1118/H111814,710,866.53 44,100,000.00 – 464,598.1 5––––– 5 9 , 2 75,464.68 –
Zhongmu Muyuan (Henan)
Biological Pharmaceutical
Co., Ltd. /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 57,600,000.00 – (282,191.95) ––––– 5 7 , 3 17,808.05 –
Henan Lianmu V eterinary
Medicine Co., Ltd. /H1118/H1118/H1118/H1118 – 2,000,000.00 – (70,992.55) ––––– 1 , 9 29,007.45 –
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118307,145,495.48 236,350,000.00 – 38,352,454.1 1––––– 581,847,949.59 –
APPENDIX I ACCOUNTANTS’ REPORT
– I-61 –


--- page 540 ---
Y ear ended 31 December 2023
As at
1 January
Increase in
capital
Decrease in
capital
Investment
income/(losses)
recognised
under the
equity method
Adjustments
to other
comprehensive
income
Other equity
movements
Declared
distribution of
cash dividends
or profits
Provision for
impairment Others
As at
31 December
Balance of
provision for
impairment
as at
31 December
Associates
Henan Longda Muyuan
Meat Co., Ltd. /H1118/H1118/H1118/H1118/H1118/H1118125,376,315.21 – – (7,789,778.76) ––––– 1 1 7 , 586,536.45 –
China Securities Jiaotong
Fund Management
Co., Ltd. /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111859,798,774.44 – – (5,099,564.88) ––––– 5 4 , 6 99,209.56 –
Guangdong Guangken
Muyuan Livestock
Husbandry Co., Ltd. /H1118/H1118/H1118121,934,549.73 81,600,000.00 – (6,948,676.91) – – (960,262.02) – – 195,625,610.80 –
Rongtong Nongfa Muyuan
(Chongzhou) Co., Ltd. /H1118/H111872,558,651.06 – – (6,248,320.06) ––––– 6 6 , 3 10,331.00 –
Rongtong Nongfa Muyuan
(Tangshan) Livestock
Husbandry Co., Ltd. /H1118/H1118/H111883,657,378.97 – – 42,531.1 6––––– 8 3 , 6 99,910.13 –
Rongtong Nongfa Muyuan
(Jianyang) Co., Ltd. /H1118/H1118/H111859,275,464.68 – – 233,363.1 0––––– 5 9 , 5 08,827.78 –
Zhongmu Muyuan (Henan)
Biological Pharmaceutical
Co., Ltd. /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111857,317,808.05 – – 8,168.7 7––––– 5 7 , 3 25,976.82 –
Henan Lianmu V eterinary
Medicine Co., Ltd. /H1118/H1118/H1118/H11181,929,007.45 12,000,000.00 – (505,619.71) ––––– 1 3 , 4 23,387.74 –
Nanyang Longyuan New
Energy Technology
Co., Ltd. /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 45,000,000.00 – 1,115,139.3 4––––– 4 6 , 1 1 5,139.34 –
Henan Qianmu Biological
Pharmaceutical Co., Ltd. /H1118 – 24,500,000.00 – (46,849.08) ––––– 2 4 , 4 53,150.92 –
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118581,847,949.59 163,100,000.00 – (25,239,607.03) – – (960,262.02) – – 718,748,080.54 –
APPENDIX I ACCOUNTANTS’ REPORT
– I-62 –


--- page 541 ---
Y ear ended 31 December 2024
As at
1 January
Increase in
capital
Decrease in
capital
Investment
income/(losses)
recognised
under the
equity method
Adjustments
to other
comprehensive
income
Other equity
movements
Declared
distribution of
cash dividends
or profits
Provision for
impairment Others
As at
31 December
Balance of
provision for
impairment
as at
31 December
Associates
Henan Longda Muyuan
Meat Co., Ltd. /H1118/H1118/H1118/H1118/H1118/H1118117,586,536.45 – – (4,393,194.19) ––––– 1 1 3 , 193,342.26 –
China Securities Jiaotong
Fund Management
Co., Ltd. /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111854,699,209.56 – – 713,879.3 2––––– 5 5 , 4 13,088.88 –
Guangdong Guangken
Muyuan Livestock
Husbandry Co., Ltd. /H1118/H1118/H1118195,625,610.80 74,800,000.00 – 55,259,030.1 7––––– 325,684,640.97 –
Rongtong Nongfa Muyuan
(Chongzhou) Co., Ltd. /H1118/H111866,310,331.00 – – 3,318,951.7 5––––– 6 9 , 6 29,282.75 –
Rongtong Nongfa Muyuan
(Tangshan) Livestock
Husbandry Co., Ltd. /H1118/H1118/H111883,699,910.13 – – 57,445.8 1––––– 8 3 , 7 57,355.94 –
Rongtong Nongfa Muyuan
(Jianyang) Co., Ltd. /H1118/H1118/H111859,508,827.78 – – (2,946,157.57) ––––– 5 6 , 5 62,670.21 –
Zhongmu Muyuan (Henan)
Biological Pharmaceutical
Co., Ltd. /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111857,325,976.82 – – 1,722,892.8 6––––– 5 9 , 0 48,869.68 –
Henan Lianmu V eterinary
Medicine Co., Ltd. /H1118/H1118/H1118/H111813,423,387.74 36,000,000.00 – (1,695,846.17) ––––– 4 7 , 7 27,541.57 –
Nanyang Longyuan New
Energy Technology
Co., Ltd. /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111846,115,139.34 – – 7,864,718.8 7––––– 5 3 , 9 79,858.21 –
Henan Qianmu Biological
Pharmaceutical Co., Ltd. /H111824,453,150.92 – – (383,604.63) ––––– 2 4 , 0 69,546.29 –
Fengyi Muyuan Oil
Technology (Nanyang)
Co., Ltd. /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 14,700,000.00 – (18,345.82) ––––– 1 4 , 6 81,654.18 –
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118718,748,080.54 125,500,000.00 – 59,499,770.4 0––––– 903,747,850.94 –
APPENDIX I ACCOUNTANTS’ REPORT
– I-63 –


--- page 542 ---
Nine months ended 30 September 2025
As at
1 January
Increase in
capital
Decrease in
capital
Investment
(losses)/income
recognised
under the
equity method
Adjustments
to other
comprehensive
income
Other equity
movements
Declared
distribution of
cash dividends
or profits
Provision for
impairment Others
As at
30 September
Balance of
provision for
impairment
as at
30 September
Associates
Henan Longda Muyuan
Meat Co., Ltd. /H1118/H1118/H1118/H1118/H1118/H1118113,193,342.26 – – (7,575,341.10) ––––– 105,618,001.16 –
China Securities Jiaotong
Fund Management
Co., Ltd. /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111855,413,088.88 – – (1,289,951.85) ––––– 5 4 , 1 23,137.03 –
Guangdong Guangken
Muyuan Livestock
Husbandry Co., Ltd. /H1118/H1118/H1118325,684,640.97 – – 47,515,649.64 – – (42,432,549.71) – – 330,767,740.90 –
Rongtong Nongfa Muyuan
(Chongzhou) Co., Ltd. /H1118/H111869,629,282.75 – – 6,788,780.8 4––––– 7 6 , 4 18,063.59 –
Rongtong Nongfa Muyuan
(Tangshan) Livestock
Husbandry Co., Ltd. /H1118/H1118/H111883,757,355.94 – – (4,666,948.73) ––––– 7 9 , 0 90,407.21 –
Rongtong Nongfa Muyuan
(Jianyang) Co., Ltd. /H1118/H1118/H111856,562,670.21 – – 2,708,149.0 4––––– 5 9 , 2 70,819.25 –
Zhongmu Muyuan (Henan)
Biological Pharmaceutical
Co., Ltd. /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111859,048,869.68 – – (1,307,095.42) ––––– 5 7 , 7 41,774.26 –
Henan Lianmu V eterinary
Medicine Co., Ltd. /H1118/H1118/H1118/H111847,727,541.57 – – (1,846,811.33) ––––– 4 5 , 8 80,730.24 –
Nanyang Longyuan New
Energy Technology
Co., Ltd. /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111853,979,858.21 – – 9,087,503.2 2––––– 6 3 , 0 67,361.43 –
Henan Qianmu Biological
Pharmaceutical Co., Ltd. /H111824,069,546.29 24,500,000.00 – (213,380.14) ––––– 4 8 , 3 56,166.15 –
Fengyi Muyuan Oil
Technology (Nanyang)
Co., Ltd. /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111814,681,654.18 – – (335,776.77) ––––– 1 4 , 3 45,877.41 —
Fangcheng Y ushengyuan
Livestock Husbandry
Co., Ltd. /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 5,000,000.00 – (483,576.56) ––––– 4 , 5 16,423.44 –
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118903,747,850.94 29,500,000.00 – 48,381,200.84 – – (42,432,549.71) – – 939,196,502.07 –
APPENDIX I ACCOUNTANTS’ REPORT
– I-64 –


--- page 543 ---
10 Investments in other equity instruments
Y ear ended 31 December 2022
As at
1 January
Additional
investments
Reduction in
investments
Gains included
in other
comprehensive
income during
the year
Losses
included in
other
comprehensive
income during
the year Others
As at
31 December
Dividend
income
recognised
during the
year
Accumulated
gains included
in other
comprehensive
income
Accumulated
losses included
in other
comprehensive
income
Reason for
designation
Nanyang Wolong Rural
Credit Cooperative
Association /H1118/H1118/H1118/H1118/H1118/H1118/H1118
143,000,000.00 – – – – – 143,000,000.0 0––– M aintaining a
long-term
investment
for strategic
reasons
Y ear ended 31 December 2023
As at
1 January
Additional
investments
Reduction in
investments
Gains included
in other
comprehensive
income during
the year
Losses
included in
other
comprehensive
income during
the year Others
As at
31 December
Dividend
income
recognised
during the
year
Accumulated
gains included
in other
comprehensive
income
Accumulated
losses included
in other
comprehensive
income
Reason for
designation
Nanyang Wolong Rural
Credit Cooperative
Association /H1118/H1118/H1118/H1118/H1118/H1118/H1118
143,000,000.00 – – – (36,475,405.75) – 106,524,594.25 – – (36,475,405.75) Maintaining a
long-term
investment
for strategic
reasons
APPENDIX I ACCOUNTANTS’ REPORT
– I-65 –


--- page 544 ---
Y ear ended 31 December 2024
As at
1 January
Additional
investments
Reduction in
investments
Gains included
in other
comprehensive
income during
the year
Losses
included in
other
comprehensive
income during
the year Others
As at
31 December
Dividend
income
recognised
during the
year
Accumulated
gains included
in other
comprehensive
income
Accumulated
losses included
in other
comprehensive
income
Reason for
designation
Nanyang Wolong Rural
Credit Cooperative
Association /H1118/H1118/H1118/H1118/H1118/H1118/H1118
106,524,594.25 – – – – – 106,524,594.25 – – (36,475,405.75) Maintaining a
long-term
investment
for strategic
reasons
Nine months ended 30 September 2025
As at
1 January
Additional
investments
Reduction in
investments
Gains included
in other
comprehensive
income during
the period
Losses
included in
other
comprehensive
income during
the period Others
As at
30 September
Dividend
income
recognised
during the
period
Accumulated
gains included
in other
comprehensive
income
Accumulated
losses included
in other
comprehensive
income
Reason for
designation
Nanyang Wolong Rural
Credit Cooperative
Association /H1118/H1118/H1118/H1118/H1118/H1118/H1118
106,524,594.25 – – – (17,792,568.62) – 88,732,025.63 – – (54,267,974.37) Maintaining a
long-term
investment
for strategic
reasons
APPENDIX I ACCOUNTANTS’ REPORT
– I-66 –


--- page 545 ---
11 Investment properties
Plant & buildings Land use rights Total
Cost
As at 1 January 2022 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118156,136,596.47 7,011,575.31 163,148,171.78
Additions
– Transfers from fixed assets/construction in
progress /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11189,579,564.67 – 9,579,564.67
Decreases
– Transfers out to fixed assets/intangible assets /H111827,230,074.70 1,184,804.76 28,414,879.46
As at 31 December 2022 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118138,486,086.44 5,826,770.55 144,312,856.99
Additions
– Transfers from fixed assets/construction in
progress /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,679,691.55 – 1,679,691.55
– Transfers from intangible assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 263,750.02 263,750.02
Decreases
– Transfers out to fixed assets/intangible assets /H111816,744,788.02 304,980.88 17,049,768.90
As at 31 December 2023 and 2024 and
30 September 2025 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118123,420,989.97 5,785,539.69 129,206,529.66------------ ------------ ------------
Accumulated depreciation
As at 1 January 2022 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11189,681,747.23 1,551,162.02 11,232,909.25
Additions
– Charge for the year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11186,748,806.30 146,382.47 6,895,188.77
– Transfers from fixed assets/intangible assets /H1118/H11182,317,204.85 – 2,317,204.85
Decreases
– Transfers out to fixed assets/intangible assets /H1118 1,401,214.26 268,392.06 1,669,606.32
As at 31 December 2022 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111817,346,544.12 1,429,152.43 18,775,696.55
Additions
– Charge for the year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11186,590,859.28 143,613.21 6,734,472.49
– Transfers from fixed assets/intangible assets /H1118/H1118 166,909.02 68,593.88 235,502.90
Decreases
– Transfers out to fixed assets/intangible assets /H1118 5,658,703.27 79,636.69 5,738,339.96
As at 31 December 2023 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111818,445,609.15 1,561,722.83 20,007,331.98
Additions
– Charge for the year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185,861,938.74 142,861.32 6,004,800.06
As at 31 December 2024 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111824,307,547.89 1,704,584.15 26,012,132.04
Additions
– Charge for the period /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184,396,454.05 107,145.99 4,503,600.04
As at 30 September 2025 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111828,704,001.94 1,811,730.14 30,515,732.08------------ ------------ ------------
Provision for impairment
As at 1 January 2022 and 31 December 2022,
2023 and 2024 and 30 September 2025 /H1118/H1118/H1118/H1118/H1118/H1118–––------------ ------------ ------------
Carrying amounts
As at 31 December 2022 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118121,139,542.32 4,397,618.12 125,537,160.44
As at 31 December 2023 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118104,975,380.82 4,223,816.86 109,199,197.68
As at 31 December 2024 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111899,113,442.08 4,080,955.54 103,194,397.62
As at 30 September 2025 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111894,716,988.03 3,973,809.55 98,690,797.58
APPENDIX I ACCOUNTANTS’ REPORT
– I-67 –


--- page 546 ---
12 Fixed assets
(1) Fixed assets
Plant & buildings
Machinery &
equipment Motor vehicles Others Total
Cost
As at 1 January 2022 /H1118/H1118/H111882,836,364,886.04 27,289,446,792.19 1,847,034,939.34 3,039,365,346.98 115,012,211,964.55
Additions
– Purchases /H1118/H1118/H1118/H1118/H1118/H1118/H1118409,518,702.77 1,535,120,945.88 97,397,400.35 101,377,472.24 2,143,414,521.24
– Transfers from
construction in
progress /H1118/H1118/H1118/H1118/H1118/H1118/H111811,995,459,152.29 3,430,948,899.37 – 447,536,946.40 15,873,944,998.06
– Transfers from
investment properties /H1118 27,230,074.70 – – – 27,230,074.70
Decreases
– Disposals or written-
offs /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118210,176,299.49 255,461,640.38 8,611,712.53 20,528,969.47 494,778,621.87
– Transfers out to
investment properties /H1118 9,579,564.67 – – – 9,579,564.67
As at 31 December 2022 /H1118/H111895,048,816,951.64 32,000,054,997.06 1,935,820,627.16 3,567,750,796.15 132,552,443,372.01
Additions
– Purchases /H1118/H1118/H1118/H1118/H1118/H1118/H1118794,628,994.79 1,308,316,802.09 106,854,529.29 257,911,738.60 2,467,712,064.77
– Transfers from
construction in
progress /H1118/H1118/H1118/H1118/H1118/H1118/H111811,909,169,935.63 4,171,823,165.81 – 473,539,247.33 16,554,532,348.77
– Transfers from
investment properties /H1118 16,744,788.02 – – – 16,744,788.02
Decreases
– Disposals or written-
offs /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118411,788,204.00 583,872,301.99 46,355,479.84 62,416,097.67 1,104,432,083.50
– Transfers out to
investment properties /H1118 1,512,949.68 – – – 1,512,949.68
As at 31 December 2023 /H1118/H1118107,356,059,516.40 36,896,322,662.97 1,996,319,676.61 4,236,785,684.41 150,485,487,540.39
Additions
– Purchases /H1118/H1118/H1118/H1118/H1118/H1118/H1118154,985,017.40 966,942,316.42 172,582,927.85 250,174,730.86 1,544,684,992.53
– Transfers from
construction in
progress /H1118/H1118/H1118/H1118/H1118/H1118/H11185,526,963,283.98 2,244,396,673.42 – 221,886,365.05 7,993,246,322.45
Decreases
– Disposals or written-
offs /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118729,033,460.95 694,848,987.19 110,371,750.72 84,357,440.12 1,618,611,638.98
As at 31 December 2024 /H1118/H1118112,308,974,356.83 39,412,812,665.62 2,058,530,853.74 4,624,489,340.20 158,404,807,216.39
Additions
– Purchases /H1118/H1118/H1118/H1118/H1118/H1118/H11184,154,379.28 720,753,914.21 130,277,411.30 208,234,709.51 1,063,420,414.30
– Transfers from
construction in
progress /H1118/H1118/H1118/H1118/H1118/H1118/H11184,004,279,539.19 1,613,785,349.40 – 63,079,040.21 5,681,143,928.80
Decreases
– Disposals or written-
offs /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118870,444,585.61 812,670,408.61 117,427,872.31 112,599,970.17 1,913,142,836.70
– Others /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111870,612,404.69 4,374,928.26 – 1,812,217.79 76,799,550.74
As at 30 September 2025 /H1118/H1118115,376,351,285.00 40,930,306,592.36 2,071,380,392.73 4,781,390,901.96 163,159,429,172.05----------- ----------- ----------- ----------- -----------
APPENDIX I ACCOUNTANTS’ REPORT
– I-68 –


--- page 547 ---
Plant & buildings
Machinery &
equipment Motor vehicles Others Total
Accumulated depreciation
As at 1 January 2022 /H1118/H1118/H111810,137,453,111.89 4,084,523,298.37 515,971,828.57 723,334,382.33 15,461,282,621.16
Additions
– Charge for the year /H1118/H11186,997,875,604.59 3,060,393,748.29 289,603,113.10 579,993,488.79 10,927,865,954.77
– Transfers from
investment properties /H1118 1,401,214.26 – – – 1,401,214.26
Decreases
– Disposals or written-
offs /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111864,898,154.07 111,062,416.79 6,787,264.86 11,759,241.49 194,507,077.21
– Transfers out to
investment properties /H1118 2,317,204.85 – – – 2,317,204.85
As at 31 December 2022 /H1118/H111817,069,514,571.82 7,033,854,629.87 798,787,676.81 1,291,568,629.63 26,193,725,508.13
Additions
– Charge for the year /H1118/H11187,996,242,581.01 3,649,341,952.19 296,370,053.02 714,418,272.05 12,656,372,858.27
– Transfers from
investment properties /H1118 5,658,703.27 – – – 5,658,703.27
Decreases
– Disposals or written-
offs /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118147,380,678.65 292,495,380.79 37,816,263.70 42,903,742.56 520,596,065.70
– Transfers out to
investment properties /H1118 166,909.02 – – – 166,909.02
As at 31 December 2023 /H1118/H111824,923,868,268.43 10,390,701,201.27 1,057,341,466.13 1,963,083,159.12 38,334,994,094.95
Additions
– Charge for the year /H1118/H11188,987,871,444.14 3,995,675,831.75 291,866,944.87 815,886,453.16 14,091,300,673.92
Decreases
– Disposals or written-
offs /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118239,625,136.48 380,969,934.60 86,466,933.32 65,785,806.86 772,847,811.26
As at 31 December 2024 /H1118/H111833,672,114,576.09 14,005,407,098.42 1,262,741,477.68 2,713,183,805.42 51,653,446,957.61
Additions
– Charge for the period /H1118 7,097,700,503.17 3,227,314,598.36 220,676,784.35 602,336,688.61 11,148,028,574.49
Decreases
– Disposals or written-
offs /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118327,417,241.82 464,319,249.00 98,047,242.82 91,597,206.24 981,380,939.88
– Others /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111812,018,759.44 503,856.16 – 1,424,472.13 13,947,087.73
As at 30 September 2025 /H1118/H111840,430,379,078.00 16,767,898,591.62 1,385,371,019.21 3,222,498,815.66 61,806,147,504.49----------- ----------- ----------- ----------- -----------
Provision for impairment
As at 1 January 2022 and
31 December 2022, 2023
and 2024 and
30 September 2025 /H1118/H1118/H1118 –––––-----------
----------- ----------- ----------- -----------
Carrying amounts
As at 31 December 2022 /H1118/H111877,979,302,379.82 24,966,200,367.19 1,137,032,950.35 2,276,182,166.52 106,358,717,863.88
As at 31 December 2023 /H1118/H111882,432,191,247.97 26,505,621,461.70 938,978,210.48 2,273,702,525.29 112,150,493,445.44
As at 31 December 2024 /H1118/H111878,636,859,780.74 25,407,405,567.20 795,789,376.06 1,911,305,534.78 106,751,360,258.78
As at 30 September 2025 /H1118/H111874,945,972,207.00 24,162,408,000.74 686,009,373.52 1,558,892,086.30 101,353,281,667.56
APPENDIX I ACCOUNTANTS’ REPORT
– I-69 –


--- page 548 ---
(2) Fixed assets leased out under operating leases
As at 31 December
As at
30 September
2022 2023 2024 2025
Plant & buildings /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 6,888,329.21 8,951,836.14 13,694,684.95
Machinery & equipment /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,192,122.22 2,031,020.32 1,768,662.00 6,240,510.90
Motor vehicles /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118369,828.82 211,640.11 122,280.97 81,340.14
Others /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118221,692.41 165,368.60 125,614.18 425,193.05
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,783,643.45 9,296,358.24 10,968,393.29 20,441,729.04
(3) Fixed assets pending certificates of ownership
As at 31 December
As at
30 September
Reason why
certificates of
ownership are
pending2022 2023 2024 2025
Hog slaughtering
projects /H1118/H1118/H1118/H1118/H1118/H1118/H1118
2,377,747,460.90 2,288,983,061.74 1,769,558,746.02 1,396,593,026.89 Certificates are in
progress
Feed processing
projects /H1118/H1118/H1118/H1118/H1118/H1118/H1118
966,940,087.96 970,873,615.84 988,378,244.30 918,351,054.98 Certificates are in
progress
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,344,687,548.86 3,259,856,677.58 2,757,936,990.32 2,314,944,081.87
(4) Impairment tests for cash-generating units (“CGUs”)
As at the end of each reporting period, the Group reviews whether the performance objectives are
accomplished for each CGU to determine whether there is any indication of impairment. If any such indication exists
(i.e. the actual performance is significantly worse than the expected performance determined by the Group), then the
Group will perform the impairment test for the respective CGUs.
The recoverable amounts of the CGUs for which there was impairment indicator were determined based on
value-in-use calculations of the CGUs, the underlying assets attributed to which mainly include fixed assets,
construction in progress, right-of-use assets and intangible assets. These calculations use cash flow projections based
on historical performance levels, approved financial budgets and comprehensive consideration of the CGU’s own
production capacity and market development trends. The discount rates used are pre-taxed and reflect specific risks
relating to the relevant CGUs. The key assumptions used in the value-in-use calculations are as follows:
As at 31 December
As at
30 September
2022 2023 2024 2025
Forecast period /H1118/H1118Determined based
on remaining
useful life of the
key underlying
items of plant and
buildings
Determined based
on remaining
useful life of the
key underlying
items of plant and
buildings
Determined based
on remaining
useful life of the
key underlying
items of plant and
buildings
Determined based
on remaining
useful life of the
key underlying
items of plant and
buildings
Discount rate
used in
estimate the
present value /H1118
11% 11% 11% 11%
As a result of the impairment tests, the directors of the Company are of the view that there was no impairment
for the respective CGU as of 31 December 2022, 2023 and 2024 and 30 September 2025.
APPENDIX I ACCOUNTANTS’ REPORT
– I-70 –


--- page 549 ---
13 Construction in progress
As at 31 December As at 30 September
2022 2023 2024 2025
Construction in progress /H1118/H11187,441,270,850.48 2,308,343,400.07 2,018,203,532.86 3,227,149,012.29
(1) Construction in progress
As at 31 December As at 30 September
2022 2023 2024 2025
Book value
Provision
for
impairment
Carrying
amount Book value
Provision
for
impairment
Carrying
amount Book value
Provision
for
impairment
Carrying
amount Book value
Provision
for
impairment
Carrying
amount
Hog breeding projects /H11186,282,051,888.51 – 6,282,051,888.51 1,460,879,601.07 – 1,460,879,601.07 1,256,686,022.56 – 1,256,686,022.56 2,114,503,726.68 – 2,114,503,7 26.68
Hog slaughtering
projects /H1118/H1118/H1118/H1118530,881,556.13 – 530,881,556.13 551,555,807.46 – 551,555,807.46 602,469,336.62 – 602,469,336.62 644,296,509.16 – 644,296,509.16
Feed processing
projects /H1118/H1118/H1118/H1118340,360,572.21 – 340,360,572.21 239,646,611.29 – 239,646,611.29 102,197,308.64 – 102,197,308.64 272,043,742.84 – 272,043,742.84
Others /H1118/H1118/H1118/H1118/H1118287,976,833.63 – 287,976,833.63 56,261,380.25 – 56,261,380.25 56,850,865.04 – 56,850,865.04 196,305,033.61 – 196,305,033.61
Total /H1118/H1118/H1118/H1118/H1118/H11187,441,270,850.48 – 7,441,270,850.48 2,308,343,400.07 – 2,308,343,400.07 2,018,203,532.86 – 2,018,203,532.86 3,227,149,012.29 – 3,227,149,0 12.29
APPENDIX I ACCOUNTANTS’ REPORT
– I-71 –


--- page 550 ---
Movements of major construction projects in progress during the Track Record Period:
Y ear ended 31 December 2022
Project Budget As at 1 January Additions
Transfers to
fixed assets
Other
decreases As at 31 December
Percentage
of actual cost
to budget
Project
progress
Accumulated
capitalised
interest
Including:
Interest
capitalised in
2022
Capitalisation
rate of
interests in
2022 Sources of funding
(RMB’million) (%) (%)
Neixiang Complex swine breeding project /H1118 3,500.00 137,015,225.33 345,207,559.71 413,058,891.40 – 69,163,893.64 95.55% 95.55% – – – Proceeds from
offering
Leizhou Muyuan swine breeding project /H1118 1,933.49 386,377,558.31 238,212,880.48 266,525,637.43 – 358,064,801.36 92.21% 92.21% – – – Loans from financial
institutions
Neihuang Muyuan swine breeding project /H1118 1,648.31 129,134,844.21 213,488,261.88 264,845,482.53 – 77,777,623.56 84.22% 84.22% – – – Proceeds from
offering
Guannan Muyuan swine breeding project /H1118 1,779.22 2,599,852.06 193,897,698.37 193,430,138.32 – 3,067,412.11 98.50% 98.50% 1,188,718.75 – – Proceeds from
offering
Zhengyang Muyuan swine breeding
project /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
2,447.38 29,763,352.16 185,759,375.88 120,570,246.06 – 94,952,481.98 62.85% 62.85% 15,031,246.98 – – Proceeds from
offering
Fugou Muyuan swine breeding project /H1118/H1118 1,767.17 17,711,315.77 179,874,626.36 160,040,413.30 – 37,545,528.83 97.56% 97.56% 978,242.13 – – Proceeds from
offering
Shangcai Muyuan swine breeding project /H1118 2,374.73 65,723,847.87 175,954,430.21 204,536,488.65 – 37,141,789.43 84.71% 84.71% – – – Loans from financial
institutions
Laohekou Muyuan swine breeding project /H1118 1,384.56 89,766,241.46 175,567,450.80 221,358,931.99 – 43,974,760.27 97.13% 97.13% – – – Proceeds from
offering
Taikang Muyuan swine breeding project /H1118 1,574.91 51,817,329.54 171,744,634.78 220,926,711.94 – 2,635,252.38 98.81% 98.81% – – – Other
Ruzhou Complex swine breeding project /H1118 2,391.84 913,612,072.89 166,987,187.24 296,721,070.38 – 783,878,189.75 58.44% 58.44% – – – Other
Tieling Muyuan swine breeding project /H1118/H1118 1,365.70 54,508,512.27 164,703,358.01 159,442,343.77 – 59,769,526.51 70.24% 70.24% – – – Loans from financial
institutions
Sixian Muyuan swine breeding project /H1118/H1118 1,640.34 107,178,152.34 158,998,989.74 173,075,332.48 – 93,101,809.60 99.57% 99.57% – – – Loans from financial
institutions
Zhongxiang Muyuan swine breeding
project /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
1,796.32 91,299,085.48 158,753,837.26 219,304,817.46 – 30,748,105.28 91.17% 91.17% 658,254.06 – – Other
Caoxian Muyuan swine breeding project /H1118 2,078.95 15,975,775.42 155,447,388.32 148,609,816.05 – 22,813,347.69 98.98% 98.98% – – – Other
Mengcheng Muyuan swine breeding
project /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
1,821.38 16,748,196.09 151,222,178.69 126,143,160.80 – 41,827,213.98 79.29% 79.29% – – – Proceeds from
offering
Shangshui Muyuan swine breeding
project /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
2,033.39 21,993,434.96 148,965,321.84 125,821,426.52 – 45,137,330.28 96.73% 96.73% – – – Other
APPENDIX I ACCOUNTANTS’ REPORT
– I-72 –


--- page 551 ---
Y ear ended 31 December 2022
Project Budget As at 1 January Additions
Transfers to
fixed assets
Other
decreases As at 31 December
Percentage
of actual cost
to budget
Project
progress
Accumulated
capitalised
interest
Including:
Interest
capitalised in
2022
Capitalisation
rate of
interests in
2022 Sources of funding
(RMB’million) (%) (%)
Sheqi Muyuan swine breeding project /H1118/H1118 1,456.82 57,152,450.19 135,350,180.70 170,569,967.69 – 21,932,663.20 80.35% 80.35% – – – Loans from financial
institutions
Qixian Muyuan swine breeding project /H1118/H1118 2,090.87 37,674,919.45 130,063,915.55 124,302,429.64 – 43,436,405.36 97.30% 97.30% – – – Loans from financial
institutions
Tongyu Muyuan swine breeding project /H1118/H1118 1,478.83 14,124,069.90 129,229,740.70 139,921,818.34 – 3,431,992.26 86.16% 86.16% – – – Other
Tanghe Muyuan swine breeding project /H1118/H1118 2,067.25 88,428,410.21 127,137,992.57 190,935,533.63 – 24,630,869.15 80.07% 80.07% – – – Other
Da’an Muyuan swine breeding project /H1118/H1118 1,129.32 18,581,978.54 121,901,440.93 87,371,423.19 – 53,111,996.28 89.17% 89.17% – – – Proceeds from
offering
Shishou Muyuan swine breeding project /H1118 1,229.14 104,459,055.44 121,342,469.35 149,797,093.64 – 76,004,431.15 92.15% 92.15% – – – Proceeds from
offering
Dongming Muyuan swine breeding
project /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
1,288.04 50,617,936.89 120,239,991.97 143,720,661.26 – 27,137,267.60 99.78% 99.78% – – – Proceeds from
offering
Wolong Muyuan swine breeding project /H1118 1,964.04 85,341,336.66 113,925,549.57 161,635,938.65 – 37,630,947.58 95.76% 95.76% – – – Other
Xiping Muyuan swine breeding project /H1118/H1118 1,186.94 11,763,052.61 110,414,099.48 36,778,541.30 – 85,398,610.79 75.69% 75.69% – – – Proceeds from
offering
Qianguo Muyuan swine breeding project /H1118 981.77 92,803,802.86 106,713,539.87 136,716,152.41 – 62,801,190.32 97.72% 97.72% – – – Loans from financial
institutions
Wengniute Muyuan swine breeding
project /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
1,581.61 56,196,774.71 104,625,282.08 141,904,095.11 – 18,917,961.68 97.03% 97.03% – – – Proceeds from
offering
Dengzhou Muyuan swine breeding
project /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
1,908.42 32,724,140.90 103,122,876.47 126,176,687.89 – 9,670,329.48 99.38% 99.38% – – – Other
Wuhan hogs and swine breeding project /H1118 177.00 39,278,104.49 100,170,787.52 99,134,347.47 – 40,314,544.54 79.92% 79.92% – – – Other
Xixiangtang Muyuan swine breeding
project /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
672.82 313,547,838.68 91,382,828.45 242,228,060.35 – 162,702,606.78 80.70% 80.70% – – – Loans from financial
institutions
Y ongcheng Muyuan swine breeding
project /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
387.25 191,552,527.15 89,801,252.15 138,786,277.95 – 142,567,501.35 74.84% 74.84% – – – Other
APPENDIX I ACCOUNTANTS’ REPORT
– I-73 –


--- page 552 ---
Y ear ended 31 December 2022
Project Budget As at 1 January Additions
Transfers to
fixed assets
Other
decreases As at 31 December
Percentage
of actual cost
to budget
Project
progress
Accumulated
capitalised
interest
Including:
Interest
capitalised in
2022
Capitalisation
rate of
interests in
2022 Sources of funding
(RMB’million) (%) (%)
Luxi swine and hogs breeding project /H1118/H1118 150.55 43,166,738.24 70,892,077.23 4,276,390.90 – 109,782,424.57 76.68% 76.68% – – – Other
Y uanping Muyuan swine breeding project /H1118 914.42 301,809,358.11 69,818,299.10 91,561,433.41 – 280,066,223.80 94.00% 94.00% – – – Loans from financial
institutions
Chencang Muyuan swine breeding project /H1118 270.43 119,305,069.91 62,077,994.99 73,077,077.24 – 108,305,987.66 68.16% 68.16% – – – Loans from financial
institutions
Hai’an Muyuan swine breeding project /H1118/H1118 461.37 238,370,575.69 55,568,934.90 151,902,223.26 – 142,037,287.33 98.11% 98.11% 1,626,666.66 – – Loans from financial
institutions
Xinyi Muyuan swine breeding project /H1118/H1118 730.00 222,441,082.28 55,423,477.90 89,755,829.89 – 188,108,730.29 79.46% 79.46% 465,972.23 – – Other
Huaxian Meat swine slaughtering Project /H1118 462.51 308,495,729.88 53,768,127.39 48,820,595.55 – 313,443,261.72 78.37% 78.37% 22,985,208.66 16,167,672.58 5.50% Loans from financial
institutions
Sichuan Muyuan swine breeding project /H1118 448.71 137,844,167.16 41,964,256.66 50,377,186.21 – 129,431,237.61 69.78% 69.78% – – – Loans from financial
institutions
Qingjiangpu Muyuan swine breeding
project /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
355.96 124,286,646.88 39,598,745.13 40,823,874.21 – 123,061,517.80 86.32% 86.32% – – – Other
Liangzhou Muyuan swine breeding
project /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
764.89 150,084,503.31 36,447,718.81 64,451,937.25 – 122,080,284.87 65.37% 65.37% – – – Loans from financial
institutions
Funing Muyuan swine breeding project /H1118/H1118 459.73 212,699,335.61 36,321,852.52 14,582,085.77 – 234,439,102.36 83.25% 83.25% 1,372,500.00 – – Loans from financial
institutions
Jingtai Muyuan swine breeding project /H1118/H1118 607.41 212,397,276.37 35,505,777.47 53,836,268.69 – 194,066,785.15 72.99% 72.99% – – – Loans from financial
institutions
Suyu Muyuan swine breeding project /H1118/H1118/H1118 381.38 99,770,247.89 30,811,437.78 26,856,868.69 – 103,724,816.98 38.93% 38.93% 352,444.45 – – Loans from financial
institutions
Lianshui Muyuan swine breeding project /H1118 351.50 116,828,301.11 22,591,405.51 9,921,298.24 – 129,498,408.38 41.30% 41.30% 102,083.33 – – Loans from financial
institutions
Baoying Muyuan swine breeding project /H1118 174.49 96,685,116.36 11,239,710.79 2,644,152.10 – 105,280,675.05 70.75% 70.75% 154,583.33 – – Loans from financial
institutions
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111857,671.16 5,709,655,343.64 5,312,236,943.11 6,127,277,159.01 – 4,894,615,127.74 44,915,920.58 16,167,672.58
APPENDIX I ACCOUNTANTS’ REPORT
– I-74 –


--- page 553 ---
Y ear ended 31 December 2023
Project Budget As at 1 January Additions
Transfers to
fixed assets
Other
decreases As at 31 December
Percentage
of actual cost
to budget
Project
progress
Accumulated
capitalised
interest
Including:
Interest
capitalised in
2023
Capitalisation
rate of
interests in
2023 Sources of funding
(RMB’million) (%) (%)
Huaxian Meat swine slaughtering project /H1118 462.51 313,443,261.72 25,022,338.50 8,344,578.54 – 330,121,021.68 83.78% 83.78% 26,662,765.20 3,677,556.54 5.50% Loans from financial
institutions
Jingtai Muyuan swine breeding project /H1118/H1118 607.41 194,066,785.15 21,675,995.60 104,642,626.64 – 111,100,154.11 76.56% 76.56% – – – Loans from financial
institutions
Leizhou Muyuan swine breeding project /H1118 2,075.56 358,064,801.36 241,390,941.72 496,534,127.09 – 102,921,615.99 97.53% 97.53% – – – Loans from financial
institutions
Mengcheng Muyuan swine breeding
project /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
1,821.38 41,827,213.98 158,169,925.06 149,483,967.18 – 50,513,171.86 87.98% 87.98% – – – Proceeds from
offering
Wolong Muyuan swine breeding project /H1118 2,061.74 37,630,947.58 125,022,398.10 141,084,578.44 – 21,568,767.24 97.43% 97.43% – – – Other
Tieling Muyuan swine breeding project /H1118/H1118 1,365.70 59,769,526.51 105,098,780.62 123,261,278.80 – 41,607,028.33 77.94% 77.94% – – – Loans from financial
institutions
Taierzhuang Muyuan swine breeding
project /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
451.12 51,464,145.41 138,135,561.50 160,441,366.17 – 29,158,340.74 82.31% 82.31% – – – Other
Tai’an Muyuan swine breeding project /H1118/H1118 817.97 18,321,630.69 119,102,844.59 109,332,798.28 – 28,091,677.00 93.34% 93.34% – – – Loans from financial
institutions
Xiping Muyuan swine breeding project /H1118/H1118 1,186.94 85,398,610.79 149,439,242.43 210,884,620.13 – 23,953,233.09 88.28% 88.28% – – – Proceeds from
offering
Laohekou Muyuan swine breeding project /H1118 1,483.67 43,974,760.27 120,459,112.25 142,393,317.35 – 22,040,555.17 98.76% 98.76% – – – Proceeds from
offering
Dali Muyuan swine breeding project /H1118/H1118/H1118 944.10 11,760,575.78 223,379,222.36 213,998,275.68 – 21,141,522.46 92.34% 92.34% – – – Loans from financial
institutions
Ningming swine and hogs breeding
project /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
154.56 33,213,240.98 114,648,131.85 130,149,701.45 – 17,711,671.38 95.91% 95.91% – – – Other
Xixiangtang Muyuan swine breeding
project /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
730.42 162,702,606.78 173,721,022.94 321,230,586.75 – 15,193,042.97 98.12% 98.12% – – – Loans from financial
institutions
Ruzhou Complex swine breeding project /H1118 2,391.84 783,878,189.75 396,727,300.25 1,167,725,296.58 – 12,880,193.42 75.02% 75.02% – – – Other
Qixian Muyuan swine breeding project /H1118/H1118 2,207.21 43,436,405.36 127,456,864.43 161,147,584.09 – 9,745,685.70 97.95% 97.95% – – – Loans from financial
institutions
Sixian Muyuan swine breeding project /H1118/H1118 1,859.30 93,101,809.60 117,485,513.40 202,780,422.24 – 7,806,900.76 94.16% 94.16% – – – Loans from financial
institutions
Caoxian Muyuan swine breeding project /H1118 2,266.32 22,813,347.69 118,956,166.12 134,695,833.77 – 7,073,680.04 96.05% 96.05% – – – Other
APPENDIX I ACCOUNTANTS’ REPORT
– I-75 –


--- page 554 ---
Y ear ended 31 December 2023
Project Budget As at 1 January Additions
Transfers to
fixed assets
Other
decreases As at 31 December
Percentage
of actual cost
to budget
Project
progress
Accumulated
capitalised
interest
Including:
Interest
capitalised in
2023
Capitalisation
rate of
interests in
2023 Sources of funding
(RMB’million) (%) (%)
Liucheng Muyuan swine breeding project /H1118 568.14 95,408,562.41 126,751,322.91 216,269,312.06 – 5,890,573.26 94.82% 94.82% – – – Loans from financial
institutions
Shangcai Muyuan swine breeding project /H1118 2,374.73 37,141,789.43 137,280,989.30 169,637,181.26 – 4,785,597.47 91.95% 91.95% – – – Loans from financial
institutions
Guannan Muyuan swine breeding project /H1118 1,900.23 3,067,412.11 105,218,196.25 104,125,708.36 – 4,159,900.00 97.76% 97.76% 1,188,718.75 – – Other
Sheqi Muyuan swine breeding project /H1118/H1118 1,456.82 21,932,663.20 205,449,479.80 223,655,409.94 – 3,726,733.06 94.45% 94.45% – – – Loans from financial
institutions
Tongxu Muyuan swine breeding project /H1118/H1118 1,053.92 4,899,374.79 126,699,524.65 128,234,728.43 – 3,364,171.01 93.55% 93.55% – – – Other
Kailu Muyuan swine breeding project /H1118/H1118 1,742.46 15,615,673.22 133,536,868.75 145,919,556.75 – 3,232,985.22 91.55% 91.55% – – – Other
Zhongxiang Muyuan swine breeding
project /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
1,953.16 30,748,105.28 126,770,031.44 154,608,055.48 – 2,910,081.24 90.34% 90.34% 658,254.06 – – Other
Naiman Muyuan swine breeding project /H1118 1,369.27 4,026,347.46 107,578,769.79 109,460,964.19 – 2,144,153.06 99.25% 99.25% – – – Other
Zhengyang Muyuan swine breeding
project /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
2,447.38 94,952,481.98 199,442,865.72 293,180,767.91 – 1,214,579.79 71.00% 71.00% 15,031,246.98 – – Other
Fuxin Muyuan swine breeding project /H1118/H1118 1,546.66 10,718,103.46 106,504,283.01 116,316,418.84 – 905,967.63 84.88% 84.88% – – – Other
Dengzhou Muyuan swine breeding
project /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
2,112.58 9,670,329.48 130,210,266.37 139,278,162.92 – 602,432.93 95.94% 95.94% – – – Other
Mingshui Muyuan swine breeding project /H1118 997.75 3,185,732.49 102,551,115.87 105,371,057.84 – 365,790.52 87.36% 87.36% – – – Other
Shangshui Muyuan swine breeding
project /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
2,170.01 45,137,330.28 161,191,359.40 206,151,613.84 – 177,075.84 98.06% 98.06% – – – Other
Taikang Muyuan swine breeding project /H1118 1,739.37 2,635,252.38 136,286,127.35 138,898,407.38 – 22,972.35 97.30% 97.30% – – – Other
Fugou Muyuan swine breeding project /H1118/H1118 2,005.92 37,545,528.83 168,906,455.57 206,451,984.40 – – 96.00% 96.00% 978,242.13 – – Other
Huaxian Muyuan swine breeding project /H1118 2,492.50 9,828,591.26 142,857,807.10 152,686,398.36 – – 71.42% 71.42% – – – Other
Suyu Muyuan swine breeding project /H1118/H1118/H1118 442.89 103,724,816.98 283,737,150.61 387,461,967.59 – – 97.59% 97.59% 352,444.45 – – Other
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111851,261.56 2,885,105,954.44 4,976,863,975.61 6,975,838,654.73 – 886,131,275.32 44,871,671.57 3,677,556.54
APPENDIX I ACCOUNTANTS’ REPORT
– I-76 –


--- page 555 ---
Y ear ended 31 December 2024
Project Budget As at 1 January Additions
Transfers to
fixed assets
Other
decreases As at 31 December
Percentage
of actual cost
to budget
Project
progress
Accumulated
capitalised
interest
Including:
Interest
capitalised in
2024
Capitalisation
rate of
interests in
2024 Sources of funding
(RMB’million) (%) (%)
Zhengzhou Industrial Zone swine breeding
project /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
4,685.93 – 541,197,700.02 14,261,544.31 – 526,936,155.71 11.55% 11.55% – – – Other
Huaxian Meat swine slaughtering project /H1118 462.51 330,121,021.68 25,241,117.54 965,954.65 – 354,396,184.57 89.24% 89.24% 26,662,765.20 – – Loans from financial
institutions
Y ongcheng Muyuan swine breeding
project /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
405.40 83,253,542.97 25,258,133.90 6,125,074.76 – 102,386,602.11 98.96% 98.96% – – – Loans from financial
institutions
Fanshi Muyuan swine breeding project /H1118/H1118 1,290.77 4,454,390.56 124,465,541.66 64,018,059.60 – 64,901,872.62 73.86% 73.86% – – – Loans from financial
institutions
Huimin Muyuan swine breeding project /H1118/H1118 1,809.12 1,847,807.15 102,154,699.76 70,740,629.01 – 33,261,877.90 73.66% 73.66% – – – Other
Shangshui Muyuan swine breeding
project /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
2,320.01 177,075.84 150,695,480.39 135,041,556.23 – 15,831,000.00 98.22% 98.22% – – – Other
Leizhou Muyuan swine breeding project /H1118 2,175.57 102,921,615.99 115,413,851.86 206,640,712.53 – 11,694,755.32 98.35% 98.35% – – – Loans from financial
institutions
Ruzhou Complex swine breeding project /H1118 2,391.84 12,880,193.42 131,120,572.67 133,449,947.08 – 10,550,819.01 80.50% 80.50% – – – Other
Muyuan Anliang amino acid project /H1118/H1118/H1118 149.24 902,408.15 132,608,255.33 125,868,286.59 – 7,642,376.89 89.46% 89.46% – – – Other
Fengtai Muyuan swine breeding project /H1118/H1118 1,642.70 2,117,027.69 103,213,183.46 101,003,210.94 – 4,327,000.21 98.65% 98.65% – – – Other
Binyang Muyuan swine breeding project /H1118 808.15 31,705,294.57 101,744,337.46 130,797,316.20 – 2,652,315.83 97.49% 97.49% – – – Other
Mengcheng Muyuan swine breeding
project /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
1,821.38 50,513,171.86 115,681,619.75 164,899,756.41 – 1,295,035.20 94.33% 94.33% – – – Other
Neixiang Complex swine breeding project /H1118 3,700.00 10,235,790.67 142,983,023.00 152,351,241.18 – 867,572.49 95.63% 95.63% – – – Other
Dengzhou Muyuan swine breeding
project /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
2,162.58 602,432.93 108,340,331.51 108,942,764.44 – – 98.73% 98.73% – – – Other
Caoxian Muyuan swine breeding
project /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
2,316.32 7,073,680.04 103,105,920.18 110,179,600.22 – – 98.43% 98.43% – – – Other
Fugou Muyuan swine breeding project /H1118/H1118 2,130.12 – 136,138,965.97 136,138,965.97 – – 96.79% 96.79% 978,242.13 – – Other
Taikang Muyuan swine breeding project /H1118 1,869.37 22,972.35 148,392,270.13 148,415,242.48 – – 98.48% 98.48% – – – Other
Ningling Muyuan swine breeding project /H1118 1,276.05 666,693.04 101,781,434.32 102,448,127.36 – – 87.10% 87.10% – – – Other
Jingtai Muyuan swine breeding project /H1118/H1118 607.41 111,100,154.11 104,422,079.19 215,522,233.30 – – 93.75% 93.75% – – – Loans from financial
institutions
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111834,024.47 750,595,273.02 2,513,958,518.10 2,127,810,223.26 – 1,136,743,567.86 27,641,007.33 –
APPENDIX I ACCOUNTANTS’ REPORT
– I-77 –


--- page 556 ---
Nine months ended 30 September 2025
Project Budget As at 1 January Additions
Transfers to
fixed assets
Other
decreases
As at
30 September
Percentage
of actual cost
to budget
Project
progress
Accumulated
capitalised
interest
Including:
Interest
capitalised in
the period
Capitalisation
rate of
interests in the
period Sources of funding
(RMB’million) (%) (%)
Zhengzhou Industrial Zone swine breeding
project /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
4,685.90 526,936,155.71 1,528,765,628.95 891,637,901.59 – 1,164,063,883.07 44.17% 44.17% – – – Other
Huaxian Meat swine slaughtering project /H1118 462.51 354,396,184.57 31,706,335.06 4,721.04 – 386,097,798.59 96.09% 96.09% 26,662,765.20 – – Loans from financial
institutions
Y ongcheng Muyuan swine breeding
project /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
425.40 102,386,602.11 19,896,841.06 59,595,358.15 – 62,688,085.02 98.98% 98.98% – – – Loans from financial
institutions
Fengtai Muyuan swine breeding project /H1118/H1118 1,792.70 4,327,000.21 135,933,124.09 108,106,275.12 – 32,153,849.18 97.98% 97.98% – – – Other
Caoxian Muyuan 2025 swine breeding
improvement project /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
206.21 – 144,704,161.24 135,372,707.97 – 9,331,453.27 70.17% 70.17% – – – Other
Xihua Muyuan swine breeding project /H1118/H1118 1,324.60 7,369,410.89 101,614,076.35 104,743,387.24 – 4,240,100.00 95.23% 95.23% – – – Other
Shangshui Muyuan swine breeding
project /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
2,420.00 15,831,000.00 107,437,507.05 120,453,932.53 – 2,814,574.52 98.60% 98.60% – – – Other
Xichuan Meat swine slaughtering project /H1118 366.10 – 112,452,961.81 2,142,036.94 – 110,310,924.87 50.17% 50.17% – – – Other
Ningling Muyuan 2025 swine breeding
improvement project /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
205.40 – 158,709,898.56 86,944,792.41 – 71,765,106.15 77.28% 77.28% – – – Other
Taikang Muyuan 2025 swine breeding
improvement project /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
165.00 – 120,856,288.36 98,300,820.67 – 22,555,467.69 73.25% 73.25% – – – Other
Fugou Muyuan 2025 swine breeding
improvement project /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
156.10 – 107,865,276.59 107,105,553.16 – 759,723.43 69.10% 69.10% – – – Other
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111812,209.92 1,011,246,353.49 2,569,942,099.12 1,714,407,486.82 – 1,866,780,965.79 26,662,765.20 –
APPENDIX I ACCOUNTANTS’ REPORT
– I-78 –


--- page 557 ---
14 Productive biological assets
Hogs
Y ear ended 31 December
Nine months ended
30 September
2022 2023 2024 2025
Cost
As at 1 January /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11188,483,507,333.42 8,738,349,660.49 10,721,396,492.26 10,934,250,465.23
Additions
– Purchases /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,300,000.00 6,091,291.54 45,283,606.53 10,408,637.17
– Self-breeding /H1118/H1118/H1118/H1118/H1118/H1118/H11189,639,249,789.66 13,258,282,005.65 17,248,815,425.82 9,768,238,448.27
Decreases
– Disposals /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11188,921,700,666.26 10,750,699,807.18 16,554,379,222.64 11,327,172,561.44
– Others /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118464,006,796.33 530,626,658.24 526,865,836.74 346,034,935.00
As at 31 December/
30 September /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11188,738,349,660.49 10,721,396,492.26 10,934,250,465.23 9,039,690,054.23------------- ------------- ------------- -------------
Accumulated depreciation
As at 1 January /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,132,491,372.72 1,403,517,148.59 1,406,274,332.15 1,579,111,743.12
Additions
– Charge for the
year/period /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,786,831,144.18 2,043,097,196.71 2,294,459,407.72 1,689,278,667.78
Decreases
– Disposals /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,411,929,318.65 1,916,014,293.72 2,007,448,567.67 1,891,655,242.50
– Others /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118103,876,049.66 124,325,719.43 114,173,429.08 78,846,515.50
As at 31 December/
30 September /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,403,517,148.59 1,406,274,332.15 1,579,111,743.12 1,297,888,652.90------------- ------------- ------------- -------------
Provision for impairment
As at 1 January and
31 December/
30 September /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118––––-------------
------------- ------------- -------------
Carrying amounts
As at 31 December/
30 September /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11187,334,832,511.90 9,315,122,160.11 9,355,138,722.11 7,741,801,401.33
APPENDIX I ACCOUNTANTS’ REPORT
– I-79 –


--- page 558 ---
15 Right-of-use assets
(1) As a lessee
Land Plant & buildings
Machinery &
equipment Total
Cost
As at 1 January 2022 /H1118/H1118/H1118/H1118/H11182,882,260,002.61 5,738,933,298.68 197,844,911.21 8,819,038,212.50
Additions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111844,847,559.38 175,423,278.68 3,741,436.55 224,012,274.61
Decreases /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111823,967,430.83 642,499,691.77 34,132,266.36 700,599,388.96
As at 31 December 2022 /H1118/H1118/H11182,903,140,131.16 5,271,856,885.59 167,454,081.40 8,342,451,098.15
Additions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118132,095,098.35 214,895,185.78 16,519,851.93 363,510,136.06
Decreases /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111828,725,683.24 1,231,646,499.20 173,870.14 1,260,546,052.58
As at 31 December 2023 /H1118/H1118/H11183,006,509,546.27 4,255,105,572.17 183,800,063.19 7,445,415,181.63
Additions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118408,384,637.70 454,381,073.46 23,038,336.94 885,804,048.10
Decreases /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118189,406,289.22 351,446,982.24 108,866.16 540,962,137.62
As at 31 December 2024 /H1118/H1118/H11183,225,487,894.75 4,358,039,663.39 206,729,533.97 7,790,257,092.11
Additions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118110,467,242.44 123,734,651.91 8,636,545.90 242,838,440.25
Decreases /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111854,023,441.50 36,435,695.64 – 90,459,137.14
As at 30 September 2025 /H1118/H11183,281,931,695.69 4,445,338,619.66 215,366,079.87 7,942,636,395.22------------- ------------- ------------- -------------
Accumulated depreciation
As at 1 January 2022 /H1118/H1118/H1118/H1118/H1118342,367,523.77 480,930,204.40 20,405,830.99 843,703,559.16
Charge for the year /H1118/H1118/H1118/H1118/H1118371,663,411.60 533,407,935.18 20,895,407.69 925,966,754.47
Decreases /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184,327,329.82 105,652,572.98 9,838.20 109,989,741.00
As at 31 December 2022 /H1118/H1118/H1118709,703,605.55 908,685,566.60 41,291,400.48 1,659,680,572.63
Charge for the year /H1118/H1118/H1118/H1118/H1118389,102,567.48 445,900,588.04 17,853,500.42 852,856,655.94
Decreases /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111813,956,693.43 327,216,624.27 75,737.55 341,249,055.25
As at 31 December 2023 /H1118/H1118/H11181,084,849,479.60 1,027,369,530.37 59,069,163.35 2,171,288,173.32
Charge for the year /H1118/H1118/H1118/H1118/H1118399,878,609.39 386,649,400.88 21,560,671.95 808,088,682.22
Decreases /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118172,140,712.31 139,232,586.20 108,866.16 311,482,164.67
As at 31 December 2024 /H1118/H1118/H11181,312,587,376.68 1,274,786,345.05 80,520,969.14 2,667,894,690.87
Charge for the period /H1118/H1118/H1118/H1118300,489,310.54 303,160,032.83 16,935,626.99 620,584,970.36
Decreases /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111847,644,280.93 27,089,038.49 – 74,733,319.42
As at 30 September 2025 /H1118/H11181,565,432,406.29 1,550,857,339.39 97,456,596.13 3,213,746,341.81------------- ------------- ------------- -------------
Provision for impairment
As at 1 January 2022 and
31 December 2022, 2023
and 2024 and
30 September 2025 /H1118/H1118/H1118/H1118 ––––-------------
------------- ------------- -------------
Carrying amounts
As at 31 December 2022 /H1118/H1118/H11182,193,436,525.61 4,363,171,318.99 126,162,680.92 6,682,770,525.52
As at 31 December 2023 /H1118/H1118/H11181,921,660,066.67 3,227,736,041.80 124,730,899.84 5,274,127,008.31
As at 31 December 2024 /H1118/H1118/H11181,912,900,518.07 3,083,253,318.34 126,208,564.83 5,122,362,401.24
As at 30 September 2025 /H1118/H11181,716,499,289.40 2,894,481,280.27 117,909,483.74 4,728,890,053.41
APPENDIX I ACCOUNTANTS’ REPORT
– I-80 –


--- page 559 ---
16 Intangible assets
(1) Intangible assets
Land use rights Trademark Software Emission right Total
Cost
As at 1 January 2022 /H1118/H1118/H1118/H1118/H1118/H1118926,948,482.11 219,380.00 22,520,647.52 483,564.67 950,172,074.30
Additions
– Purchases /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118109,199,158.42 – 3,296,040.25 12,760.84 112,507,959.51
– Transfers from investment
properties /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,184,804.76 – – – 1,184,804.76
Decreases
– Disposals /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 39,365.52 – 39,365.52
As at 31 December 2022 /H1118/H1118/H1118/H11181,037,332,445.29 219,380.00 25,777,322.25 496,325.51 1,063,825,473.05
Additions
– Purchases /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118222,209,595.94 – 7,879,808.11 1,022,842.61 231,112,246.66
– Transfers from investment
properties /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118304,980.88 – – – 304,980.88
Decreases
– Disposals /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,163,200.00 – 16,000.00 – 2,179,200.00
– Transfers out to investment
properties /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118263,750.02 – – – 263,750.02
As at 31 December 2023 /H1118/H1118/H1118/H11181,257,420,072.09 219,380.00 33,641,130.36 1,519,168.12 1,292,799,750.57
Additions
– Purchases /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111896,248,175.00 – 5,043,726.98 23,507.20 101,315,409.18
Decreases
– Disposals /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111841,337,610.00 – 100,000.00 – 41,437,610.00
As at 31 December 2024 /H1118/H1118/H1118/H11181,312,330,637.09 219,380.00 38,584,857.34 1,542,675.32 1,352,677,549.75
Additions
– Purchases /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111840,056,127.92 – 2,878,400.65 – 42,934,528.57
Decreases
– Disposals /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–––––
As at 30 September 2025 /H1118/H1118/H1118/H11181,352,386,765.01 219,380.00 41,463,257.99 1,542,675.32 1,395,612,078.32----------- ----------- ----------- ----------- -----------
Accumulated amortisation
As at 1 January 2022 /H1118/H1118/H1118/H1118/H1118/H111879,332,983.87 219,380.00 7,547,422.87 42,490.92 87,142,277.66
Additions
– Charge for the year /H1118/H1118/H1118/H1118/H111821,377,503.14 – 2,606,035.45 97,955.28 24,081,493.87
– Transfers from investment
properties /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118268,392.06 – – – 268,392.06
Decreases
– Disposals /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 17,058.34 – 17,058.34
As at 31 December 2022 /H1118/H1118/H1118/H1118100,978,879.07 219,380.00 10,136,399.98 140,446.20 111,475,105.25
Additions
– Charge for the year /H1118/H1118/H1118/H1118/H111822,666,276.20 – 3,298,303.08 300,726.56 26,265,305.84
– Transfers from investment
properties /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111879,636.6 9––– 79,636.69
Decreases
– Disposals /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118137,002.54 – 2,533.27 – 139,535.81
– Transfers out to investment
properties /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111868,593.8 8––– 68,593.88
As at 31 December 2023 /H1118/H1118/H1118/H1118123,519,195.54 219,380.00 13,432,169.79 441,172.76 137,611,918.09
Additions
– Charge for the year /H1118/H1118/H1118/H1118/H111826,134,295.86 – 3,637,328.76 300,350.59 30,071,975.21
Decreases
– Disposals /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,564,525.99 – 52,499.91 – 1,617,025.90
APPENDIX I ACCOUNTANTS’ REPORT
– I-81 –


--- page 560 ---
Land use rights Trademark Software Emission right Total
As at 31 December 2024 /H1118/H1118/H1118/H1118148,088,965.41 219,380.00 17,016,998.64 741,523.35 166,066,867.40
Additions
– Charge for the period /H1118/H1118/H1118/H111820,496,676.87 – 2,883,243.05 220,948.39 23,600,868.31
Decreases
– Disposals /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–––––
As at 30 September 2025 /H1118/H1118/H1118/H1118168,585,642.28 219,380.00 19,900,241.69 962,471.74 189,667,735.71----------- ----------- ----------- ----------- -----------
Provision for impairment
As at 1 January 2022 and
31 December 2022, 2023 and
2024 and 30 September 2025 /H1118/H1118 –––––-----------
----------- ----------- ----------- -----------
Carrying amounts
As at 31 December 2022 /H1118/H1118/H1118/H1118936,353,566.22 – 15,640,922.27 355,879.31 952,350,367.80
As at 31 December 2023 /H1118/H1118/H1118/H11181,133,900,876.55 – 20,208,960.57 1,077,995.36 1,155,187,832.48
As at 31 December 2024 /H1118/H1118/H1118/H11181,164,241,671.68 – 21,567,858.70 801,151.97 1,186,610,682.35
As at 30 September 2025 /H1118/H1118/H1118/H11181,183,801,122.73 – 21,563,016.30 580,203.58 1,205,944,342.61
(2) Land use rights pending certificates of ownership
Carrying amounts as at 31 December
Carrying amounts
as at 30 September
Reason why
certificates of
ownership are
pending2022 2023 2024 2025
Land use rights /H1118 78,551,783.14 229,618,340.55 157,448,128.50 190,305,981.40 Certificates are
in progress
17 Long-term deferred expenses
Y ear ended 31 December 2022
As at
1 January Additions
Amortisation
for the year Other decreases
As at
31 December
Leasehold improvements /H1118/H1118/H1118681,772.10 6,416,393.81 799,602.26 – 6,298,563.65
Others /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11186,898,114.75 – 554,364.75 – 6,343,750.00
Less: Provision for
impairment /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–––––
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11187,579,886.85 6,416,393.81 1,353,967.01 – 12,642,313.65
Y ear ended 31 December 2023
As at
1 January Additions
Amortisation
for the year Other decreases
As at
31 December
Leasehold improvements /H1118/H1118/H11186,298,563.65 59,448,194.63 6,637,491.77 – 59,109,266.51
Others /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11186,343,750.00 – 375,000.00 – 5,968,750.00
Less: Provision for
impairment /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–––––
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111812,642,313.65 59,448,194.63 7,012,491.77 – 65,078,016.51
APPENDIX I ACCOUNTANTS’ REPORT
– I-82 –


--- page 561 ---
Y ear ended 31 December 2024
As at
1 January Additions
Amortisation
for the year Other decreases
As at
31 December
Leasehold improvements /H1118/H1118/H111859,109,266.51 298,824.44 10,038,615.27 – 49,369,475.68
Others /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185,968,750.00 8,288,561.12 1,425,995.56 – 12,831,315.56
Less: Provision for
impairment /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–––––
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111865,078,016.51 8,587,385.56 11,464,610.83 – 62,200,791.24
Nine months ended 30 September 2025
As at
1 January Additions
Amortisation
for the period Other decreases
As at
30 September
Leasehold improvements /H1118/H1118/H111849,369,475.68 1,887,464.23 5,600,859.66 – 45,656,080.25
Others /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111812,831,315.56 857,186.88 2,539,190.21 – 11,149,312.23
Less: Provision for
impairment /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–––––
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111862,200,791.24 2,744,651.11 8,140,049.87 – 56,805,392.48
18 Deferred tax assets
As at 31 December As at 30 September
2022 2023 2024 2025
Deductible
or taxable
temporary
differences
Deferred
tax assets
Deductible
or taxable
temporary
differences
Deferred
tax assets
Deductible
or taxable
temporary
differences
Deferred
tax assets
Deductible
or taxable
temporary
differences
Deferred
tax assets
Deferred tax assets:
Provision for impairment
of assets /H1118/H1118/H1118/H1118/H1118/H11181,810,502.47 443,804.48 120,851.25 29,778.47 550,132.56 135,553.48 3,937,557.89 968,726.27
Deductible tax losses /H1118/H1118/H1118305,154,071.20 54,732,004.90 420,703,393.41 67,111,214.38 626,967,130.67 100,626,698.18 766,184,191.99 126,450,432.19
Others /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111852,407,133.46 10,629,861.79 12,898,957.11 2,311,828.43 ––––
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118359,371,707.13 65,805,671.17 433,723,201.77 69,452,821.28 627,517,263.23 100,762,251.66 770,121,749.88 127,419,158.46
19 Other non-current assets
As at 31 December As at 30 September
2022 2023 2024 2025
Land use right
deposits /H1118/H1118/H1118/H1118/H1118/H1118/H111877,443,869.86 41,001,417.00 14,722,317.00 13,609,917.00
Prepayments for
construction and
equipment /H1118/H1118/H1118/H1118/H1118/H1118373,115,119.44 508,476,962.35 605,294,825.02 620,062,095.52
Prepayment for the
consideration of
the purchase of
non-controlling
interest /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118219,929,823.00 – – –
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118670,488,812.30 549,478,379.35 620,017,142.02 633,672,012.52
APPENDIX I ACCOUNTANTS’ REPORT
– I-83 –


--- page 562 ---
20 Assets with restrictive ownership titles or right of use
As at 31 December As at 30 September
2022 2023 2024 2025 Details of restriction
Cash at bank
and on hand /H1118
2,883,258,860.99 5,652,713,362.12 4,107,091,241.92 1,766,477,938.58 Bank acceptance bill
deposit, loan
deposit, futures
deposit, letter of
credit deposit, etc.
Inventories /H1118/H1118/H111848,429,124.99 30,026,471.34 62,119,581.50 52,668,499.05 Reserve meat agreed
with the
government
Fixed assets /H1118/H1118/H11184,979,114,876.73 6,562,389,546.15 6,914,871,069.55 2,858,282,814.71 Assets used as
securities for
borrowings and
sale and leaseback
finance leases
Intangible
assets /H1118/H1118/H1118/H1118/H1118
183,851,635.44 157,681,758.03 145,637,531.71 63,157,029.01 Assets restricted due
to mortgage for
borrowing
Right-of-use
assets /H1118/H1118/H1118/H1118/H1118
– – 7,257,799.25 – Assets restricted due
to mortgage for
borrowing
Construction in
progress /H1118/H1118/H1118
– – 5,523,102.37 – Assets restricted due
to mortgage for
borrowing
Total /H1118/H1118/H1118/H1118/H1118/H11188,094,654,498.15 12,402,811,137.64 11,242,500,326.30 4,740,586,281.35
21 Short-term loans
(1) Short-term loans by category:
As at 31 December As at 30 September
2022 2023 2024 2025
Pledged loans /H1118/H1118/H1118/H1118/H11185,286,723,082.35 7,476,093,561.54 5,721,265,966.79 4,397,030,117.63
Secured loans /H1118/H1118/H1118/H1118/H1118616,622,486.82 354,000,000.00 423,529,358.29 –
Guaranteed loans /H1118/H1118/H111823,116,880,252.12 38,998,812,884.28 38,311,477,827.79 33,321,086,990.38
Unsecured loans /H1118/H1118/H1118/H1118145,213,858.70 100,117,638.89 801,395,972.22 2,042,145,750.01
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111829,165,439,679.99 46,929,024,084.71 45,257,669,125.09 39,760,262,858.02
See Note IV .20 assets with restrictive ownership titles or right of use for the category and amount of pledged
and secured assets for pledged loans and secured loans.
APPENDIX I ACCOUNTANTS’ REPORT
– I-84 –


--- page 563 ---
22 Bills payable
As at 31 December As at 30 September
2022 2023 2024 2025
Commercial
acceptance bills /H1118/H11181,810,179,320.57 606,446,821.24 420,595,874.36 –
Bank acceptance
bills /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,258,569,159.25 1,836,985,344.00 2,199,650,000.00 2,087,266,666.67
Letter of credit /H1118/H1118/H1118/H111888,305,568.25 70,471,555.25 103,478,979.32 7,797,105.13
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,157,054,048.07 2,513,903,720.49 2,723,724,853.68 2,095,063,771.80
The bills above are all due within one year.
23 Accounts payable
As at 31 December As at 30 September
2022 2023 2024 2025
Payables for goods /H1118/H111811,785,624,260.21 10,758,227,571.62 7,796,165,946.58 3,384,068,332.09
Payables for
construction and
equipment /H1118/H1118/H1118/H1118/H1118/H111813,133,021,830.05 12,534,926,747.10 9,988,928,638.16 8,695,481,981.18
Others /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118267,556,933.76 169,879,577.27 207,926,020.32 226,854,730.38
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111825,186,203,024.02 23,463,033,895.99 17,993,020,605.06 12,306,405,043.65
As at 31 December 2022, 2023 and 2024 and 30 September 2025, there were no significant accounts payable
with ageing of more than one year.
24 Contract liabilities
As at 31 December As at 30 September
2022 2023 2024 2025
Receipts in advance /H1118 849,730,442.94 570,960,230.30 599,509,850.21 907,896,945.58
25 Employee benefits payable
(1) Employee benefits payable:
Y ear ended 31 December 2022
Note As at 1 January Additions Decreases As at 31 December
Short-term employee
benefits /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118IV .25(2) 1,627,368,044.60 14,165,671,968.59 14,251,189,754.71 1,541,850,258.48
Post-employment benefits –
defined contribution plans /H1118 IV .25(3) 11,593,246.06 712,035,238.98 721,619,996.90 2,008,488.14
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,638,961,290.66 14,877,707,207.57 14,972,809,751.61 1,543,858,746.62
APPENDIX I ACCOUNTANTS’ REPORT
– I-85 –


--- page 564 ---
Y ear ended 31 December 2023
Note As at 1 January Additions Decreases As at 31 December
Short-term employee
benefits /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118IV .25(2) 1,541,850,258.48 15,649,653,913.71 15,854,407,473.92 1,337,096,698.27
Post-employment benefits –
defined contribution plans /H1118 IV .25(3) 2,008,488.14 849,191,852.01 847,901,376.08 3,298,964.07
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,543,858,746.62 16,498,845,765.72 16,702,308,850.00 1,340,395,662.34
Y ear ended 31 December 2024
Note As at 1 January Additions Decreases As at 31 December
Short-term employee
benefits /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118IV .25(2) 1,337,096,698.27 17,153,040,558.24 17,384,008,548.71 1,106,128,707.80
Post-employment benefits –
defined contribution plans /H1118 IV .25(3) 3,298,964.07 855,899,713.26 858,812,431.46 386,245.87
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,340,395,662.34 18,008,940,271.50 18,242,820,980.17 1,106,514,953.67
Nine months ended 30 September 2025
Note As at 1 January Additions Decreases As at 30 September
Short-term employee
benefits /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118IV .25(2) 1,106,128,707.80 13,310,466,552.26 13,711,742,781.32 704,852,478.74
Post-employment benefits –
defined contribution plans /H1118 IV .25(3) 386,245.87 715,215,476.35 715,027,188.23 574,533.99
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,106,514,953.67 14,025,682,028.61 14,426,769,969.55 705,427,012.73
(2) Short-term employee benefits
Y ear ended 31 December 2022
As at 1 January Additions Decreases As at 31 December
Salaries, bonuses and allowances /H1118/H1118/H1118/H11181,244,349,605.98 13,251,578,245.71 13,251,096,850.08 1,244,831,001.61
Staff welfare /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 312,730,419.98 312,730,419.98 –
Social insurance allowances
– Medical insurance /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111814,180,866.96 354,590,225.35 366,609,548.52 2,161,543.79
– Work-related injury insurance /H1118/H1118/H1118 558,814.45 38,520,205.39 38,936,695.98 142,323.86
Housing allowances /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11187,634,918.99 202,442,538.09 207,582,239.76 2,495,217.32
Labour union fund and staff and
workers’ education fund /H1118/H1118/H1118/H1118/H1118/H1118/H1118360,643,838.22 5,810,334.07 74,234,000.39 292,220,171.90
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,627,368,044.60 14,165,671,968.59 14,251,189,754.71 1,541,850,258.48
APPENDIX I ACCOUNTANTS’ REPORT
– I-86 –


--- page 565 ---
Y ear ended 31 December 2023
As at 1 January Additions Decreases As at 31 December
Salaries, bonuses and allowances /H1118/H1118/H1118/H11181,244,831,001.61 14,750,322,911.65 14,911,555,351.76 1,083,598,561.50
Staff welfare /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 184,463,099.20 184,463,099.20 –
Social insurance allowances
– Medical insurance /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,161,543.79 413,483,518.21 414,822,336.34 822,725.66
– Work-related injury insurance /H1118/H1118/H1118 142,323.86 45,975,407.29 46,064,646.10 53,085.05
Housing allowances /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,495,217.32 240,496,313.78 240,159,476.56 2,832,054.54
Labour union fund and staff and
workers’ education fund /H1118/H1118/H1118/H1118/H1118/H1118/H1118292,220,171.90 14,912,663.58 57,342,563.96 249,790,271.52
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,541,850,258.48 15,649,653,913.71 15,854,407,473.92 1,337,096,698.27
Y ear ended 31 December 2024
As at 1 January Additions Decreases As at 31 December
Salaries, bonuses and allowances /H1118/H1118/H1118/H11181,083,598,561.50 16,203,753,410.77 16,387,792,407.54 899,559,564.73
Staff welfare /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 224,142,106.90 224,142,106.90 –
Social insurance allowances
– Medical insurance /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118822,725.66 413,000,531.37 413,520,674.67 302,582.36
– Work-related injury insurance /H1118/H1118/H1118 53,085.05 40,411,989.74 40,427,980.32 37,094.47
Housing allowances /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,832,054.54 237,039,551.12 237,937,789.01 1,933,816.65
Labour union fund and staff and
workers’ education fund /H1118/H1118/H1118/H1118/H1118/H1118/H1118249,790,271.52 34,692,968.34 80,187,590.27 204,295,649.59
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,337,096,698.27 17,153,040,558.24 17,384,008,548.71 1,106,128,707.80
Nine months ended 30 September 2025
As at 1 January Additions Decreases As at 30 September
Salaries, bonuses and allowances /H1118/H1118/H1118/H1118899,559,564.73 12,534,883,004.60 12,901,540,785.65 532,901,783.68
Staff welfare /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 149,446,241.21 149,315,365.21 130,876.00
Social insurance allowances
– Medical insurance /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118302,582.36 346,915,391.88 346,858,111.66 359,862.58
– Work-related injury insurance /H1118/H1118/H1118 37,094.47 35,732,172.43 35,755,919.75 13,347.15
Housing allowances /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,933,816.65 198,218,973.56 198,285,806.07 1,866,984.14
Labour union fund and staff and
workers’ education fund /H1118/H1118/H1118/H1118/H1118/H1118/H1118204,295,649.59 45,270,768.58 79,986,792.98 169,579,625.19
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,106,128,707.80 13,310,466,552.26 13,711,742,781.32 704,852,478.74
(3) Post-employment benefits — defined contribution plans
Y ear ended 31 December 2022
As at 1 January Additions Decreases As at 31 December
Basic pension insurance /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111811,087,213.39 684,466,259.12 693,610,149.10 1,943,323.41
Unemployment insurance /H1118/H1118/H1118/H1118/H1118/H1118/H1118506,032.67 27,568,979.86 28,009,847.80 65,164.73
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111811,593,246.06 712,035,238.98 721,619,996.90 2,008,488.14
APPENDIX I ACCOUNTANTS’ REPORT
– I-87 –


--- page 566 ---
Y ear ended 31 December 2023
As at 1 January Additions Decreases As at 31 December
Basic pension insurance /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,943,323.41 816,555,580.15 815,334,190.56 3,164,713.00
Unemployment insurance /H1118/H1118/H1118/H1118/H1118/H1118/H111865,164.73 32,636,271.86 32,567,185.52 134,251.07
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,008,488.14 849,191,852.01 847,901,376.08 3,298,964.07
Y ear ended 31 December 2024
As at 1 January Additions Decreases As at 31 December
Basic pension insurance /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,164,713.00 823,335,911.92 826,122,177.53 378,447.39
Unemployment insurance /H1118/H1118/H1118/H1118/H1118/H1118/H1118134,251.07 32,563,801.34 32,690,253.93 7,798.48
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,298,964.07 855,899,713.26 858,812,431.46 386,245.87
Nine months ended 30 September 2025
As at 1 January Additions Decreases As at 30 September
Basic pension insurance /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118378,447.39 687,921,287.54 687,763,474.42 536,260.51
Unemployment insurance /H1118/H1118/H1118/H1118/H1118/H1118/H11187,798.48 27,294,188.81 27,263,713.81 38,273.48
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118386,245.87 715,215,476.35 715,027,188.23 574,533.99
26 Taxes payable
As at 31 December As at 30 September
2022 2023 2024 2025
Stamp duty /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111816,820,092.86 20,826,473.54 26,512,893.49 26,358,309.56
Individual income tax /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118122,776,622.69 17,562,436.41 15,209,814.83 223,832,967.07
Real estate tax /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11187,480,887.11 9,013,946.55 8,990,672.18 9,830,967.17
Land use tax /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184,651,166.34 4,839,706.15 4,925,901.08 5,205,080.66
Enterprise income tax /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118288,678.87 1,810,554.44 1,364,333.10 906,960.72
VAT /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,575,583.96 965,868.54 2,930,553.63 4,616,722.22
Others /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,182,257.17 1,057,689.66 1,721,645.40 2,739,195.14
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118154,775,289.00 56,076,675.29 61,655,813.71 273,490,202.54
27 Other payables
As at 31 December As at 30 September
Note 2022 2023 2024 2025
Dividends payable /H1118/H1118/H1118/H1118/H1118/H1118IV .27(1) – – 26,062,370.72 5,004,404,142.39
Other payables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118IV .27(2) 8,311,165,084.58 11,092,383,654.66 8,322,157,686.22 6,836,523,996.63
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11188,311,165,084.58 11,092,383,654.66 8,348,220,056.94 11,840,928,139.02
APPENDIX I ACCOUNTANTS’ REPORT
– I-88 –


--- page 567 ---
(1) Dividends payable
As at 31 December As at 30 September
2022 2023 2024 2025
Dividends payable /H1118/H1118/H1118/H1118/H1118 – – 26,062,370.72 5,004,404,142.39
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 26,062,370.72 5,004,404,142.39
(2) Other payables
As at 31 December As at 30 September
Note 2022 2023 2024 2025
Borrowings and interest /H1118/H1118/H1118/H1118/H1118/H1118/H11181,000,000,000.00 1,900,000,000.00 – –
Deposits /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118744,897,013.37 856,664,349.95 842,168,493.37 866,838,618.77
Restricted shares repurchase
obligation /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,951,628,547.10 772,137,238.85 – 1,048,427,078.64
Reverse factoring /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118IV .57(4) 4,578,859,381.75 7,518,139,495.19 7,410,372,506.25 4,458,318,905.80
Others /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111835,780,142.36 45,442,570.67 69,616,686.60 462,939,393.42
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11188,311,165,084.58 11,092,383,654.66 8,322,157,686.22 6,836,523,996.63
As at 31 December 2022, 2023 and 2024 and 30 September 2025, there were no significant other payables with
ageing of more than 1 year.
28 Non-current liabilities due within one year
Non-current liabilities due within one year by category are as follows:
As at 31 December As at 30 September
2022 2023 2024 2025
Long-term loans due
within one year /H1118/H1118/H1118/H1118/H1118/H11186,029,116,403.39 5,499,789,122.85 5,508,412,065.45 4,534,548,157.32
Debentures payable due
within one year /H1118/H1118/H1118/H1118/H1118281,939,281.77 28,787,116.42 43,297,338.18 44,477,759.62
Long-term payables due
within one year /H1118/H1118/H1118/H1118/H11181,253,560,622.17 1,993,400,306.05 1,581,839,696.10 904,135,849.64
Lease liabilities due
within one year /H1118/H1118/H1118/H1118/H11182,127,117,259.71 1,129,210,774.88 1,071,024,758.65 3,021,959,021.21
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11189,691,733,567.04 8,651,187,320.20 8,204,573,858.38 8,505,120,787.79
29 Other current liabilities
As at 31 December As at 30 September
Note 2022 2023 2024 2025
Short-term debentures payable /H1118/H1118/H1118IV .29(1) – – 1,003,569,177.30 301,938,698.65
V A T output tax to be paid /H1118/H1118/H1118/H1118/H1118 35,216,533.16 22,074,470.18 25,954,455.87 41,754,704.75
Endorsed unmatured bills that have
not been derecognised /H1118/H1118/H1118/H1118/H1118/H1118 – 20,000,000.00 152,100,000.00 60,000,000.00
Short-term sale and leaseback
finance leases payable /H1118/H1118/H1118/H1118/H1118/H1118 72,000,000.00 – – –
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118107,216,533.16 42,074,470.18 1,181,623,633.17 403,693,403.40
APPENDIX I ACCOUNTANTS’ REPORT
– I-89 –


--- page 568 ---
(1) The movements of short-term debentures payable:
During the years ended 31 December 2022 and 2023, there were no short-term debentures payable of the Group.
During the year ended 31 December 2024, the movements of short-term debentures payable:
Debenture Face value
Nominal
interest
rate Issuance date
Maturity
period
Issuance
amount
Balance
as at
1 January
Issuance
during the
year
Interest at
face value
Amortisation
of discounts
or premium
Repayment
during the
year
Balance
as at
31 December
Default
(Y/N)
24 Muyuan Food
SCP001 /H1118/H1118/H1118/H1118/H1118
500,000,000.00 2.50% 16 August
2024
270 days 499,050,000.00 – 499,050,000.00 4,726,027.40 485,555.56 – 504,261,582.96 N
24 Muyuan Food
SCP002 /H1118/H1118/H1118/H1118/H1118
500,000,000.00 2.10% 20 December
2024
270 days 499,230,660.38 – 499,230,660.38 – 76,933.96 – 499,307,594.34 N
Total /H1118/H1118/H1118/H1118/H1118/H1118/H11181,000,000,000.00 998,280,660.38 – 998,280,660.38 4,726,027.40 562,489.52 – 1,003,569,177.30
During the nine months ended 30 September 2025, the movements of short-term debentures payable:
Debenture Face value
Nominal
interest
rate Issuance date
Maturity
period
Issuance
amount
Balance
as at
1 January
Issuance
during the
period
Interest at
face value
Amortisation
of discounts
or premium
Repayment
during the
period
Balance
as at
30 September
Default
(Y/N)
24 Muyuan Food
SCP001 /H1118/H1118/H1118/H1118/H1118
500,000,000.00 2.50% 16 August
2024
270 days 499,050,000.00 504,261,582.96 – 4,520,547.94 464,444.44 509,246,575.34 – N
24 Muyuan Food
SCP002 /H1118/H1118/H1118/H1118/H1118
500,000,000.00 2.10% 20 December
2024
270 days 499,230,660.38 499,307,594.34 – 7,767,123.29 692,405.66 507,767,123.29 – N
25 Muyuan Food
SCP001 /H1118/H1118/H1118/H1118/H1118
300,000,000.00 1.95% 9 May 2025 270 days 299,550,000.00 – 299,550,000.00 2,163,698.65 225,000.00 – 301,938,698.65 N
Total /H1118/H1118/H1118/H1118/H1118/H1118/H11181,300,000,000.00 1,297,830,660.38 1,003,569,177.30 299,550,000.00 14,451,369.88 1,381,850.10 1,017,013,698.63 301,938,698.65
APPENDIX I ACCOUNTANTS’ REPORT
– I-90 –


--- page 569 ---
30 Long-term loans
As at 31 December As at 30 September
Note 2022 2023 2024 2025
Secured loans /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(i) 2,438,654,594.26 2,521,994,034.14 1,528,225,779.31 611,777,062.40
Guaranteed loans /H1118/H1118/H1118/H1118/H1118/H1118/H1118(ii) 14,182,365,877.59 12,798,216,611.99 12,777,640,042.96 11,057,185,330.20
Unsecured loans /H1118/H1118/H1118/H1118/H1118/H1118/H1118 54,481,247.51 43,033,309.64 – 790,114,111.11
Subtotal /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111816,675,501,719.36 15,363,243,955.77 14,305,865,822.27 12,459,076,503.71
Less: Long-term loans due
within one year /H1118/H1118/H1118/H1118/H1118/H1118IV .28 6,029,116,403.39 5,499,789,122.85 5,508,412,065.45 4,534,548,157.32
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111810,646,385,315.97 9,863,454,832.92 8,797,453,756.82 7,924,528,346.39
Notes:
(i) The secured loans were secured by fixed assets and intangible assets of subsidiaries of the Group. As
at 31 December 2022, 2023 and 2024 and 30 September 2025, the range of interest rates of the secured
loans were 4.05%-5.80%, 3.50%-5.50%, 3.15%-5.50% and 3.05%-4.20%, respectively.
(ii) The guaranteed loans were guaranteed by the Company, Mr. Qin Yinglin, Ms. Qian Ying and Henan
Muyuan Construction Engineering Co., Ltd. As at 31 December 2022, 2023 and 2024 and 30 September
2025, the range of interest rates of the guaranteed loans were 2.01%-6.18%, 2.00%-6.09%, 2.90%-
5.80% and 2.25%-5.35%, respectively.
31 Debentures payable
(1) Debentures payable
As at 31 December As at 30 September
2022 2023 2024 2025
20 Muyuan MTN001 /H1118/H1118/H1118120,000,000.00 – – –
20 Muyuan MTN002 /H1118/H1118/H1118140,000,000.00 – – –
25 Muyuan MTN001 /H1118/H1118/H1118 – – – 1,000,000,000.00
25 Muyuan MTN002 /H1118/H1118/H1118 – – – 500,000,000.00
25 Muyuan MTN003 /H1118/H1118/H1118 – – – 500,000,000.00
Convertible bonds
(Muyuan convertible
bonds) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11189,543,909,100.00 9,543,554,900.00 9,543,193,500.00 9,543,035,900.00
Undue interest payable /H1118/H111821,939,281.77 28,787,116.42 43,297,338.18 44,477,759.62
Interest adjustment /H1118/H1118/H1118/H1118/H1118(622,631,385.23) (336,754,091.92) (77,649,808.66) 95,162,917.00
Subtotal /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11189,203,216,996.54 9,235,587,924.50 9,508,841,029.52 11,682,676,576.62
Less: Debentures payable
due within one year /H1118/H1118/H1118281,939,281.77 28,787,116.42 43,297,338.18 44,477,759.62
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11188,921,277,714.77 9,206,800,808.08 9,465,543,691.34 11,638,198,817.00
APPENDIX I ACCOUNTANTS’ REPORT
– I-91 –


--- page 570 ---
(2) Details of debentures payable (excluding other financial instruments classified as financial liabilities, such as
preference shares and perpetual bonds):
During the Track Record Period, basic information of debentures payable of the Group:
Debenture Face value Nominal interest rate
Issuance
date Issuance amount
Maturity
period
Poverty alleviation corporate
bonds (19 Muyuan 01) /H1118/H1118/H1118
800,000,000.00 7.00% 22 January
2019
792,964,000.00 3 years
20 Muyuan MTN001 /H1118/H1118/H1118/H1118/H1118500,000,000.00 The first year 4.11%
The second year 4.11%
The third year 4.50%
22 April
2020
496,250,000.00 2+1 years
20 Muyuan MTN002 /H1118/H1118/H1118/H1118/H1118300,000,000.00 4.50% 28 May
2020
298,920,000.00 2+1 years
Convertible bonds (Muyuan
convertible bonds) /H1118/H1118/H1118/H1118/H1118
9,550,000,000.00 The first year 0.20%
The second year 0.40%
The third year 0.80%
The fourth year 1.20%
The fifth year 1.50%
The sixth year 2.00%
16 August
2021
8,510,799,604.63 6 years
25 Muyuan MTN001 /H1118/H1118/H1118/H1118/H11181,000,000,000.00 2.40% 15 January
2025
995,900,000.00 2 years
25 Muyuan MTN002 /H1118/H1118/H1118/H1118/H1118500,000,000.00 2.30% 17 April
2025
498,200,000.00 2 years
25 Muyuan MTN003 /H1118/H1118/H1118/H1118/H1118500,000,000.00 2.15% 22 July
2025
498,400,000.00 2 years
During the Track Record Period, movement of debentures payable of the Group:
Y ear ended 31 December 2022
Debenture
As at
1 January
Interest at
face value
Amortisation of
discounts or
premium
Repayment
during the year
Conversion
during the
year
As at
31 December
Default
(Y/N)
Poverty alleviation
corporate bonds (19
Muyuan 01) /H1118/H1118/H1118/H1118/H1118853,592,490.57 1,886,695.92 563,613.51 856,042,800.00 – – N
20 Muyuan MTN001 /H1118/H1118 512,433,127.48 10,048,767.12 1,811,119.16 400,550,000.00 – 123,743,013.76 N
20 Muyuan MTN002 /H1118/H1118 307,510,131.27 9,125,753.46 626,855.00 173,500,000.00 – 143,762,739.73 N
Convertible bonds
(Muyuan convertible
bonds) /H1118/H1118/H1118/H1118/H1118/H1118/H11188,632,982,867.38 26,309,925.56 301,607,117.24 19,097,767.13 6,090,900.00 8,935,711,243.05 N
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111810,306,518,616.70 47,371,142.06 304,608,704.91 1,449,190,567.13 6,090,900.00 9,203,216,996.54
Y ear ended 31 December 2023
Debenture
As at
1 January
Interest at
face value
Amortisation of
discounts or
premium
Repayment
during the year
Conversion
during the
year
As at
31 December
Default
(Y/N)
20 Muyuan MTN001 /H1118/H1118 123,743,013.76 1,656,986.24 – 125,400,000.00 – – N
20 Muyuan MTN002 /H1118/H1118 143,762,739.73 2,537,260.27 – 146,300,000.00 – – N
Convertible bonds
(Muyuan convertible
bonds) /H1118/H1118/H1118/H1118/H1118/H1118/H11188,935,711,243.05 52,528,691.47 285,856,676.64 38,174,418.40 334,268.26 9,235,587,924.50 N
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11189,203,216,996.54 56,722,937.98 285,856,676.64 309,874,418.40 334,268.26 9,235,587,924.50
APPENDIX I ACCOUNTANTS’ REPORT
– I-92 –


--- page 571 ---
Y ear ended 31 December 2024
Debenture
As at
1 January
Interest at
face value
Amortisation of
discounts or
premium
Repayment
during the year
Conversion
during the
year
As at
31 December
Default
(Y/N)
Convertible bonds
(Muyuan convertible
bonds) /H1118/H1118/H1118/H1118/H1118/H1118/H11189,235,587,924.50 90,859,141.86 259,098,467.82 76,347,552.00 356,952.66 9,508,841,029.52 N
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11189,235,587,924.50 90,859,141.86 259,098,467.82 76,347,552.00 356,952.66 9,508,841,029.52
Nine months ended 30 September 2025
Debenture
As at
1 January
Issuance during
the period
Interest at face
value
Amortisation of
discounts or
premium
Repayment
during the
period
Conversion
during the
period
As at
30 September
Default
(Y/N)
25 Muyuan MTN001 /H1118 – 995,900,000.00 18,000,000.00 1,537,499.97 – – 1,015,437,499.97 N
25 Muyuan MTN002 /H1118 – 498,200,000.00 5,749,999.98 450,000.00 – – 504,399,999.98 N
25 Muyuan MTN003 /H1118 – 498,400,000.00 2,687,500.00 200,000.00 – – 501,287,500.00 N
Convertible bonds
(Muyuan convertible
bonds) /H1118/H1118/H1118/H1118/H1118/H11189,508,841,029.52 – 89,265,784.05 178,120,830.47 114,522,713.45 153,353.92 9,661,551,576.67 N
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11189,508,841,029.52 1,992,500,000.00 115,703,284.03 180,308,330.44 114,522,713.45 153,353.92 11,682,676,576.62
For the years ended 31 December 2022, 2023 and 2024 and the nine months ended 30 September 2025, due
to the conversion of convertible bonds into shares, the amount of debt components of convertible bonds derecognised
by the Group was RMB6,090,900.00, RMB334,268.26, RMB356,952.66 and RMB153,353.92, respectively; the
amount of other equity instruments derecognised was RMB649,197.71, RMB37,752.34, RMB38,519.75 and
RMB16,797.76, respectively; and the amount of share capital recognised was RMB127,500.00, RMB7,488.00,
RMB7,802.00 and RMB3,268.00, respectively; and the amount of capital reserve (share premium) recognised was
RMB6,230,032.18, RMB363,366.59, RMB386,681.88 and RMB166,324.60, respectively.
32 Lease liabilities
As at 31 December As at 30 September
Note 2022 2023 2024 2025
Long-term lease liabilities /H1118/H1118 6,511,752,792.11 5,240,797,839.43 5,425,730,660.22 5,253,351,719.42
Less: Lease liabilities due
within one year /H1118/H1118/H1118/H1118/H1118/H1118IV .28 2,127,117,259.71 1,129,210,774.88 1,071,024,758.65 3,021,959,021.21
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184,384,635,532.40 4,111,587,064.55 4,354,705,901.57 2,231,392,698.21
33 Long-term payables
As at 31 December As at 30 September
Note 2022 2023 2024 2025
Sale and leaseback finance
leases payable /H1118/H1118/H1118/H1118/H1118/H1118/H11183,186,275,033.00 4,555,001,586.89 2,858,036,407.01 1,808,181,976.18
Other long-term payables /H1118/H1118 300,750,000.00 322,704,640.04 27,825,681.14 27,458,198.24
Less: Unrecognised financing
costs /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118235,966,367.74 268,581,574.94 126,462,375.45 80,327,215.78
Subtotal /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,251,058,665.26 4,609,124,651.99 2,759,399,712.70 1,755,312,958.64
Less: Long-term payables
due within one year /H1118/H1118/H1118/H1118IV .28 1,253,560,622.17 1,993,400,306.05 1,581,839,696.10 904,135,849.64
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,997,498,043.09 2,615,724,345.94 1,177,560,016.60 851,177,109.00
APPENDIX I ACCOUNTANTS’ REPORT
– I-93 –


--- page 572 ---
34 Deferred income
Y ear ended 31 December 2022
As at 1 January Additions Decreases As at 31 December
Grant /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118488,452,169.74 299,532,076.02 102,022,718.03 685,961,527.73
Internal sales V A T /H1118/H1118/H1118/H1118/H1118/H111824,263,541.63 1,407,075,077.65 1,357,038,237.74 74,300,381.54
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118512,715,711.37 1,706,607,153.67 1,459,060,955.77 760,261,909.27
Y ear ended 31 December 2023
As at 1 January Additions Decreases As at 31 December
Grant /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118685,961,527.73 210,688,082.96 96,948,040.22 799,701,570.47
Internal sales V A T /H1118/H1118/H1118/H1118/H1118/H111874,300,381.54 2,051,367,824.82 2,014,078,218.47 111,589,987.89
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118760,261,909.27 2,262,055,907.78 2,111,026,258.69 911,291,558.36
Y ear ended 31 December 2024
As at 1 January Additions Decreases As at 31 December
Grant /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118799,701,570.47 100,262,134.75 121,099,597.92 778,864,107.30
Internal sales V A T /H1118/H1118/H1118/H1118/H1118/H1118111,589,987.89 2,199,219,510.22 2,248,955,006.88 61,854,491.23
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118911,291,558.36 2,299,481,644.97 2,370,054,604.80 840,718,598.53
Nine months ended 30 September 2025
As at 1 January Additions Decreases As at 30 September
Grant /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118778,864,107.30 73,880,461.98 92,217,870.86 760,526,698.42
Internal sales V A T /H1118/H1118/H1118/H1118/H1118/H111861,854,491.23 2,943,368,178.44 2,893,926,283.07 111,296,386.60
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118840,718,598.53 3,017,248,640.42 2,986,144,153.93 871,823,085.02
35 Share capital
Y ear ended 31 December
Nine months ended
30 September
Note 2022 2023 2024 2025
As at 1 January /H1118/H1118/H1118/H1118/H1118/H1118/H11185,262,358,594.00 5,472,283,869.00 5,465,350,578.00 5,462,767,761.00
Issuance of new shares /H1118/H1118/H1118/H1118(i) 150,112,584.0 0–––
Others /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(ii) 59,812,691.00 (6,933,291.00) (2,582,817.00) 3,268.00
As at 31 December/
30 September /H1118/H1118/H1118/H1118/H1118/H1118/H11185,472,283,869.00 5,465,350,578.00 5,462,767,761.00 5,462,771,029.00
Notes:
(i) On 22 November 2022, pursuant to the Approval of the CSRC on the Private Share Placement of
Muyuan Foods Co., Ltd. (CSRC Approval [2022] No. 2370), the Company privately placed 150,112,584
shares at an issue price of RMB39.97 per share, with total proceeds amounting to
RMB5,999,999,982.48. After deducting of issuance costs with an amount of RMB12,893,312.23, the net
proceeds amounted to RMB5,987,106,670.25, which comprising an increase in share capital of
RMB150,112,584.00 and an increase in capital reserve of RMB5,836,994,086.25.
APPENDIX I ACCOUNTANTS’ REPORT
– I-94 –


--- page 573 ---
(ii) During the year ended 31 December 2022, other changes in the Company’s share capital included an
increase of 59,685,191 shares from the grant of restricted shares under the share incentive scheme and
an increase of 127,500 shares due to the conversion of convertible bonds.
During the year ended 31 December 2023, other changes in the Company’s share capital included a
decrease of 6,940,779 shares resulting from the repurchase and cancellation of restricted shares granted
to incentive recipients that had not yet met unlocking conditions and an increase of 7,488 shares due to
the conversion of convertible bonds.
During the year ended 31 December 2024, other changes in the Company’s share capital included a
decrease of 2,590,619 shares resulting from the repurchase and cancellation of restricted shares granted
to incentive recipients that had not yet met unlocking conditions and an increase of 7,802 shares due to
the conversion of convertible bonds.
During the nine months ended 30 September 2025, other changes in the Company’s share capital
included an increase of 3,268 shares due to the conversion of convertible bonds.
(iii) The par value of the Company’s ordinary shares is RMB1.00 per share.
APPENDIX I ACCOUNTANTS’ REPORT
– I-95 –


--- page 574 ---
36 Other equity instruments
(1) Other equity instruments that remain outstanding as at 31 December 2022, 2023 and 2024 and 30 September 2025:
Outstanding financial
instruments Issuance date
Accounting
classification
Dividend or
interest rate
Issuance
price Quantity Amount
Maturity date
or renewal
status Conditions for conversion Conversion status
Muyuan convertible bonds /H1118/H111816 August
2021
Compound
financial
instruments
The first year
0.20%
100 95,500,000 9,550,000,000.00 Unexpired The conversion period starts
from the first trading day
(21 February 2022) six
months after the issuance
end date (20 August 2021)
to the maturity date of
convertible bonds (15
August 2027, postponed
in case of holidays)
As of 30 September 2025,
146,058 shares have
been converted from
Muyuan convertible
bonds.
The second year
0.40%
The third year
0.80%
The fourth year
1.20%
The fifth year
1.50%
The sixth year
2.00%
On 16 August 2021, the Company publicly issued 95,500,000 convertible bonds, with a face value of RMB100.00 each and with total proceeds of RMB9,550,0 00,000.00. After
deducting the issuance cost, the net proceeds were RMB9,528,685,000.00, among which RMB1,017,885,395.37 was recognised as equity components.
(2) Movement of other equity instruments during the Track Record Period:
Outstanding financial
instruments
As at 1 January 2022 Additions Decreases As at 31 December 2022
Quantity Carrying value Quantity Carrying value Quantity Carrying value Quantity Carrying value
Muyuan Y ou01 /H1118/H1118/H1118/H1118/H1118/H111824,759,300.00 2,459,689,826.11 – – 24,759,300.00 2,459,689,826.11 – –
Muyuan convertible
bonds /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111895,500,000.00 1,017,885,395.37 – – 60,909.00 649,197.71 95,439,091.00 1,017,236,197.66
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118120,259,300.00 3,477,575,221.48 – – 24,820,209.00 2,460,339,023.82 95,439,091.00 1,017,236,197.66
APPENDIX I ACCOUNTANTS’ REPORT
– I-96 –


--- page 575 ---
Outstanding financial
instruments
As at 1 January 2023 Additions Decreases As at 31 December 2023
Quantity Carrying value Quantity Carrying value Quantity Carrying value Quantity Carrying value
Muyuan convertible
bonds /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111895,439,091.00 1,017,236,197.66 – – 3,542.00 37,752.34 95,435,549.00 1,017,198,445.32
Outstanding financial
instruments
As at 1 January 2024 Additions Decreases As at 31 December 2024
Quantity Carrying value Quantity Carrying value Quantity Carrying value Quantity Carrying value
Muyuan convertible
bonds /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111895,435,549.00 1,017,198,445.32 – – 3,614.00 38,519.75 95,431,935.00 1,017,159,925.57
Outstanding financial
instruments
As at 1 January 2025 Additions Decreases As at 30 September 2025
Quantity Carrying value Quantity Carrying value Quantity Carrying value Quantity Carrying value
Muyuan convertible
bonds /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111895,431,935.00 1,017,159,925.57 – – 1,576.00 16,797.76 95,430,359.00 1,017,143,127.81
The decrease of carrying amounts of Muyuan Y ou01 during the year ended 31 December 2022 was due to the repurchase of preference shares.
The decrease of carrying amounts of Muyuan convertible bonds during the Track Record Period was due to partial conversion of convertible bonds into sh ares.
APPENDIX I ACCOUNTANTS’ REPORT
– I-97 –


--- page 576 ---
37 Capital reserve
Note Share premium Other capital reserves Total
As at 1 January 2022 /H1118/H1118/H1118/H1118/H1118 8,072,839,549.84 1,049,696,801.37 9,122,536,351.21
Additions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(i) 8,566,503,417.43 992,112,749.58 9,558,616,167.01
Decreases /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(i) 88,139,874.90 961,672,460.68 1,049,812,335.58
As at 31 December 2022 /H1118/H1118/H1118 16,551,203,092.37 1,080,137,090.27 17,631,340,182.64
Additions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(ii) 769,444,376.45 382,512,293.45 1,151,956,669.90
Decreases /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(ii) 322,667,604.67 769,081,009.86 1,091,748,614.53
As at 31 December 2023 /H1118/H1118/H1118 16,997,979,864.15 693,568,373.86 17,691,548,238.01
Additions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(iii) 635,930,230.51 63,533,870.89 699,464,101.40
Decreases /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(iii) 4,026,037,121.65 635,543,548.63 4,661,580,670.28
As at 31 December 2024 /H1118/H1118/H1118 13,607,872,973.01 121,558,696.12 13,729,431,669.13
Additions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(iv) 89,736,746.79 79,215,131.55 168,951,878.34
Decreases /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(iv) 951,936,890.98 – 951,936,890.98
As at 30 September 2025 /H1118/H1118/H1118 12,745,672,828.82 200,773,827.67 12,946,446,656.49
Notes:
(i) For the year ended 31 December 2022, the increase in share premium was attributable to the transfer
from other capital reserves to share premium upon the unlocking of restricted shares of
RMB961,672,460.68, the issuance of restricted shares of RMB1,761,606,838.32, the private shares
placement of RMB5,836,994,086.25, and the conversion of convertible bonds of RMB6,230,032.18. The
decrease in share premium was due to the acquisition of non-controlling interests of RMB71,899,701.01
and the redemption of all preference shares of RMB16,240,173.89.
For the year ended 31 December 2022, the increase in other capital reserves was mainly due to the
recognition of expenses in respect of the restricted share incentive scheme amounting to
RMB850,037,704.02 and the receipt of RMB86,888,084.29 in relation to the sales of the 5,794,424
convertible bonds by Mr. Qin Yinglin. The decrease in other capital reserves was due to the transfer from
other capital reserves to share premium upon the unlocking of restricted shares amounting to
RMB961,672,460.68.
(ii) For the year ended 31 December 2023, the increase in share premium was attributable to the transfer
from other capital reserves to share premium upon the unlocking of restricted shares of
RMB769,081,009.86, and the conversion of convertible bonds of RMB363,366.59. The decrease in
share premium was due to the repurchase and cancellation of restricted shares granted to incentive
recipients that had not yet met unlocking conditions, resulting in a reduction of RMB185,096,467.64,
and the acquisition of non-controlling interests of RMB137,571,137.03.
For the year ended 31 December 2023, the increase in other capital reserves was mainly due to the
recognition of expenses in respect of the restricted share incentive scheme amounting to
RMB343,962,903.69; while the decrease was due to the transfer from other capital reserves to share
premium upon the unlocking of restricted shares amounting to RMB769,081,009.86.
(iii) For the year ended 31 December 2024, the increase in share premium was attributable to the transfer
from other capital reserves to share premium upon the unlocking of restricted shares of
RMB635,543,548.63, and the conversion of convertible bonds of RMB386,681.88. The decrease in
share premium was due to the repurchase and cancellation of restricted shares granted to incentive
recipients that had not yet met conditions, resulting in a reduction of RMB75,475,760.98, and the
acquisition of non-controlling interests of RMB3,950,561,360.67.
For the year ended 31 December 2024, the increase in other capital reserves was mainly due to the
recognition of expenses in respect of the restricted share incentive scheme amounting to
RMB35,645,926.90, while the decrease was due to the transfer from other capital reserves to share
premium upon the unlocking of restricted shares amounting to RMB635,543,548.63.
APPENDIX I ACCOUNTANTS’ REPORT
– I-98 –


--- page 577 ---
(iv) For the nine months ended 30 September 2025, the increase in share premium was attributable to the
conversion of convertible bonds of RMB166,324.60 and the acquisition of non-controlling interests of
RMB89,570,422.19 while the decrease amounting to RMB951,936,890.98 was due to the granting of
restricted shares.
For the nine months ended 30 September 2025, the increase in other capital reserves was mainly due to
the recognition of expenses in respect of the restricted share incentive scheme.
38 Treasury shares
Note
Repurchase of
ordinary shares
Restricted shares
repurchase obligation Total
As at 1 January 2022 /H1118/H1118/H1118/H1118/H1118/H1118/H1118 – 1,421,551,682.52 1,421,551,682.52
Additions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(i) – 1,821,592,029.32 1,821,592,029.32
Decreases /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(i) – 1,158,720,780.25 1,158,720,780.25
As at 31 December 2022 /H1118/H1118/H1118/H1118/H1118 – 2,084,422,931.59 2,084,422,931.59
Additions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(ii) 1,999,993,232.40 – 1,999,993,232.40
Decreases /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(ii) – 1,265,545,775.16 1,265,545,775.16
As at 31 December 2023 /H1118/H1118/H1118/H1118/H1118 1,999,993,232.40 818,877,156.43 2,818,870,388.83
Additions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(iii) 1,000,001,904.21 – 1,000,001,904.21
Decreases /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(iii) – 818,877,156.43 818,877,156.43
As at 31 December 2024 /H1118/H1118/H1118/H1118/H1118 2,999,995,136.61 – 2,999,995,136.61
Additions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(iv) 2,001,488,652.73 1,048,427,078.64 3,049,915,731.37
Decreases /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(iv) 1,999,993,232.40 – 1,999,993,232.40
As at 30 September 2025 /H1118/H1118/H1118/H1118/H1118 3,001,490,556.94 1,048,427,078.64 4,049,917,635.58
Notes:
(i) For the year ended 31 December 2022, the increase in treasury shares was attributable to the repurchase
obligation recognised for restricted shares granted to incentive recipients amounting to
RMB1,821,592,029.32.
For the year ended 31 December 2022, the decrease in treasury shares was due to the unlocking of
restricted shares amounting to RMB1,142,786,190.18 and the reversal of cash dividends attributable to
restricted shares that are expected to be unlocked in the future amounting to RMB15,934,590.07.
(ii) For the year ended 31 December 2023, the increase in treasury shares was due to the repurchase of
ordinary shares amounting to RMB1,999,993,232.40. On 12 December 2022, pursuant to the 15th
meeting of the fourth Board of Directors, the Proposal on Share Repurchase was approved. On 15
December 2022, the Company disclosed the Share Repurchase Report, stating that the Company
intended to use its own funds to repurchase its A share RMB-denominated ordinary shares through
centralised bidding, with a total repurchase amount of not less than RMB1 billion (inclusive) and not
more than RMB2 billion (inclusive), at a repurchase price not exceeding RMB72.24 (inclusive) per
share. During the year ended 31 December 2023, the Company had repurchased 41,870,091 shares
through centralised bidding, with a total payment of RMB1,999,993,232.40 (including commissions,
title transfer costs, and other transaction costs).
For the year ended 31 December 2023, the decrease in treasury shares was due to the unlocking of
restricted shares amounting to RMB1,053,529,196.17 and the repurchase and cancellation of restricted
shares granted to incentive recipients that had not yet met unlocking conditions, resulting in a reduction
of RMB192,037,246.64, and the reversal of cash dividends attributed to the expected unlocking portion
of restricted shares amounting to RMB19,979,332.35.
APPENDIX I ACCOUNTANTS’ REPORT
– I-99 –


--- page 578 ---
(iii) For the year ended 31 December 2024, the increase in treasury shares was due to the repurchase of
ordinary shares amounting to RMB1,000,001,904.21. On 25 September 2024, pursuant to the 29th
meeting of the fourth Board of Directors, the Proposal on Share Repurchase was approved. On 27
September 2024, the Company disclosed the Share Repurchase Report, stating that the Company
intended to use its own funds to repurchase its A-share RMB-denominated ordinary shares through
centralised bidding, with a total repurchase amount of not less than RMB3 billion (inclusive) and not
more than RMB4 billion (inclusive), at a repurchase price not exceeding RMB58.60 per share. Since the
Company made profit distribution for the first three quarters of 2024, the repurchase price was adjusted
on 30 December 2024 to no more than RMB57.78 per share (inclusive). During the year ended 31
December 2024, the Company had repurchased 24.45 million shares through centralised bidding, with
a total payment of RMB1,000,001,904.21 (including commissions, title transfer cost, and other
transaction costs).
For the year ended 31 December 2024, the decrease in treasury shares was due to the unlocking of
restricted shares amounting to RMB742,919,994.89 and the repurchase and cancellation of restricted
shares granted to incentive recipients that had not yet met unlocking conditions, resulting in a reduction
of RMB75,957,161.54.
(iv) For the nine months ended 30 September 2025, the increase in treasury shares was due to the repurchase
of ordinary shares amounting to RMB2,001,488,652.73 and the repurchase obligation recognised for
restricted shares granted to incentive recipients amounting to RMB1,048,427,078.64. Pursuant to the
Proposal on Share Repurchase which was approved during the 29th meeting of the fourth Board of
Directors on 25 September 2024, during the nine months ended 30 September 2025, the Company had
repurchased 45.14 million shares through centralised bidding, with a total payment of
RMB2,001,488,652.73 (including commissions, title transfer cost, and other transaction costs).
For the nine months ended 30 September 2025, the decrease in treasury shares was due to the grant of
restricted shares.
39 Other comprehensive income
Y ear ended 31 December 2022
Balance
attributable to
shareholders of
the Company as
at 1 January
Current year
before-tax
amount
Less: Previously
recognised
amount
transferred to
profit or loss
Less:
Income tax
expense
Net-of-tax
amount
attributable to
shareholders of
the Company
Net-of-tax
amount
attributable to
non-controlling
interests
Balance
attributable to
shareholders of
the Company
as at
31 December
Items that may be
reclassified to profit
or loss
Including:
Cash flow hedge
reserve /H1118/H1118/H1118/H1118/H1118/H1118(53,809,160.77) 52,046,682.67 (4,804,014.92) – 56,850,697.59 – 3,041,536.82
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(53,809,160.77) 52,046,682.67 (4,804,014.92) – 56,850,697.59 – 3,041,536.82
APPENDIX I ACCOUNTANTS’ REPORT
– I-100 –


--- page 579 ---
Y ear ended 31 December 2023
Balance
attributable to
shareholders of
the Company as
at 1 January
Current year
before-tax
amount
Less: Previously
recognised
amount
transferred to
profit or loss
Less:
Income tax
expense
Net-of-tax
amount
attributable to
shareholders of
the Company
Net-of-tax
amount
attributable to
non-controlling
interests
Balance
attributable to
shareholders of
the Company
as at
31 December
Items that will not be
reclassified to profit
or loss
Including:
Changes in fair value
of investments in
other equity
instruments /H1118/H1118/H1118/H1118 – (36,475,405.75) – – (36,475,405.75) – (36,475,405.75)
Items that may be
reclassified to profit
or loss
Including:
Cash flow hedge
reserve /H1118/H1118/H1118/H1118/H1118/H11183,041,536.82 31,762,220.00 3,041,536.82 – 28,720,683.18 – 31,762,220.00
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,041,536.82 (4,713,185.75) 3,041,536.82 – (7,754,722.57) – (4,713,185.75)
Y ear ended 31 December 2024
Balance
attributable to
shareholders of
the Company as
at 1 January
Current year
before-tax
amount
Less: Previously
recognised
amount
transferred to
profit or loss
Less:
Income tax
expense
Net-of-tax
amount
attributable to
shareholders of
the Company
Net-of-tax
amount
attributable to
non-controlling
interests
Balance
attributable to
shareholders of
the Company
as at
31 December
Items that will not be
reclassified to profit
or loss
Including:
Changes in fair value
of investments in
other equity
instruments /H1118/H1118/H1118/H1118(36,475,405.75) – – – – – (36,475,405.75)
Items that may be
reclassified to profit
or loss
Including:
Cash flow hedge
reserve /H1118/H1118/H1118/H1118/H1118/H111831,762,220.00 2,898,840.00 31,762,220.00 – (28,863,380.00) – 2,898,840.00
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(4,713,185.75) 2,898,840.00 31,762,220.00 – (28,863,380.00) – (33,576,565.75)
APPENDIX I ACCOUNTANTS’ REPORT
– I-101 –


--- page 580 ---
Nine months ended 30 September 2025
Balance
attributable to
shareholders of
the Company as
at 1 January
Current year
before-tax
amount
Less: Previously
recognised
amount
transferred to
profit or loss
Less:
Income tax
expense
Net-of-tax
amount
attributable to
shareholders of
the Company
Net-of-tax
amount
attributable to
non-controlling
interests
Balance
attributable to
shareholders of
the Company
as at
30 September
Items that will not be
reclassified to profit
or loss
Including:
Changes in fair value
of investments in
other equity
instruments /H1118/H1118/H1118/H1118(36,475,405.75) (17,792,568.62) – – (17,792,568.62) – (54,267,974.37)
Items that may be
reclassified to profit
or loss
Including:
Cash flow hedge
reserve /H1118/H1118/H1118/H1118/H1118/H11182,898,840.00 543,440.00 2,898,840.00 – (2,355,400.00) – 543,440.00
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(33,576,565.75) (17,249,128.62) 2,898,840.00 – (20,147,968.62) – (53,724,534.37)
40 Surplus reserve
Y ear ended 31 December
Nine months ended
30 September
2022 2023 2024 2025
As at 1 January /H1118/H1118/H1118/H1118/H1118/H1118/H11181,612,990,266.16 1,955,992,514.78 2,198,021,021.15 2,584,593,422.02
Additions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118343,002,248.62 242,028,506.37 386,572,400.87 –
Decreases /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118––––
As at 31 December/
30 September /H1118/H1118/H1118/H1118/H1118/H1118/H11181,955,992,514.78 2,198,021,021.15 2,584,593,422.02 2,584,593,422.02
41 Retained earnings
Y ear ended 31 December
Nine months ended
30 September
Note 2022 2023 2024 2025
As at 1 January /H1118/H1118/H1118/H1118/H1118/H1118/H111836,351,668,929.80 47,787,878,960.00 39,279,516,665.20 52,271,396,781.65
Add: Net profit/(loss) for
the year/period
attributable to
shareholders of the
Company /H1118/H1118/H1118/H1118/H1118/H1118 13,266,156,512.39 (4,263,280,820.31) 17,881,260,485.27 14,778,904,957.09
Less: Appropriation for
statutory surplus
reserve /H1118/H1118/H1118/H1118/H1118/H1118/H1118 343,002,248.62 242,028,506.37 386,572,400.87 –
Dividends to ordinary
shares /H1118/H1118/H1118/H1118/H1118/H1118/H1118IV .41(1) 1,318,580,993.57 4,003,052,968.12 4,502,807,967.95 8,087,283,056.70
Dividends to
preference shares /H1118/H1118 168,363,240.0 0–––
As at 31 December/
30 September /H1118/H1118/H1118/H1118/H1118/H1118/H111847,787,878,960.00 39,279,516,665.20 52,271,396,781.65 58,963,018,682.04
APPENDIX I ACCOUNTANTS’ REPORT
– I-102 –


--- page 581 ---
(1) Dividends payable to equity shareholders of the Company attributable to the reporting period
Y ear ended 31 December Nine months ended 30 September
Note 2022 2023 2024 2024 2025
(unaudited)
Interim dividend declared and
paid /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(i) – – 4,504,917,186.39 – –
Interim dividend declared /H1118/H1118/H1118(ii) –––– 5,004,404,142.39
Final dividend proposed after
the end of the year/period /H1118/H1118 (iii) 4,003,052,968.12 – 3,082,880,394.31 – –
The final dividend proposed after the end of the reporting period has not been recognised as a liability at the
end of the related reporting period.
(2) Dividends payable to equity shareholders of the Company attributable to the previous financial year,
approved and paid during the reporting period
Y ear ended 31 December Nine months ended 30 September
Note 2022 2023 2024 2024 2025
(unaudited)
Final dividend in respect of the
previous financial year,
approved and paid during the
year/period /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(iv) 1,318,580,993.57 4,003,052,968.12 – – 3,082,878,914.31
Notes:
(i) During each year ended 31 December 2022 and 2023, the Company did not declare or pay any interim
dividend.
For the year ended 31 December 2024, pursuant to the approval of interim extraordinary general meeting
of shareholders on 12 December 2024, the Company declared and paid interim dividend of RMB0.83
per share to equity shareholders on 30 December 2024.
(ii) During the nine months ended 30 September 2025, pursuant to the approval of Board of Directors on
20 August 2025, the Company declared interim dividend of RMB0.93 per share to equity shareholders
on 21 August 2025. The interim dividend was paid on 16 October 2025.
(iii) For the years ended 31 December 2022 and 2024, the Company proposed final dividend of RMB0.74
per share and RMB0.57 per share, respectively. For the year ended 31 December 2023, the Company did
not propose any final dividend.
(iv) Final dividends in respect of the previous financial year approved and paid during the years ended 31
December 2022 and 2023 and the nine months ended 30 September 2025 are RMB0.25 per share,
RMB0.74 per share and RMB0.57 per share, respectively. No final dividends in respect of the previous
financial year were approved or paid during the year ended 31 December 2024.
APPENDIX I ACCOUNTANTS’ REPORT
– I-103 –


--- page 582 ---
42 Revenue and operating costs
(1) Revenue and operating costs
Y ear ended 31 December Nine months ended 30 September
2022 2023 2024 2024 2025
Note Revenue Operating costs Revenue Operating costs Revenue Operating costs Revenue Operating costs Revenue Operating costs
(unaudited) (unaudited)
Principal activities /H1118/H1118/H1118/H1118/H1118/H1118/H1118124,337,162,864.85 102,567,093,010.64 110,316,791,925.59 106,908,425,915.69 137,499,516,761.04 111,252,505,176.13 96,501,479,982.12 79 ,794,688,155.02 111,098,784,415.07 90,243,415,202.19
Other operating activities /H1118/H1118/H1118/H1118 489,049,312.89 419,966,460.35 543,935,788.81 506,360,076.67 447,375,315.83 414,021,300.76 273,645,584.19 270,677,214.88 691,220,463.65 6 12,056,832.57
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118124,826,212,177.74 102,987,059,470.99 110,860,727,714.40 107,414,785,992.36 137,946,892,076.87 111,666,526,476.89 96,775,125,566.31 80 ,065,365,369.90 111,790,004,878.72 90,855,472,034.76
Including:
Revenue from contracts with
customers /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118IV .42(2) 124,816,556,982.87 102,978,683,082.27 110,842,158,860.08 107,406,523,410.82 137,928,380,089.83 111,638,575,160.04 96,765,974,625.41 80 ,044,504,493.20 111,775,896,359.71 90,837,174,582.56
Other income /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118 9,655,194.87 8,376,388.72 18,568,854.32 8,262,581.54 18,511,987.04 27,951,316.85 9,150,940.90 20,860,876.70 14,108,519.01 18,297,452.20
(2) Disaggregation of revenue and operating costs
For the year ended 31 December 2022:
Sales of hog business
Sales of slaughtering and meat
product business Feed ingredients trading Others Inter-segment elimination Total
Income Cost Income Cost Income Cost Income Cost Income Cost Income Cost
By type of business
– Sales of hog business /H1118/H1118/H1118/H1118119,744,018,933.43 97,687,351,297.58 –––– – ––– 1 19,744,018,933.43 97,687,351,297.58
– Sales of slaughtering and meat
product business /H1118/H1118/H1118/H1118/H1118/H1118 – – 14,718,143,089.45 14,791,650,369.94 – – – – – – 14,718,143,089.45 14,791,650,369.94
– Feed ingredients trading /H1118/H1118/H1118 –––– 5,509,168,371.40 5,455,481,222.96 – – – – 5,509,168,371.40 5,455,481,222.96
– Others /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118 –––––– 479,394,118.02 411,590,071.63 – – 479,394,118.02 411,590,071.63
Inter-segment elimination /H1118/H1118/H1118 –––––– – – (15,634,167,529.43) (15,367,389,879.84) (15,634,167,529.43) (15,367,389,879.84)
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118119,744,018,933.43 97,687,351,297.58 14,718,143,089.45 14,791,650,369.94 5,509,168,371.40 5,455,481,222.96 479,394,118.02 411,590,071. 63 (15,634,167,529.43) (15,367,389,879.84) 124,816,556,982.87 102,978,683,082.27
APPENDIX I ACCOUNTANTS’ REPORT
– I-104 –


--- page 583 ---
Sales of hog business
Sales of slaughtering and meat
product business Feed ingredients trading Others Inter-segment elimination Total
Income Cost Income Cost Income Cost Income Cost Income Cost Income Cost
By geographical regions
– the PRC /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118119,744,018,933.43 97,687,351,297.58 14,718,143,089.45 14,791,650,369.94 5,509,168,371.40 5,455,481,222.96 479,394,118.02 411,590,071. 63 (15,634,167,529.43) (15,367,389,879.84) 124,816,556,982.87 102,978,683,082.27
By timing of transfer of goods
– Revenue recognised at a point
in time /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118119,744,018,933.43 97,687,351,297.58 14,718,143,089.45 14,791,650,369.94 5,509,168,371.40 5,455,481,222.96 479,394,118.02 411,590,071. 63 (15,634,167,529.43) (15,367,389,879.84) 124,816,556,982.87 102,978,683,082.27
For the year ended 31 December 2023:
Sales of hog business
Sales of slaughtering and meat
product business Feed ingredients trading Others Inter-segment elimination Total
Income Cost Income Cost Income Cost Income Cost Income Cost Income Cost
By type of business
– Sales of hog business /H1118/H1118/H1118/H1118108,224,321,673.98 105,060,685,687.09 –––– – ––– 108,224,321,673.98 105,060,685,687.09
– Sales of slaughtering and meat
product business /H1118/H1118/H1118/H1118/H1118/H1118 – – 21,862,329,292.88 21,826,834,288.38 – – – – – – 21,862,329,292.88 21,826,834,288.38
– Feed ingredients trading /H1118/H1118/H1118 –––– 3,023,116,790.04 3,083,201,630.46 – – – – 3,023,116,790.04 3,083,201,630.46
– Others /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118 –––––– 525,366,934.49 498,097,495.13 – – 525,366,934.49 498,097,495.13
Inter-segment elimination /H1118/H1118/H1118 –––––– – – (22,792,975,831.31) (23,062,295,690.24) (22,792,975,831.31) (23,062,295,690.24)
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118108,224,321,673.98 105,060,685,687.09 21,862,329,292.88 21,826,834,288.38 3,023,116,790.04 3,083,201,630.46 525,366,934.49 498,097,495 .13 (22,792,975,831.31) (23,062,295,690.24) 110,842,158,860.08 107,406,523,410.82
By geographical regions
– the PRC /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118108,224,321,673.98 105,060,685,687.09 21,862,329,292.88 21,826,834,288.38 3,023,116,790.04 3,083,201,630.46 525,366,934.49 498,097,495 .13 (22,792,975,831.31) (23,062,295,690.24) 110,842,158,860.08 107,406,523,410.82
By timing of transfer of goods
– Revenue recognised at a point
in time /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118108,224,321,673.98 105,060,685,687.09 21,862,329,292.88 21,826,834,288.38 3,023,116,790.04 3,083,201,630.46 525,366,934.49 498,097,495 .13 (22,792,975,831.31) (23,062,295,690.24) 110,842,158,860.08 107,406,523,410.82
APPENDIX I ACCOUNTANTS’ REPORT
– I-105 –


--- page 584 ---
For the year ended 31 December 2024:
Sales of hog business
Sales of slaughtering and meat
product business Feed ingredients trading Others Inter-segment elimination Total
Income Cost Income Cost Income Cost Income Cost Income Cost Income Cost
By type of business
– Sales of hog business /H1118/H1118/H1118/H1118136,229,329,743.49 110,063,927,873.75 –––– – ––– 136,229,329,743.49 110,063,927,873.75
– Sales of slaughtering and meat
product business /H1118/H1118/H1118/H1118/H1118/H1118 – – 24,273,640,358.59 24,024,581,695.61 – – – – – – 24,273,640,358.59 24,024,581,695.61
– Feed ingredients trading /H1118/H1118/H1118 –––– 1,432,318,994.72 1,458,465,493.31 – – – – 1,432,318,994.72 1,458,465,493.31
– Others /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118 –––––– 428,863,328.79 386,069,983.91 – – 428,863,328.79 386,069,983.91
Inter-segment elimination /H1118/H1118/H1118 –––––– – – (24,435,772,335.76) (24,294,469,886.54) (24,435,772,335.76) (24,294,469,886.54)
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118136,229,329,743.49 110,063,927,873.75 24,273,640,358.59 24,024,581,695.61 1,432,318,994.72 1,458,465,493.31 428,863,328.79 386,069,983 .91 (24,435,772,335.76) (24,294,469,886.54) 137,928,380,089.83 111,638,575,160.04
By geographical regions
– the PRC /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118136,229,329,743.49 110,063,927,873.75 24,273,640,358.59 24,024,581,695.61 1,432,318,994.72 1,458,465,493.31 428,863,328.79 386,069,983 .91 (24,435,772,335.76) (24,294,469,886.54) 137,928,380,089.83 111,638,575,160.04
By timing of transfer of goods
– Revenue recognised at a point
in time /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118136,229,329,743.49 110,063,927,873.75 24,273,640,358.59 24,024,581,695.61 1,432,318,994.72 1,458,465,493.31 428,863,328.79 386,069,983 .91 (24,435,772,335.76) (24,294,469,886.54) 137,928,380,089.83 111,638,575,160.04
For the nine months ended 30 September 2025:
Sales of hog business
Sales of slaughtering and meat
product business Feed ingredients trading Others Inter-segment elimination Total
Income Cost Income Cost Income Cost Income Cost Income Cost Income Cost
By type of business
– Sales of hog business /H1118/H1118/H1118/H1118109,516,048,510.95 89,322,197,744.85 –––– – ––– 109,516,048,510.95 89,322,197,744.85
– Sales of slaughtering and meat
product business /H1118/H1118/H1118/H1118/H1118/H1118 – – 31,812,698,244.61 31,101,095,735.57 – – – – – – 31,812,698,244.61 31,101,095,735.57
– Feed ingredients trading /H1118/H1118/H1118 –––– 2,478,628,937.70 2,474,807,886.27 – – – – 2,478,628,937.70 2,474,807,886.27
– Others /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118 –––––– 677,111,944.64 593,759,380.37 – – 677,111,944.64 593,759,380.37
Inter-segment elimination /H1118/H1118/H1118/H1118 –––––– – – (32,708,591,278.19) (32,654,686,164.50) (32,708,591,278.19) (32,654,686,164.50)
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118109,516,048,510.95 89,322,197,744.85 31,812,698,244.61 31,101,095,735.57 2,478,628,937.70 2,474,807,886.27 677,111,944.64 593,759,380. 37 (32,708,591,278.19) (32,654,686,164.50) 111,775,896,359.71 90,837,174,582.56
APPENDIX I ACCOUNTANTS’ REPORT
– I-106 –


--- page 585 ---
Sales of hog business
Sales of slaughtering and meat
product business Feed ingredients trading Others Inter-segment elimination Total
Income Cost Income Cost Income Cost Income Cost Income Cost Income Cost
By geographical regions
– the PRC /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118109,516,048,510.95 89,322,197,744.85 31,812,698,244.61 31,101,095,735.57 2,478,628,937.70 2,474,807,886.27 677,111,944.64 593,759,380. 37 (32,708,591,278.19) (32,654,686,164.50) 111,775,896,359.71 90,837,174,582.56
By timing of transfer of goods
– Revenue recognised at a point
in time /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118109,516,048,510.95 89,322,197,744.85 31,812,698,244.61 31,101,095,735.57 2,478,628,937.70 2,474,807,886.27 677,111,944.64 593,759,380. 37 (32,708,591,278.19) (32,654,686,164.50) 111,775,896,359.71 90,837,174,582.56
For the nine months ended 30 September 2024 (unaudited) :
Sales of hog business
Sales of slaughtering and meat
product business Feed ingredients trading Others Inter-segment elimination Total
Income Cost Income Cost Income Cost Income Cost Income Cost Income Cost
By type of business
– Sales of hog business /H1118/H1118/H1118/H111895,356,686,209.70 78,508,798,149.57 –––– – ––– 95,356,686,209.70 78,508,798,149.57
– Sales of slaughtering and meat
product business /H1118/H1118/H1118/H1118/H1118/H1118 – – 15,881,047,843.53 15,851,434,363.50 – – – – – – 15,881,047,843.53 15,851,434,363.50
– Feed ingredients trading /H1118/H1118/H1118 –––– 896,193,001.75 919,163,944.27 – – – – 896,193,001.75 919,163,944.27
– Others /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118 –––––– 264,494,643.29 249,816,338.18 – – 264,494,643.29 249,816,338.18
Inter-segment elimination /H1118/H1118/H1118/H1118 –––––– – – (15,632,447,072.86) (15,484,708,302.32) (15,632,447,072.86) (15,484,708,302.32)
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111895,356,686,209.70 78,508,798,149.57 15,881,047,843.53 15,851,434,363.50 896,193,001.75 919,163,944.27 264,494,643.29 249,816,338.18 (15 ,632,447,072.86) (15,484,708,302.32) 96,765,974,625.41 80,044,504,493.20
By geographical regions
– the PRC /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111895,356,686,209.70 78,508,798,149.57 15,881,047,843.53 15,851,434,363.50 896,193,001.75 919,163,944.27 264,494,643.29 249,816,338.18 (15 ,632,447,072.86) (15,484,708,302.32) 96,765,974,625.41 80,044,504,493.20
By timing of transfer of goods
– Revenue recognised at a point
in time /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111895,356,686,209.70 78,508,798,149.57 15,881,047,843.53 15,851,434,363.50 896,193,001.75 919,163,944.27 264,494,643.29 249,816,338.18 (15 ,632,447,072.86) (15,484,708,302.32) 96,765,974,625.41 80,044,504,493.20
APPENDIX I ACCOUNTANTS’ REPORT
– I-107 –


--- page 586 ---
(3) Information related to the transaction price allocated to remaining performance obligations
The Group applies the practical expedient in CASBE No. 14 “Revenue” and does not disclose the transaction
price allocated to the remaining performance obligation under its existing sales contracts as the original expected
duration of substantially all the contracts of the Group are within one year or less.
43 Taxes and surcharges
Y ear ended 31 December Nine months ended 30 September
2022 2023 2024 2024 2025
(unaudited)
Stamp duty /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118105,879,721.20 92,078,135.09 112,592,684.31 83,030,021.87 94,039,710.11
Real estate tax /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111839,238,528.83 51,385,855.24 55,976,739.53 39,768,794.23 57,919,014.09
Land use tax /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111824,479,059.83 28,323,703.91 28,823,729.68 21,029,273.05 21,072,633.80
Local water conservancy
construction fund /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11187,022,007.01 8,859,980.25 16,360,750.76 12,437,670.06 19,033,907.60
Resource tax /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184,827,563.04 4,600,401.93 4,444,943.05 3,061,333.06 7,132,744.86
Others /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,857,156.57 4,315,313.68 4,993,266.45 3,008,172.18 3,448,916.78
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118185,304,036.48 189,563,390.10 223,192,113.78 162,335,264.45 202,646,927.24
44 Selling and distribution expenses
Y ear ended 31 December Nine months ended 30 September
2022 2023 2024 2024 2025
(unaudited)
Employee remuneration /H1118/H1118/H1118/H1118/H1118/H1118428,979,172.03 645,722,525.83 761,632,931.26 548,123,382.22 668,973,868.58
Depreciation expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118110,642,924.78 127,541,264.82 128,170,187.61 95,872,850.36 100,657,078.50
Fuel and energy expenses /H1118/H1118/H1118/H1118/H111891,316,073.93 89,900,820.97 78,105,194.81 58,386,880.98 68,082,067.03
Business development expenses /H1118/H111818,079,877.13 16,962,607.42 19,798,341.67 14,028,792.56 17,770,020.72
V ehicle expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111817,706,596.65 21,059,834.92 20,990,778.74 14,480,577.41 16,273,375.70
Testing fees /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111833,902,482.44 17,685,900.28 17,352,762.68 13,043,423.83 14,994,822.08
Travel expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11186,556,800.70 8,630,712.31 14,262,158.99 8,888,808.87 17,025,434.46
Material consumption cost /H1118/H1118/H1118/H111825,738,869.12 18,711,020.03 9,285,341.84 5,681,513.02 6,835,966.90
Lease expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11187,429,450.58 6,107,201.74 5,538,949.30 3,903,306.55 5,434,201.24
Office expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11186,250,589.23 4,958,265.94 5,391,444.69 3,809,930.53 2,908,694.57
Others /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111812,139,040.63 25,349,351.53 35,152,189.10 22,988,433.81 24,758,064.12
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118758,741,877.22 982,629,505.79 1,095,680,280.69 789,207,900.14 943,713,593.90
APPENDIX I ACCOUNTANTS’ REPORT
– I-108 –


--- page 587 ---
45 General and administrative expenses
Y ear ended 31 December Nine months ended 30 September
2022 2023 2024 2024 2025
(unaudited)
Employee remuneration /H1118/H1118/H1118/H1118/H1118/H11181,315,699,736.20 1,360,712,214.50 1,285,351,224.22 910,166,118.26 1,061,110,009.87
Insurance expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118789,041,833.54 791,041,142.84 658,202,375.98 733,551,828.12 567,977,717.51
Depreciation and amortisation
expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118391,400,090.13 449,608,567.66 485,073,735.67 369,650,955.46 339,065,485.60
Business development expenses /H1118/H1118283,552,276.96 311,671,079.08 278,229,338.05 227,647,535.95 208,822,373.18
Office expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118195,370,940.81 202,949,222.55 159,134,637.72 119,733,736.17 141,655,388.79
Service expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118109,881,092.81 141,637,751.69 143,668,272.52 99,060,863.76 105,182,806.44
V ehicle expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111888,305,132.99 88,130,594.29 80,722,757.25 59,997,897.06 57,722,091.65
Travel expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111822,031,068.20 31,803,184.68 38,560,586.80 25,110,261.33 33,453,239.13
Property management fees /H1118/H1118/H1118/H111820,625,421.69 18,747,097.34 22,113,573.95 16,096,488.10 21,228,471.07
Share-based payment expenses /H1118/H1118850,037,704.02 343,962,903.69 35,645,926.90 35,645,926.90 71,656,569.35
Others /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118135,458,559.97 136,014,775.84 145,015,178.81 91,615,379.71 133,581,162.12
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184,201,403,857.32 3,876,278,534.16 3,331,717,607.87 2,688,276,990.82 2,741,455,314.71
46 Research and development expenses
Y ear ended 31 December Nine months ended 30 September
2022 2023 2024 2024 2025
(unaudited)
Employee remuneration /H1118/H1118842,660,171.17 957,602,449.41 946,099,580.55 720,072,643.73 691,891,679.42
R&D material
consumption expenses /H1118229,807,828.68 542,993,056.51 506,953,236.93 383,566,560.41 322,144,861.59
Service expenses /H1118/H1118/H1118/H1118/H111828,564,872.96 96,925,730.60 183,990,278.05 86,371,822.41 143,980,517.39
Depreciation and
amortisation expenses /H1118 23,681,031.52 24,411,678.39 53,066,600.06 38,876,151.16 48,690,987.74
Testing fee /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184,965,593.02 11,634,627.60 28,451,493.37 18,723,012.84 29,770,346.79
Travel expenses /H1118/H1118/H1118/H1118/H1118/H11183,087,291.77 9,134,896.71 8,532,187.06 5,567,729.57 8,278,021.71
V ehicle expenses /H1118/H1118/H1118/H1118/H11184,432,437.95 5,965,858.67 4,494,122.72 3,274,434.01 3,554,049.96
Others /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185,204,689.08 9,061,338.85 15,630,158.54 11,193,999.42 15,037,230.57
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,142,403,916.15 1,657,729,636.74 1,747,217,657.28 1,267,646,353.55 1,263,347,695.17
During the Track Record Period, the Group had no development costs that meets the capitalisation criteria, and
no important outsourcing projects under research.
APPENDIX I ACCOUNTANTS’ REPORT
– I-109 –


--- page 588 ---
47 Financial expenses
Y ear ended 31 December Nine months ended 30 September
2022 2023 2024 2024 2025
(unaudited)
Interest expenses on loans
and debentures /H1118/H1118/H1118/H1118/H11182,457,707,273.26 2,772,012,442.56 2,727,333,579.91 2,084,596,303.69 1,773,654,853.92
Interest expenses on lease
liabilities and long-term
payables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118432,150,852.33 467,345,187.95 450,134,649.06 345,539,246.75 251,014,320.71
Less: Interest income /H1118/H1118/H1118159,638,278.63 249,835,044.71 237,500,715.55 184,703,009.31 137,319,705.14
Net exchange
losses/(gains) /H1118/H1118/H1118/H1118/H1118/H1118133,018,604.90 30,187,279.83 (11,838,627.13) (1,287,320.39) 22,897,554.86
Others /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111844,477,825.60 34,426,326.36 47,321,024.77 40,992,638.77 40,731,036.81
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,907,716,277.46 3,054,136,191.99 2,975,449,911.06 2,285,137,859.51 1,950,978,061.16
48 Other income
Y ear ended 31 December Nine months ended 30 September
2022 2023 2024 2024 2025
(unaudited)
Grants related to daily
business activities /H1118/H1118/H11182,167,851,654.73 2,776,362,617.05 2,992,721,127.09 2,537,046,306.42 2,012,623,361.95
Refund of charges for
withholding individual
income tax /H1118/H1118/H1118/H1118/H1118/H1118/H111812,372,095.00 16,883,931.77 9,968,028.34 9,935,842.49 9,663,455.11
Other tax reliefs /H1118/H1118/H1118/H1118/H1118/H11188,343,696.62 12,393,003.69 7,707,941.33 5,446,652.84 6,435,659.90
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,188,567,446.35 2,805,639,552.51 3,010,397,096.76 2,552,428,801.75 2,028,722,476.96
49 Investment income/(losses)
Investment income/(losses) by item
Y ear ended 31 December Nine months ended 30 September
2022 2023 2024 2024 2025
(unaudited)
Investment income/
(losses) from long-term
equity investments
accounted for using the
equity method /H1118/H1118/H1118/H1118/H1118/H111846,131,577.04 (21,979,501.36) 72,263,566.47 37,488,147.89 62,351,886.88
Investment income from
financial wealth
management products /H1118/H1118 944,166.66 7,378,563.10 41,075,221.79 14,729,530.07 33,744,106.86
Others /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(183,802.03) 8,212,094.87 (13,700,468.21) (10,046,282.80) (305,672.39)
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111846,891,941.67 (6,388,843.39) 99,638,320.05 42,171,395.16 95,790,321.35
APPENDIX I ACCOUNTANTS’ REPORT
– I-110 –


--- page 589 ---
50 Credit (losses)/reversals
Y ear ended 31 December Nine months ended 30 September
2022 2023 2024 2024 2025
(unaudited)
Accounts receivable /H1118/H1118/H1118/H1118(3,140,011.37) (10,355,914.17) (3,333,470.01) 698,862.91 (12,522,660.11)
Other receivables /H1118/H1118/H1118/H1118/H1118(19,965,904.52) 6,190,103.20 3,617,162.85 8,457,880.04 (509,902.73)
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(23,105,915.89) (4,165,810.97) 283,692.84 9,156,742.95 (13,032,562.84)
51 Impairment losses
Y ear ended 31 December Nine months ended 30 September
2022 2023 2024 2024 2025
(unaudited)
Inventories /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– (202,476,115.94) (12,884,326.14) (12,472,553.87) (2,934,053.12)
52 (Losses)/gains from asset disposals
Y ear ended 31 December Nine months ended 30 September
2022 2023 2024 2024 2025
(unaudited)
(Losses)/gains from
disposal of
non-current assets /H1118/H1118/H1118/H1118(2,241,278.21) (10,125,079.30) 5,845,833.88 7,590,173.16 1,783,198.80
APPENDIX I ACCOUNTANTS’ REPORT
– I-111 –


--- page 590 ---
53 Non-operating income and non-operating expenses
(1) Non-operating income
Y ear ended 31 December Nine months ended 30 September
2022 2023 2024 2024 2025
Amount
Amount
recognised in
extraordinary
gain and loss Amount
Amount
recognised in
extraordinary
gain and loss Amount
Amount
recognised in
extraordinary
gain and loss Amount
Amount
recognised in
extraordinary
gain and loss Amount
Amount
recognised in
extraordinary
gain and loss
(unaudited) (unaudited)
Grants /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118225,184,409.97 225,184,409.97 ––––––––
Gains from disposal of
non-current assets /H1118/H1118/H1118/H11182,908,325.13 2,908,325.13 2,253,694.77 2,253,694.77 3,492,260.19 3,492,260.19 3,482,960.00 3,482,960.00 959,341.53 959,341.53
Others /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118148,817,805.48 148,817,805.48 154,932,995.52 154,932,995.52 80,920,014.79 80,920,014.79 60,817,648.96 60,817,648.96 81,356,842.63 81,356 ,842.63
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118376,910,540.58 376,910,540.58 157,186,690.29 157,186,690.29 84,412,274.98 84,412,274.98 64,300,608.96 64,300,608.96 82,316,184.16 82,316 ,184.16
(2) Non-operating expenses
Y ear ended 31 December Nine months ended 30 September
2022 2023 2024 2024 2025
Amount
Amount
recognised in
extraordinary
gain and loss Amount
Amount
recognised in
extraordinary
gain and loss Amount
Amount
recognised in
extraordinary
gain and loss Amount
Amount
recognised in
extraordinary
gain and loss Amount
Amount
recognised in
extraordinary
gain and loss
(unaudited) (unaudited)
Losses from damage or
scrapping of non-current
assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118206,202,866.78 206,202,866.78 380,211,765.28 380,211,765.28 958,439,622.61 958,439,622.61 735,616,154.44 735,616,154.44 868,740,183.76 8 68,740,183.76
Donations /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111871,801,703.70 71,801,703.70 178,086,662.48 178,086,662.48 195,383,235.73 195,383,235.73 192,553,265.90 192,553,265.90 37,521,286.90 37,5 21,286.90
Others /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111822,568,717.92 22,568,717.92 37,064,914.27 37,064,914.27 44,657,152.69 44,657,152.69 37,391,897.70 37,391,897.70 28,330,380.35 28,330,380 .35
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118300,573,288.40 300,573,288.40 595,363,342.03 595,363,342.03 1,198,480,011.03 1,198,480,011.03 965,561,318.04 965,561,318.04 934,591,851 .01 934,591,851.01
APPENDIX I ACCOUNTANTS’ REPORT
– I-112 –


--- page 591 ---
54 Income tax expenses
Y ear ended 31 December Nine months ended 30 September
Note 2022 2023 2024 2024 2025
(unaudited)
Current tax expense for
the year/period based
on tax law and
regulations /H1118/H1118/H1118/H1118/H1118/H1118 3,335,620.88 1,427,647.38 2,743,436.77 561,514.59 11,005,737.73
Changes in deferred tax
assets/liabilities /H1118/H1118/H1118 (6,704,024.24) (3,647,150.11) (31,309,430.38) (32,878,934.74) (26,656,906.80)
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(1) (3,368,403.36) (2,219,502.73) (28,565,993.61) (32,317,420.15) (15,651,169.07)
(1) Reconciliation between income tax expense and accounting profit/(losses):
Y ear ended 31 December Nine months ended 30 September
2022 2023 2024 2024 2025
(unaudited)
Profit/(loss) before taxation /H111814,930,032,188.22 (4,170,088,485.57) 18,896,478,910.64 11,213,334,238.01 15,096,472,050.73
Expected income tax
expenses at a tax rate of
25% /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,732,508,047.22 (1,042,522,121.58) 4,724,119,727.79 2,803,333,559.50 3,774,118,012.68
Effect of different tax rates
applied by subsidiaries /H1118/H1118 5,767,226.87 10,113,296.83 10,282,869.17 11,949,708.81 6,552,192.84
Effect of non-taxable
income /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(3,774,015,217.25) 995,775,036.65 (4,795,069,549.60) (2,873,403,544.81) (3,820,624,747.60)
Effect of non-deductible
costs, expense and losses /H1118 32,371,539.80 34,414,285.37 32,100,959.03 25,802,856.35 24,303,373.01
Income tax expenses /H1118/H1118/H1118/H1118(3,368,403.36) (2,219,502.73) (28,565,993.61) (32,317,420.15) (15,651,169.07)
55 Basic earnings/(loss) per share and diluted earnings/(loss) per share
(1) Basic earnings/(loss) per share
Basic earnings/(loss) per share is calculated by dividing consolidated net profit/(net loss) attributable to
ordinary shareholders of the Company by the weighted average number of ordinary shares outstanding:
Y ear ended 31 December Nine months ended 30 September
Note 2022 2023 2024 2024 2025
(unaudited)
Consolidated net
profit/(loss) attributable
to ordinary
shareholders of the
Company /H1118/H1118/H1118/H1118/H1118/H1118/H1118(a) 13,081,858,682.32 (4,283,260,152.66) 17,881,260,485.27 10,481,068,452.78 14,740,069,551.67
Weighted average number
of ordinary shares
outstanding /H1118/H1118/H1118/H1118/H1118/H1118(b) 5,261,565,325.70 5,399,412,313.34 5,413,395,331.41 5,412,506,735.34 5,376,682,771.57
Basic earnings/(loss) per
share (RMB/share) /H1118/H1118/H1118 2.49 (0.79) 3.30 1.94 2.74
APPENDIX I ACCOUNTANTS’ REPORT
– I-113 –


--- page 592 ---
(a) Consolidated net profit/(loss) attributable to ordinary shareholders of the Company is calculated as follows:
Y ear ended 31 December Nine months ended 30 September
2022 2023 2024 2024 2025
(unaudited)
Consolidated net profit/(loss)
attributable to shareholders of the
Company /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111813,266,156,512.39 (4,263,280,820.31) 17,881,260,485.27 10,481,068,452.78 14,778,904,957.09
Less: Revocable cash dividends
distributed to holders of
expected future unlocked
restricted shares in this
year/period /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111815,934,590.07 19,979,332.35 – – 38,835,405.42
Preference shares dividends
distributed in the current
year/period /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118168,363,240.00 ––––
Consolidated net profit/(loss)
attributable to ordinary shareholders
of the Company /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111813,081,858,682.32 (4,283,260,152.66) 17,881,260,485.27 10,481,068,452.78 14,740,069,551.67
(b) Weighted average number of ordinary shares of the Company is calculated as follows:
Y ear ended 31 December Nine months ended 30 September
2022 2023 2024 2024 2025
(unaudited)
Issued ordinary shares at the
beginning of the year/period /H1118/H1118/H11185,195,694,347.00 5,402,318,067.00 5,395,736,815.00 5,395,736,815.00 5,396,451,623.00
Effect of private placement of
ordinary shares /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111812,509,382.00 ––––
Effect of ordinary shares repurchased
(Note IV .38) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– (30,649,736.41) (1,207,953.09) – (19,769,717.77)
Effect of restricted shares unlocking
(Note XI) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111853,294,121.70 27,738,845.75 18,864,789.75 16,768,702.00 –
Effect of conversion of convertible
bonds (Note IV .35) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111867,475.00 5,137.00 1,679.75 1,218.34 866.34
Weighted average number of
ordinary shares at the end of the
year/period /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185,261,565,325.70 5,399,412,313.34 5,413,395,331.41 5,412,506,735.34 5,376,682,771.57
(2) Diluted earnings/(loss) per share
As the Group operated at net loss for the year ended 31 December 2023, the diluted potential ordinary shares
were anti-dilutive, thus the diluted loss per share in 2023 was equal to the basic loss per share.
APPENDIX I ACCOUNTANTS’ REPORT
– I-114 –


--- page 593 ---
For the years ended 31 December 2022 and 2024 and the nine months ended 30 September 2024 and 2025,
diluted earnings per share was calculated by dividing consolidated net profit attributable to ordinary shareholders of
the Company (diluted) by the weighted average number of ordinary shares outstanding (diluted):
Y ear ended 31 December Nine months ended 30 September
Note 2022 2024 2024 2025
(unaudited)
Consolidated net profit attributable to
ordinary shareholders of the Company
(diluted) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(a) 13,425,341,831.55 18,231,218,094.95 10,741,305,205.27 15,046,291,571.61
Weighted average number of ordinary
shares outstanding (diluted) /H1118/H1118/H1118/H1118/H1118(b) 5,477,401,122.13 5,618,404,858.80 5,617,521,435.66 5,585,393,213.28
Diluted earnings per share (RMB/share) /H1118 2.45 3.24 1.91 2.69
(a) Consolidated net profit attributable to ordinary shareholders of the Company (diluted) is calculated as follows:
Y ear ended 31 December Nine months ended 30 September
2022 2024 2024 2025
(unaudited)
Consolidated net profit attributable to
ordinary shareholders /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111813,081,858,682.32 17,881,260,485.27 10,481,068,452.78 14,740,069,551.67
Diluted adjustments:
After-tax effect of effective interest on
the liability component of
convertible bonds /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118327,548,559.16 349,957,609.68 260,236,752.49 267,386,614.52
Cash dividends declared in the current
year/period attributable to restricted
shares that are expected to be
unlocked in the future /H1118/H1118/H1118/H1118/H1118/H1118/H111815,934,590.07 – – 38,835,405.42
Consolidated net profit attributable to
ordinary shareholders (diluted) /H1118/H1118/H1118/H111813,425,341,831.55 18,231,218,094.95 10,741,305,205.27 15,046,291,571.61
(b) The weighted average number of the Company’s ordinary shares (diluted) is calculated as follows:
Y ear ended 31 December Nine months ended 30 September
2022 2024 2024 2025
(unaudited)
Weighted average number of ordinary
shares at the end of the year/period /H1118/H1118 5,261,565,325.70 5,413,395,331.41 5,412,506,735.34 5,376,682,771.57
Diluted adjustments:
Effect of convertible bonds (Note
IV .31) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118201,944,755.00 205,009,527.39 205,014,700.32 208,636,552.25
Effect of restricted shares (Note XI) /H1118/H1118 13,891,041.43 – – 73,889.46
Weighted average number of ordinary
shares (diluted)
at the end of the year/period /H1118/H1118/H1118/H1118/H11185,477,401,122.13 5,618,404,858.80 5,617,521,435.66 5,585,393,213.28
APPENDIX I ACCOUNTANTS’ REPORT
– I-115 –


--- page 594 ---
56 Cash flow statement
(1) Cash relating to operating activities
(a) Proceeds from other operating activities:
Y ear ended 31 December Nine months ended 30 September
2022 2023 2024 2024 2025
(unaudited)
Interest income /H1118/H1118/H1118/H1118/H1118/H1118159,638,278.63 249,835,044.71 237,500,715.55 184,703,009.31 137,319,705.14
Sales of scrap materials /H1118/H111837,454,757.09 85,109,293.91 39,275,352.21 43,796,368.35 32,446,798.12
Grants /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118669,564,097.64 681,363,129.01 753,979,980.54 616,329,514.50 312,170,780.47
Insurance compensation /H1118/H11181,735,237,722.07 2,116,343,498.05 2,364,204,065.22 1,771,381,261.38 1,750,398,422.63
Deposits
– Deposits received from
customers and suppliers 1,129,874,609.64 790,896,606.43 401,497,832.48 294,824,042.20 287,574,520.52
– Deposits related to bills
and letter of credit
deposits, etc. /H1118/H1118/H1118/H1118/H1118/H1118342,344,913.51 1,767,392,692.06 3,388,647,591.24 4,384,669,433.56 2,046,248,126.78
Others /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118161,159,823.23 153,817,871.35 154,096,185.86 142,137,915.40 169,467,138.95
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184,235,274,201.81 5,844,758,135.52 7,339,201,723.10 7,437,841,544.70 4,735,625,492.61
(b) Payments for other operating activities:
Y ear ended 31 December Nine months ended 30 September
2022 2023 2024 2024 2025
(unaudited)
Payment of selling and
distribution expenses /H1118/H1118215,189,657.70 205,328,768.28 203,243,045.54 142,332,832.58 171,928,620.86
Payment of general and
administrative
expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,345,208,951.20 1,497,235,940.34 1,517,104,629.24 1,124,457,929.03 1,266,496,286.48
Payment of R&D
expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118254,027,910.66 393,016,885.90 743,429,740.15 483,249,629.06 520,898,958.62
Deposits
– Deposits paid to
customers and
suppliers /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118722,469,471.84 358,543,418.52 287,843,302.95 208,331,174.03 263,223,896.04
– Deposits related to bills
and letter of credit
deposits, etc. /H1118/H1118/H1118/H1118/H1118/H1118292,261,185.30 4,464,759,477.71 970,130,833.76 2,250,639,381.74 549,651,325.23
Donations /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111871,801,703.70 178,083,964.66 195,383,235.73 192,553,265.90 37,521,286.90
Others /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118122,914,833.54 262,225,213.28 188,134,088.12 101,512,330.66 111,839,240.91
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,023,873,713.94 7,359,193,668.69 4,105,268,875.49 4,503,076,543.00 2,921,559,615.04
APPENDIX I ACCOUNTANTS’ REPORT
– I-116 –


--- page 595 ---
(2) Cash relating to financing activities
(a) Proceeds from other financing activities:
Y ear ended 31 December Nine months ended 30 September
2022 2023 2024 2024 2025
(unaudited)
Recovery of loan
deposits /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 84,454,825.91 2,467,653.89 1,300,620.89 4,180,000.00
Disposal of interests in a
subsidiary /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 166,700.0 0–––
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 84,621,525.91 2,467,653.89 1,300,620.89 4,180,000.00
(b) Payments for other financing activities:
Y ear ended 31 December Nine months ended 30 September
2022 2023 2024 2024 2025
(unaudited)
Financing charges paid /H1118/H1118/H1118143,674,770.50 139,689,503.62 199,234,774.39 156,051,679.65 108,021,039.64
Payment of loan deposits /H1118/H111847,220,861.39 5,647,653.89 224,040.60 127,454.98 –
Payment of leases /H1118/H1118/H1118/H1118/H11181,307,244,700.06 1,302,748,697.62 789,688,666.85 589,819,297.02 573,843,327.48
Payment of restricted shares
repurchase /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118127,567,874.69 105,542,769.49 29,140,052.91 27,069,945.49 –
Payment for consideration
of the purchase of non-
controlling interest /H1118/H1118/H1118/H11181,337,395,576.42 4,936,668,839.09 10,507,402,560.60 5,263,952,560.60 2,000,000,000.00
Payment for repurchase of
ordinary shares /H1118/H1118/H1118/H1118/H1118/H1118 – 1,999,993,232.40 1,000,001,904.21 – 2,001,488,652.73
Payment for repurchase of
preference shares /H1118/H1118/H1118/H11182,475,930,000.0 0––––
Prepayments for costs
incurred in connection
with the proposed initial
offering of H Shares of
the Company /H1118/H1118/H1118/H1118/H1118/H1118 –––– 35,448,577.42
Others /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118109,830.2 2––––
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185,439,143,613.28 8,490,290,696.11 12,525,691,999.56 6,037,020,937.74 4,718,801,597.27
APPENDIX I ACCOUNTANTS’ REPORT
– I-117 –


--- page 596 ---
(c) Changes in liabilities arising from financing activities
Y ear ended 31 December 2022
As at
1 January
Additions Decreases
As at
31 DecemberCash Non-cash Cash Non-cash
Short-term loans /H1118/H1118/H1118/H111822,291,617,876.55 45,152,363,865.03 979,513,081.73 (39,258,055,143.32) – 29,165,439,679.99
Other payables —
Borrowings and
interest /H1118/H1118/H1118/H1118/H1118/H1118/H11185,056,205,694.46 14,948,000,000.00 204,403,488.89 (19,208,609,183.35) – 1,000,000,000.00
Other current liabilities
— Short-term sale and
leaseback finance
lease payables /H1118/H1118/H1118/H1118 – 72,000,000.00 590,000.00 (590,000.00) – 72,000,000.00
Long-term loans
(Including the part
due within one year) /H111818,449,735,878.92 3,254,345,947.65 785,320,778.96 (5,813,900,886.17) – 16,675,501,719.36
Debentures payable
(Including the part
due within one year) /H111810,306,518,616.70 – 351,979,846.97 (1,449,190,567.13) (6,090,900.00) 9,203,216,996.54
Long-term payables
(Including the part
due within one year) /H1118 1,005,957,860.76 3,150,599,400.00 94,563,027.77 (1,000,061,623.27) – 3,251,058,665.26
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111857,110,035,927.39 66,577,309,212.68 2,416,370,224.32 (66,730,407,403.24) (6,090,900.00) 59,367,217,061.15
Y ear ended 31 December 2023
As at
1 January
Additions Decreases
As at
31 DecemberCash Non-cash Cash Non-cash
Short-term loans /H1118/H1118/H1118/H111829,165,439,679.99 57,559,957,235.74 1,663,840,623.45 (41,460,213,454.47) – 46,929,024,084.71
Other payables —
Borrowings and
interest /H1118/H1118/H1118/H1118/H1118/H1118/H11181,000,000,000.00 5,900,000,000.00 69,650,000.01 (5,069,650,000.01) – 1,900,000,000.00
Other current liabilities
— Short-term sale and
leaseback finance
lease payables /H1118/H1118/H1118/H111872,000,000.00 – 3,548,850.01 (75,548,850.01) – –
Long-term loans
(Including the part
due within one year) /H111816,675,501,719.36 5,214,099,704.24 799,550,789.80 (7,325,908,257.63) – 15,363,243,955.77
Debentures payable
(Including the part
due within one year) /H1118 9,203,216,996.54 – 342,579,614.62 (309,874,418.40) (334,268.26) 9,235,587,924.50
Long-term payables
(Including the part
due within one year) /H1118 3,251,058,665.26 2,975,301,200.00 206,063,002.75 (1,823,298,216.02) – 4,609,124,651.99
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111859,367,217,061.15 71,649,358,139.98 3,085,232,880.64 (56,064,493,196.54) (334,268.26) 78,036,980,616.97
APPENDIX I ACCOUNTANTS’ REPORT
– I-118 –


--- page 597 ---
Y ear ended 31 December 2024
As at
1 January
Additions Decreases
As at
31 DecemberCash Non-cash Cash Non-cash
Short-term loans /H1118/H1118/H1118/H111846,929,024,084.71 55,648,696,006.85 1,699,960,066.93 (59,020,011,033.40) – 45,257,669,125.09
Other payables —
Borrowings and
interest /H1118/H1118/H1118/H1118/H1118/H1118/H11181,900,000,000.00 4,470,000,000.00 35,403,416.66 (6,405,403,416.66) – –
Other current liabilities
— Short-term
debentures payable /H1118/H1118 – 1,000,000,000.00 5,288,516.92 (1,719,339.62) – 1,003,569,177.30
Long-term loans
(Including the part
due within one year) /H111815,363,243,955.77 5,420,000,000.00 730,941,853.05 (7,208,319,986.55) – 14,305,865,822.27
Debentures payable
(Including the part
due within one year) /H1118 9,235,587,924.50 – 349,957,609.68 (76,347,552.00) (356,952.66) 9,508,841,029.52
Long-term payables
(Including the part
due within one year) /H1118 4,609,124,651.99 1,600,191,117.86 211,942,712.99 (3,661,858,770.14) – 2,759,399,712.70
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111878,036,980,616.97 68,138,887,124.71 3,033,494,176.23 (76,373,660,098.37) (356,952.66) 72,835,344,866.88
Nine months ended 30 September 2025
As at 1 January
Additions Decreases
As at 30 SeptemberCash Non-cash Cash Non-cash
Short-term loans /H1118/H1118/H1118/H111845,257,669,125.09 35,639,002,243.56 1,012,791,600.74 (42,149,200,111.37) – 39,760,262,858.02
Other payables —
Borrowings and
interest /H1118/H1118/H1118/H1118/H1118/H1118/H1118 – 855,990,650.00 2,516,850.29 (858,507,500.29) – –
Other current liabilities
— Short-term
debentures payable /H1118/H11181,003,569,177.30 299,550,000.00 15,833,219.98 (1,017,013,698.63) – 301,938,698.65
Long-term loans
(Including the part
due within one year) /H111814,305,865,822.27 6,124,045,650.04 402,437,004.43 (8,373,271,973.03) – 12,459,076,503.71
Debentures payable
(Including the part
due within one year) /H1118 9,508,841,029.52 1,992,500,000.00 296,011,614.47 (114,522,713.45) (153,353.92) 11,682,676,576.62
Long-term payables
(Including the part
due within one year) /H1118 2,759,399,712.70 979,118,425.66 96,998,647.19 (2,080,203,826.91) – 1,755,312,958.64
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111872,835,344,866.88 45,890,206,969.26 1,826,588,937.10 (54,592,719,823.68) (153,353.92) 65,959,267,595.64
APPENDIX I ACCOUNTANTS’ REPORT
– I-119 –


--- page 598 ---
Nine months ended 30 September 2024 (unaudited)
As at 1 January
Additions Decreases
As at 30 SeptemberCash Non-cash Cash Non-cash
Short-term loans /H1118/H1118/H1118/H111846,929,024,084.71 42,174,841,195.39 1,153,434,690.10 (48,387,859,635.81) – 41,869,440,334.39
Other payables —
Borrowings and
interest /H1118/H1118/H1118/H1118/H1118/H1118/H11181,900,000,000.00 4,470,000,000.00 29,401,472.22 (5,779,401,472.22) – 620,000,000.00
Other current liabilities
— Short-term
debentures payable /H1118/H1118 – 499,050,000.00 1,737,194.32 – – 500,787,194.32
Long-term loans
(Including the part
due within one year) /H111815,363,243,955.77 5,330,000,000.00 564,896,167.99 (4,473,995,575.39) – 16,784,144,548.37
Debentures payable
(Including the part
due within one year) /H1118 9,235,587,924.50 – 260,236,752.49 (76,347,552.00) (117,992.72) 9,419,359,132.27
Long-term payables
(Including the part
due within one year) /H1118 4,609,124,651.99 1,328,326,574.99 158,311,645.28 (2,404,508,066.93) – 3,691,254,805.33
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111878,036,980,616.97 53,802,217,770.38 2,168,017,922.40 (61,122,112,302.35) (117,992.72) 72,884,986,014.68
57 Supplementary information for the cash flow statement
(1) Supplement to the cash flow statement
(a) Reconciliation of net profit/(loss) to net cash inflows from operating activities:
Y ear ended 31 December Nine months ended 30 September
2022 2023 2024 2024 2025
(unaudited)
Net profit/(loss) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111814,933,400,591.58 (4,167,868,982.84) 18,925,044,904.25 11,245,651,658.16 15,112,123,219.80
Add: Impairment losses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118 – 202,476,115.94 12,884,326.14 12,472,553.87 2,934,053.12
Credit losses/(reversals) /H1118/H1118/H1118/H1118/H111823,105,915.89 4,165,810.97 (283,692.84) (9,156,742.95) 13,032,562.84
Depreciation of fixed assets and
productive biological assets /H1118/H111811,183,526,434.25 12,649,134,947.41 14,261,282,654.57 10,571,512,454.32 10,856,224,748.97
Depreciation of investment
properties /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11186,895,188.77 6,734,472.49 6,004,800.06 4,503,600.04 4,503,600.04
Depreciation of right-of-use assets /H1118 916,028,105.22 845,798,731.31 800,310,650.91 597,558,750.55 614,200,262.02
Amortisation of intangible assets /H1118 24,081,493.87 26,237,003.95 29,772,853.80 22,148,885.45 23,300,095.42
Amortisation of long-term deferred
expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,204,161.06 6,861,102.07 11,464,610.83 8,613,170.77 8,140,049.87
Losses/(gains) from disposal of
fixed assets, intangible assets,
and other long-term assets /H1118/H1118/H1118 2,241,278.21 10,125,079.30 (5,845,833.88) (7,590,173.16) (1,783,198.80)
APPENDIX I ACCOUNTANTS’ REPORT
– I-120 –


--- page 599 ---
Y ear ended 31 December Nine months ended 30 September
2022 2023 2024 2024 2025
(unaudited)
Losses from scrapping of fixed
assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118204,165,258.99 378,871,734.51 954,948,137.44 732,133,969.46 867,780,842.23
(Gains)/losses from changes in fair
value /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – (158,000.00) 1,435,440.00 (6,027,084.65)
Financial expenses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,131,047,461.14 3,370,265,924.57 3,289,648,217.34 2,512,502,838.93 2,109,223,873.58
Investment (income)/losses /H1118/H1118/H1118/H1118(46,891,941.67) 6,388,843.39 (99,638,320.05) (42,171,395.16) (95,790,321.35)
Increase in deferred tax assets /H1118/H1118/H1118(6,704,024.24) (3,647,150.11) (31,309,430.38) (32,877,704.32) (26,656,906.80)
(Increase)/decrease in inventories /H1118 (3,775,986,495.75) (3,881,569,930.51) (51,909,863.62) 1,966,450,079.53 5,446,615,078.48
(Increase)/decrease in operating
receivables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(702,025,381.20) (1,312,272,142.85) 2,415,660,251.26 2,532,059,870.89 1,056,924,097.09
(Decrease)/increase in operating
payables /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(3,728,341,606.52) 1,402,176,006.33 (3,032,570,565.57) (998,694,622.55) (7,447,516,362.19)
Others /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118844,804,362.33 348,939,297.79 57,760,514.23 61,321,317.99 42,314,237.80
Net cash inflow from operating activities /H111823,010,550,801.93 9,892,816,863.72 37,543,066,214.49 29,177,873,951.82 28,579,542,847.47
(b) Change in cash and cash equivalents:
Y ear ended 31 December Nine months ended 30 September
2022 2023 2024 2024 2025
(unaudited)
Cash and cash equivalents
as at 31 December/
30 September /H1118/H1118/H1118/H1118/H1118/H1118/H111817,910,289,723.66 13,776,392,900.89 12,844,551,613.08 15,745,131,519.77 17,268,736,105.83
Less: Cash and cash
equivalents as at
1 January /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11188,407,255,637.63 17,910,289,723.66 13,776,392,900.89 13,776,392,900.89 12,844,551,613.08
Net increase/(decrease) in
cash and cash
equivalents /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11189,503,034,086.03 (4,133,896,822.77) (931,841,287.81) 1,968,738,618.88 4,424,184,492.75
(2) Details of cash and cash equivalents
As at 31 December As at 30 September
2022 2023 2024 2025
Cash at bank and on hand
Including:
Cash on hand /H1118/H1118/H1118/H1118/H1118/H1118/H111819,376.00 – – –
Bank deposits available
on demand /H1118/H1118/H1118/H1118/H1118/H1118/H111817,834,103,269.92 13,664,785,725.69 12,669,472,733.01 16,875,848,359.74
Other monetary funds
available on demand /H1118 76,167,077.74 111,607,175.20 175,078,880.07 392,887,746.09
Closing balance of cash
and cash equivalents /H1118/H111817,910,289,723.66 13,776,392,900.89 12,844,551,613.08 17,268,736,105.83
APPENDIX I ACCOUNTANTS’ REPORT
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(3) Monetary assets other than cash and cash equivalents
As at 31 December As at 30 September
Reasons not
belonging to cash
and cash
equivalents2022 2023 2024 2025
Bank deposits /H1118/H1118/H1118/H1118/H1118/H11188,747,388.69 14,353,314.59 7,835,642.76 45,607,777.97 Unable to use on
demand
Other monetary funds /H1118/H11182,874,511,472.30 5,638,360,047.53 4,099,255,599.16 1,720,870,160.61 Unable to use on
demand
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,883,258,860.99 5,652,713,362.12 4,107,091,241.92 1,766,477,938.58
(4) Information on supplier finance arrangements:
During the Track Record Period, the Group’s certain suppliers has entered into factoring arrangements with
banks and other financial institutions. According to these factoring arrangements, the Group’s suppliers transferred
the receivables due from the Group to banks and other financial institutions before the original due dates of these
trade payables, and the Group settled these trade payables with banks and other financial institutions upon the due
date of these factoring arrangements. During the Track Record Period, the range of payment due dates of the trade
payables of the Group is 0-180 days after invoice date. As at 31 December 2022, 2023 and 2024 and 30 September
2025, the ranges of payment due dates of these factoring arrangements of the Group are 43 to 365 days, 49 to 541
days, 27 to 388 days and 77 to 398 days, respectively, after the factoring arrangements commenced.
As at 31 December 2022, 2023 and 2024 and 30 September 2025, the receivables due from the Group that
certain suppliers transferred to banks and other financial institutions amounted to RMB4,578,859,381.75,
RMB7,518,139,495.19, RMB7,410,372,506.25 and RMB4,458,318,905.80, respectively, among which
RMB1,674,630,899.67, RMB3,054,846,603.19, RMB3,363,292,198.74 and RMB1,626,782,577.26, respectively,
were guaranteed by the Company, Mr. Qin Yinglin, Ms. Qian Ying and Muyuan Industrial Group Co., Ltd. (“Muyuan
Group”).
58 Foreign currency monetary items
As at 31 December 2022
Foreign currency
balance
Conversion exchange
rate
Balance converted into
RMB
Cash at bank and on hand
– USD /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118138,726.31 6.9646 966,173.26
– Euro /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111845,612,782.60 7.4229 338,579,123.96
Bills payable
–USD /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(12,286,816.52) 6.9646 (85,572,762.34)
– Euro /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(94,919.40) 7.4229 (704,577.21)
Long-term loans
–USD /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(170,019,446.26) 6.9646 (1,184,117,435.43)
– Euro /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(45,631,787.93) 7.4229 (338,720,198.62)
APPENDIX I ACCOUNTANTS’ REPORT
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--- page 601 ---
As at 31 December 2023
Foreign currency
balance
Conversion exchange
rate
Balance converted into
RMB
Cash at bank and on hand
– USD /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111876,323.82 7.0827 540,578.72
– Euro /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111840,593.12 7.8592 319,029.41
Accounts payable
– USD /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(25,779.70) 7.0827 (182,589.88)
– Euro /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–––
Long-term loans
– USD /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–––
– Euro /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(41,539,508.15) 7.8592 (326,467,302.45)
As at 31 December 2024
Foreign currency
balance
Conversion exchange
rate
Balance converted into
RMB
Cash at bank and on hand
– USD /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,197,048.74 7.1884 8,604,865.17
– Euro /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11186,078.02 7.5257 45,741.36
Accounts payable
– USD /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–––
–Euro /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–––
Long-term loans
– USD /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–––
– Euro /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(34,024,966.02) 7.5257 (256,061,686.77)
As at 30 September 2025
Foreign currency
balance
Conversion exchange
rate
Balance converted into
RMB
Cash at bank and on hand /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
– USD /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,178,594.43 7.1055 8,374,502.72
– Singapore Dollar (“SGD”) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,297.81 5.5131 18,181.16
– Vietnamese Dong (“VND”) /H1118/H1118/H1118/H1118/H1118/H1118/H1118189,425,759.00 0.0003 53,438.85
59 Leases
(1) As a lessee
Y ear ended 31 December Nine months ended 30 September
2022 2023 2024 2024 2025
(unaudited)
Short-term lease expenses
and expenses relating to
leases of low-value
assets for which the
practical expedient has
been applied /H1118/H1118/H1118/H1118/H1118/H111895,014,992.12 80,737,331.56 85,680,669.01 56,453,974.35 74,637,511.92
Total cash outflow for
leases /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,391,339,040.22 1,377,545,541.87 879,645,581.29 616,920,919.30 605,758,991.89
The Group also leases land, buildings, machinery and equipment with lease terms within 1 year (inclusive).
These leases are short-term leases. The Group has elected not to recognise right-of-use assets and lease liabilities for
these leases.
APPENDIX I ACCOUNTANTS’ REPORT
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--- page 602 ---
(2) As a lessor
Operating lease
Y ear ended 31 December Nine months ended 30 September
2022 2023 2024 2024 2025
(unaudited)
Lease income /H1118/H1118/H1118/H1118/H1118/H1118/H11189,655,194.87 18,568,854.32 18,511,987.04 9,150,940.90 14,108,519.01
V . CHANGE OF CONSOLIDATION SCOPE
1 Other reasons for change of consolidation scope
For the year ended 31 December 2022, the Group has newly established 13 subsidiaries, including Hebei
Liangda Grain Trade Co., Ltd., Jiangsu Shanghe Grain Trade Co., Ltd., Shaanxi Hongchi Trade Co., Ltd., Ningjin
Muyuan Meat Co., Ltd., Henan Muyuan Ecology Environment Technology Co., Ltd., Neihuang Muyuan Meat Co.,
Ltd., Liaoning Jinrang Agricultural Products Trade Co., Ltd., Henan Bingqing Agricultural Products Trade Co., Ltd.,
Henan Wuzhoutong Agricultural Products Trading Co., Ltd., Sheqi Muyuan Meat Co., Ltd., Changyuan Muyuan
Livestock Husbandry Co., Ltd., Henan Muyuan New Energy Industry Development Co., Ltd., and Henan Muyuan
Synthetic Biotechnology Co., Ltd.
For the year ended 31 December 2023, the Group has newly established 21 subsidiaries, including Shanxi
Cang’an Trading Co., Ltd., Hebi Muyuan Livestock Husbandry Co., Ltd., Henan Wanxing Synthetic Biotechnology
Co., Ltd., Henan Muyuan Anliang Synthetic Biotechnology Co., Ltd., Huaxian Muyuan New Energy Co., Ltd.,
Nanyang Wolong Muyuan New Energy Co., Ltd., Hap Grain International Agricultural Trading Pte. Ltd., Fanshi
Muyuan Meat Co., Ltd., Zhengyang Muyuan New Energy Co., Ltd., Shangcai Muyuan New Energy Co., Ltd., Xinye
Muyuan New Energy Co., Ltd., Xixia Muyuan New Energy Co., Ltd., Zhenping Muyuan New Energy Co., Ltd.,
Fangcheng Muyuan New Energy Co., Ltd., Nanzhao Muyuan New Energy Co., Ltd., Xichuan Muyuan New Energy
Co., Ltd., Dengzhou Muyuan New Energy Co., Ltd., Tanghe Muyuan New Energy Co., Ltd., Tongbai Muyuan New
Energy Co., Ltd., Sheqi Muyuan New Energy Co., Ltd. and Neixiang Muyuan New Energy Co., Ltd. One subsidiary
was de-registered: Hubei Muxin Detection Technology Co., Ltd.
For the year ended 31 December 2024, the Group has newly established 9 subsidiaries, including Nanyang
Muyuan New Energy Co., Ltd., Anhui Muyuan New Energy Co., Ltd., Shanxi Muyuan New Energy Co., Ltd., Hubei
Muyuan New Energy Co., Ltd., Guangxi Muyuan Solar Power Generation Co., Ltd., Zhengzhou Modern Livestock
Husbandry Co., Ltd., Liaoning Fuxin Y uenong Feed Co., Ltd., Zhuozhou Muyuan Livestock Husbandry Co., Ltd.,
Neixiang Muyuan Hechuang Biotechnology Co., Ltd. 5 subsidiaries were de-registered: Nanyang Muyuan Poor Area
Livestock Husbandry Development Co., Ltd., Nanyang Muyuan Merchants Industry Development Co., Ltd., Qiqihar
Muchen Animal Husbandry Industry Development Co., Ltd., Nanyang Muyuan Swine Supply Support Co., Ltd., and
Nanyang Musheng Hog Industry Development Co., Ltd.
For the nine months ended 30 September 2025, the Group has newly established 10 subsidiaries, including
Nanyang Wolong Y uenong Feed Co., Ltd., Shanxi Chengrui Trading Co., Ltd., Muyuan Vietnam Company Limited,
Gansu Muyuan Topec Hog Breeding Co., Ltd., Guannan Fumu Meat Co., Ltd., Heishan Y uenong Feed Co., Ltd.,
Zhongmu Muguang New Energy Co., Ltd., Nanyang Wolong Muyuan Meat Co., Ltd., Suzhou Muyuan Meat Co., Ltd.,
and Inner Mongolia Zhalaite Y uenong Feed Co., Ltd. 2 subsidiaries were de-registered: Shandong Muhua Animal
Husbandry Industry Development Co., Ltd. and Huaibei Muhua Animal Husbandry Industry Development Co., Ltd.
APPENDIX I ACCOUNTANTS’ REPORT
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--- page 603 ---
VI. INTERESTS IN OTHER ENTITIES
1 Interests in subsidiaries
(1) Composition of the Group
The following list contains only the particulars of subsidiaries which principally affected the results, assets or liabilities of the Group during t he Track Record Period.
Name of subsidiaries
Principal place of business/
Registered place Nature of business Registered capital
Effective interest held by the Group
Acquisition
method
As at 31 December
As at
30 September As at the
date of this
report2022 2023 2024 2025
Nanyang Wolong Muyuan
Breeding Co., Ltd.
ʮ̡ (i)(ii) /H1118/H1118
Nanyang City, Henan
Province
Livestock and poultry
breeding
810,000,000.00 100.00% 100.00% 100.00% 100.00% 100.00% Establishment
Dengzhou Muyuan Breeding
Co., Ltd.
ʮ̡ (i)(ii) /H1118/H1118/H1118/H1118/H1118
Dengzhou City, Henan
Province
Livestock and poultry
breeding
268,000,000.00 93.09% 93.09% 93.09% 93.09% 93.09% Establishment
Hubei Zhongxiang Muyuan Breeding
Co., Ltd.
ʮ̡ (i)(ii) /H1118/H1118/H1118/H1118
Zhongxiang City, Hubei
Province
Livestock and poultry
breeding
250,000,000.00 100.00% 100.00% 100.00% 100.00% 100.00% Establishment
Tanghe Muyuan Livestock Husbandry
Co., Ltd.
ʮ̡ (i)(ii) /H1118/H1118/H1118/H1118/H1118/H1118
Tanghe County, Henan
Province
Livestock and poultry
breeding
750,000,000.00 100.00% 100.00% 100.00% 100.00% 100.00% Establishment
Fugou Muyuan Livestock Husbandry
Co., Ltd.
ʮ̡ (i)(ii) /H1118/H1118/H1118/H1118/H1118/H1118
Zhoukou City, Henan
Province
Livestock and poultry
breeding
660,000,000.00 100.00% 100.00% 100.00% 100.00% 100.00% Establishment
Huaxian Muyuan Livestock Husbandry
Co., Ltd.
ʮ̡ (i)(ii) /H1118/H1118/H1118/H1118/H1118/H1118
Hua County, Henan
Province
Livestock and poultry
breeding
870,000,000.00 100.00% 100.00% 100.00% 100.00% 100.00% Establishment
Qixian Muyuan Livestock Husbandry
Co., Ltd.
ʮ̡ (i)(ii) /H1118/H1118/H1118/H1118/H1118/H1118
Qi County, Henan
Province
Livestock and poultry
breeding
730,000,000.00 100.00% 100.00% 100.00% 100.00% 100.00% Establishment
Zhengyang Muyuan Livestock Husbandry
Co., Ltd.
ʮ̡ (i)(ii) /H1118/H1118/H1118/H1118/H1118/H1118
Zhengyang County,
Henan Province
Livestock and poultry
breeding
250,000,000.00 100.00% 100.00% 100.00% 100.00% 100.00% Establishment
APPENDIX I ACCOUNTANTS’ REPORT
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--- page 604 ---
Name of subsidiaries
Principal place of business/
Registered place Nature of business Registered capital
Effective interest held by the Group
Acquisition
method
As at 31 December
As at
30 September As at the
date of this
report2022 2023 2024 2025
Sheqi Muyuan Livestock
Husbandry Co., Ltd.
ʮ̡ (i)(ii) /H1118/H1118/H1118/H1118/H1118/H1118
Sheqi County, Henan
Province
Livestock and poultry
breeding
1,395,266,700.00 56.62% 56.62% 56.62% 100.00% 100.00% Establishment
Shangshui Muyuan Livestock Husbandry
Co., Ltd.
ʮ̡ (i)(ii) /H1118/H1118/H1118/H1118/H1118/H1118
Shangshui County, Henan
Province
Livestock and poultry
breeding
410,000,000.00 100.00% 100.00% 100.00% 100.00% 100.00% Establishment
Taikang Muyuan Livestock Husbandry
Co., Ltd.
ʮ̡ (i)(ii) /H1118/H1118/H1118/H1118/H1118/H1118
Taikang County, Henan
Province
Livestock and poultry
breeding
400,000,000.00 100.00% 100.00% 100.00% 100.00% 100.00% Establishment
Inner Mongolia Kailu Muyuan Livestock
Husbandry Co., Ltd.
ʮ̡ (i)(ii) /H1118/H1118
Kailu County, Inner
Mongolia
Livestock and poultry
breeding
1,200,000,000.00 100.00% 100.00% 100.00% 100.00% 100.00% Establishment
Liaoning Tieling Muyuan Livestock
Husbandry Co., Ltd.
ʮ̡ (i)(ii) /H1118/H1118/H1118/H1118
Tieling City, Liaoning
Province
Livestock and poultry
breeding
1,202,770,000.00 100.00% 100.00% 100.00% 100.00% 100.00% Establishment
Laohekou Muyuan Livestock Husbandry
Co., Ltd.
ʮ̡ (i)(ii) /H1118/H1118/H1118/H1118/H1118
Laohekou City, Hubei
Province
Livestock and poultry
breeding
200,000,000.00 100.00% 100.00% 100.00% 100.00% 100.00% Establishment
Anhui Yingshang Muyuan Livestock
Husbandry Co., Ltd.
ʮ̡ (i)(ii) /H1118/H1118/H1118/H1118
Yingshang County, Anhui
Province
Livestock and poultry
breeding
229,000,000.00 55.67% 55.67% 100.00% 100.00% 100.00% Establishment
Ningling Muyuan Livestock Husbandry
Co., Ltd.
ʮ̡ (i)(ii) /H1118/H1118/H1118/H1118/H1118/H1118
Ningling County, Henan
Province
Livestock and poultry
breeding
846,818,800.00 100.00% 100.00% 61.41% 61.41% 61.41% Establishment
Mengcheng Muyuan Livestock Husbandry
Co., Ltd.
ʮ̡ (i)(ii) /H1118/H1118/H1118/H1118/H1118/H1118
Mengcheng County,
Anhui Province
Livestock and poultry
breeding
452,000,000.00 72.97% 100.00% 100.00% 100.00% 100.00% Establishment
Xiping Muyuan Livestock Husbandry
Co., Ltd.
ʮ̡ (i)(ii) /H1118/H1118/H1118/H1118/H1118/H1118
Xiping County, Henan
Province
Livestock and poultry
breeding
310,000,000.00 100.00% 100.00% 100.00% 100.00% 100.00% Establishment
APPENDIX I ACCOUNTANTS’ REPORT
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--- page 605 ---
Name of subsidiaries
Principal place of business/
Registered place Nature of business Registered capital
Effective interest held by the Group
Acquisition
method
As at 31 December
As at
30 September As at the
date of this
report2022 2023 2024 2025
Anhui Fengtai Muyuan Livestock
Husbandry Co., Ltd.
ʮ̡ (i)(ii) /H1118/H1118/H1118/H1118
Fengtai County, Anhui
Province
Livestock and poultry
breeding
560,000,000.00 68.68% 68.68% 68.68% 68.68% 68.68% Establishment
Shandong Dongming Muyuan Livestock
Husbandry Co., Ltd.
ʮ̡ (i)(ii) /H1118/H1118/H1118/H1118
Dongming County,
Shandong Province
Livestock and poultry
breeding
900,000,000.00 67.68% 100.00% 100.00% 100.00% 100.00% Establishment
Shangcai Muyuan Livestock Husbandry
Co., Ltd.
ʮ̡ (i)(ii) /H1118/H1118/H1118/H1118/H1118/H1118
Shangcai County, Henan
Province
Livestock and poultry
breeding
620,000,000.00 73.56% 100.00% 100.00% 100.00% 100.00% Establishment
Anhui Suixi Muyuan Livestock
Husbandry Co., Ltd.
ʮ̡ (i)(ii) /H1118/H1118/H1118/H1118
Suixi County, Anhui
Province
Livestock and poultry
breeding
500,000,000.00 100.00% 100.00% 100.00% 100.00% 100.00% Establishment
Luyi Muyuan Livestock Husbandry
Co., Ltd.
ʮ̡ (i)(ii) /H1118/H1118/H1118/H1118/H1118/H1118
Luyi County, Henan
Province
Livestock and poultry
breeding
364,000,000.00 63.38% 63.38% 100.00% 100.00% 100.00% Establishment
Henan Muyuan Grain Trade
Co., Ltd.
ʮ̡ (i)(ii) /H1118/H1118/H1118/H1118
Neixiang County, Henan
Province
Grain purchase and
trade
2,300,000,000.00 100.00% 100.00% 100.00% 100.00% 100.00% Establishment
Muyuan Meat Co., Ltd.
ʮ̡ (i)(ii) /H1118/H1118/H1118/H1118/H1118/H1118/H1118
Nanyang City, Henan
Province
Slaughter processing 3,000,000,000.00 100.00% 100.00% 100.00% 100.00% 100.00% Establishment
Zhengyang Muyuan Meat Co., Ltd.
ʮ̡ (i)(ii) /H1118/H1118/H1118/H1118/H1118
Zhengyang County,
Henan Province
Slaughter processing 500,000,000.00 100.00% 100.00% 100.00% 100.00% 100.00% Establishment
Shangshui Muyuan Meat Co., Ltd.
ʮ̡ (i)(ii) /H1118/H1118/H1118/H1118
Shangshui County, Henan
Province
Slaughter processing 410,000,000.00 100.00% 100.00% 100.00% 100.00% 100.00% Establishment
Neixiang Muyuan Modern Agricultural
Complex Co., Ltd.
ʮ̡
(i)(ii) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Neixiang County, Henan
Province
Livestock and poultry
breeding
2,000,000,000.00 100.00% 100.00% 100.00% 100.00% 100.00% Establishment
Ningling Muyuan Meat Co., Ltd.
ʮ̡ (i)(ii) /H1118/H1118/H1118/H1118
Ningling County, Henan
Province
Slaughter processing 330,000,000.00 100.00% 100.00% 100.00% 100.00% 100.00% Establishment
APPENDIX I ACCOUNTANTS’ REPORT
– I-127 –


--- page 606 ---
Name of subsidiaries
Principal place of business/
Registered place Nature of business Registered capital
Effective interest held by the Group
Acquisition
method
As at 31 December
As at
30 September As at the
date of this
report2022 2023 2024 2025
Nanjing Jiangning Muyuan Livestock
Husbandry Co., Ltd.
ʮ̡ (i)(ii) /H1118/H1118
Nanjing, Jiangsu Province Livestock and poultry
breeding
2,360,000,000.00 100.00% 100.00% 100.00% 100.00% 100.00% Establishment
Neihuang Muyuan Livestock Husbandry
Co., Ltd.
ʮ̡ (i)(ii) /H1118/H1118/H1118/H1118/H1118
Neihuang County, Henan
Province
Livestock and poultry
breeding
480,000,000.00 100.00% 100.00% 100.00% 100.00% 100.00% Establishment
Yingshang Muyuan Meat Co., Ltd.
ʮ̡ (i)(iii) /H1118/H1118/H1118/H1118/H1118
Yingshang County, Anhui
Province
Slaughter processing 400,000,000.00 100.00% 100.00% 100.00% 100.00% 100.00% Establishment
Henan Muyuan Hog Breeding
Co., Ltd.
ʮ̡ (i)(iv) /H1118/H1118/H1118
Nanyang City, Henan
Province
Livestock and poultry
breeding
1,000,000,000.00 100.00% 100.00% 100.00% 100.00% 100.00% Establishment
Nanyang Muhua Animal Husbandry
Industry Development Co., Ltd.
ʮ̡
(i)(v) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Nanyang City, Henan
Province
Livestock and poultry
breeding
3,900,000,000.00 51.28% 51.28% 51.28% 51.28% 51.28% Establishment
Shandong Muhua Animal Husbandry
Industry Development Co., Ltd.
ʮ̡
(i)(viii) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Binzhou City, Shandong
Province
Livestock and poultry
breeding
3,300,000,000.00 51.52% 100.00% 100.00% – – Establishment
Huaxian Muhua Animal Husbandry
Industry Development Co., Ltd.
ʮ̡ (i)(v) /H1118
Hua County, Henan
Province
Livestock and poultry
breeding
3,700,000,000.00 51.35% 51.35% 100.00% 100.00% 100.00% Establishment
Fugou Muhua Animal Husbandry Industry
Development Co., Ltd.
ʮ̡ (i)(v) /H1118
Fugou County, Henan
Province
Livestock and poultry
breeding
3,300,000,000.00 51.52% 100.00% 100.00% 100.00% 100.00% Establishment
Ningling Muhua Animal Husbandry
Industry Development Co., Ltd.
ʮ̡ (i)(v) /H1118
Ningling County, Henan
Province
Livestock and poultry
breeding
2,900,000,000.00 51.72% 51.72% 100.00% 100.00% 100.00% Establishment
Huaibei Muhua Animal Husbandry
Industry Development Co., Ltd.
ʮ̡
(i)(vi) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Suixi County, Anhui
Province
Livestock and poultry
breeding
3,500,000,000.00 51.43% 51.43% 100.00% – – Establishment
APPENDIX I ACCOUNTANTS’ REPORT
– I-128 –


--- page 607 ---
Name of subsidiaries
Principal place of business/
Registered place Nature of business Registered capital
Effective interest held by the Group
Acquisition
method
As at 31 December
As at
30 September As at the
date of this
report2022 2023 2024 2025
Nanyang Muyuan Swine Supply Support
Co., Ltd.
ʮ̡
(i)(vii) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Nanyang City, Henan
Province
Livestock and poultry
breeding
3,500,000,000.00 71.43% 71.43% – – – Establishment
Nanyang Muyuan Poor Area Livestock
Husbandry Development Co., Ltd.
ʮ
̡ (i)(vii) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Nanyang City, Henan
Province
Livestock and poultry
breeding
2,670,000,000.00 70.04% 100.00% – – – Establishment
Shandong Huimin Muyuan Livestock
Husbandry Co., Ltd.
ʮ̡ (i)(ii) /H1118/H1118/H1118/H1118
Huimin County,
Shandong Province
Livestock and poultry
breeding
650,000,000.00 52.70% 100.00% 100.00% 100.00% 100.00% Establishment
Caoxian Muyuan Meat Co., Ltd.
ʮ̡ (i)(iii) /H1118/H1118/H1118/H1118/H1118
Cao County, Shandong
Province
Slaughter processing 600,000,000.00 100.00% 100.00% 100.00% 100.00% 100.00% Establishment
Chaohu Muyuan Livestock Husbandry
Co., Ltd.
ʮ̡ (i)(ii) /H1118/H1118/H1118/H1118/H1118
Chaohu City, Shandong
Province
Livestock and poultry
breeding
640,000,000.00 100.00% 100.00% 100.00% 100.00% 100.00% Establishment
Henan Muyuan Science and Technology
Co., Ltd.
ʮ̡ (i)(ix) /H1118/H1118/H1118/H1118/H1118/H1118
Nanyang City, Henan
Province
Grain purchase and
trade
20,000,000.00 100.00% 100.00% 100.00% 100.00% 100.00% Establishment
Tongyu Muyuan Meat Food Co., Ltd.
ʮ̡ (i)(iii) /H1118/H1118/H1118/H1118/H1118
Tongyu County, Jilin
Province
Slaughter processing 610,000,000.00 100.00% 100.00% 100.00% 100.00% 100.00% Establishment
Tieling Muyuan Meat Food Co., Ltd.
ʮ̡ (i)(ii) /H1118/H1118/H1118/H1118/H1118
Tieling City, Liaoning
Province
Slaughter processing 410,000,000.00 100.00% 100.00% 100.00% 100.00% 100.00% Establishment
Naimanqi Muyuan Meat Food Production
Co., Ltd.
ʮ̡ (i)(iii) /H1118
Tongliao City, Inner
Mongolia
Slaughter processing 500,000,000.00 100.00% 100.00% 100.00% 100.00% 100.00% Establishment
Lindian County Muyuan Meat Food
Co., Ltd.
ʮ̡ (i)(ii) /H1118/H1118/H1118/H1118
Daqing City, Heilongjiang
Province
Slaughter processing 350,000,000.00 100.00% 100.00% 100.00% 100.00% 100.00% Establishment
APPENDIX I ACCOUNTANTS’ REPORT
– I-129 –


--- page 608 ---
Notes:
(i) The official names of these entities are in Chinese. The English translation is for identification purpose
only. These entities are all limited liability companies under the law of the PRC.
(ii) The statutory financial statements of these entities for the year ended 31 December 2022 were prepared
in accordance with the CASBE and were audited by Zhongxinghua Certified Public Accountants LLP .
The statutory financial statements of these entities for the years ended 31 December 2023 and 2024 were
prepared in accordance with the CASBE and were audited by KPMG Huazhen LLP . No audited financial
statements were prepared for these entities for the nine months ended 30 September 2025.
(iii) The statutory financial statements of this entity for the years ended 31 December 2022, 2023 and 2024
were prepared in accordance with the CASBE and were audited by Zhongxinghua Certified Public
Accountants LLP , KPMG Huazhen LLP and Henan Jinyiyuan CPA Limited, respectively. No audited
financial statements were prepared for this entity for the nine months ended 30 September 2025.
(iv) The statutory financial statements of this entity for the years ended 31 December 2022 and 2023 were
prepared in accordance with the CASBE and were audited by Zhongxinghua Certified Public
Accountants LLP and KPMG Huazhen LLP , respectively. No audited financial statements were prepared
for this entity for the year ended 31 December 2024 and the nine months ended 30 September 2025.
(v) The statutory financial statements of these entities for the years ended 31 December 2022 and 2023 were
prepared in accordance with the CASBE and were audited by Zhongxinghua Certified Public
Accountants LLP and Grant Thornton Zhitong Certified Public Accountants LLP , respectively. No
audited financial statements were prepared for these entities for the year ended 31 December 2024 and
the nine months ended 30 September 2025.
(vi) The statutory financial statements of this entity for the year ended 31 December 2022 were prepared in
accordance with the CASBE and were audited by Zhongxinghua Certified Public Accountants LLP . No
audited financial statements were prepared for this entity for the years ended 31 December 2023 and
2024 and the nine months ended 30 September 2025.
(vii) The statutory financial statements of these entities for the years ended 31 December 2022 and 2023 were
prepared in accordance with the CASBE and were audited by Zhongxinghua Certified Public
Accountants LLP and Grant Thornton Zhitong Certified Public Accountants LLP , respectively. These
entities were de-registered during the year ended 31 December 2024 and no audited financial statements
were prepared for these entities for the year ended 31 December 2024.
(viii) The statutory financial statements of this entity for the years ended 31 December 2022 and 2023 were
prepared in accordance with the CASBE and were audited by Zhongxinghua Certified Public
Accountants LLP and Grant Thornton Zhitong Certified Public Accountants LLP , respectively. This
entity was de-registered during the nine mouths ended 30 September 2025 and no audited financial
statements were prepared for these entities for the year ended 31 December 2024 and the nine months
ended 30 September 2025.
(ix) The statutory financial statements of this entity for the years ended 31 December 2022, 2023 and 2024
were prepared in accordance with the CASBE and were audited by Zhongxinghua Certified Public
Accountants LLP , Grant Thornton Zhitong Certified Public Accountants LLP and KPMG Huazhen LLP ,
respectively. No audited financial statements were prepared for this entity for the nine months ended 30
September 2025.
APPENDIX I ACCOUNTANTS’ REPORT
– I-130 –


--- page 609 ---
(2) Material non-wholly owned subsidiary
Nanyang Muhua Animal Husbandry Industry Development Co., Ltd.
As at 31 December/Y ear ended 31 December
As at 30
September/Nine
months ended
30 September
2022 2023 2024 2025
Interests held by non-controlling
interests /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111848.72% 48.72% 48.72% 48.72%
Profit allocated to non-
controlling interests during the
year/period /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118288,358,135.93 56,965,375.49 305,696,883.02 207,199,204.93
Dividend declared to non-
controlling shareholders during
the year/period /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118103,156,750.83 196,000,000.00 301,535,877.27 –
Balance of non-controlling
interests at the end of the
year/period /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,172,921,833.69 2,033,887,209.18 2,038,048,214.93 2,245,247,419.86
(3) Key financial information about material non-wholly owned subsidiary
The following table sets out the key financial information of the above subsidiary without offsetting
intra-group transactions, but with adjustments made for any differences in accounting policies:
Nanyang Muhua Animal Husbandry Industry Development Co., Ltd.
As at 31 December/Y ear ended 31 December
As at 30
September/Nine
months ended
30 September
2022 2023 2024 2025
Current assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185,507,770,342.41 4,681,520,196.59 4,216,012,841.05 4,851,064,999.90
Non-current assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,540,168,604.48 3,541,180,130.60 3,544,234,372.54 3,462,008,652.55
Total assets /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11189,047,938,946.89 8,222,700,327.19 7,760,247,213.59 8,313,073,652.45
Current liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,167,987,514.62 2,485,761,977.34 2,234,624,720.66 2,571,892,007.68
Non-current liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118351,115,614.35 529,754,297.44 333,807,605.26 74,399,910.79
Total liabilities /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,519,103,128.97 3,015,516,274.78 2,568,432,325.92 2,646,291,918.47
Revenue /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,948,693,092.07 3,467,341,194.82 4,083,127,580.35 3,199,637,682.53
Net profit /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118731,464,137.55 223,535,865.03 799,314,732.02 474,104,275.21
Total comprehensive income /H1118/H1118/H1118731,464,137.55 223,535,865.03 799,314,732.02 474,104,275.21
Net cash (outflow)/inflow from
operating activities /H1118/H1118/H1118/H1118/H1118/H1118/H1118(1,358,516,536.87) 508,588,599.48 1,675,207,090.28 666,127,852.01
APPENDIX I ACCOUNTANTS’ REPORT
– I-131 –


--- page 610 ---
2 Transactions that cause changes in the Group’s interests in subsidiaries that do not result in loss of
control
During the year ended 31 December 2022, the Group has completed the acquisition of 48.54% non-controlling
interests of Nanyang Musheng Hog Industry Development Co., Ltd. and 40.00% non-controlling interests of Nanyang
Muyuan Maiming Industry Development Co., Ltd. As at 31 December 2022, the above subsidiaries become
wholly-owned subsidiaries of the Group. The impact of the transactions on non-controlling interests and
shareholders’ equity attributable to the shareholders of the Company is as follows:
Nanyang Musheng
Hog Industry
Development
Co., Ltd.
Nanyang Muyuan
Maiming Industry
Development
Co., Ltd.
Acquisition cost
– Cash /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118555,000,000.00 562,465,753.42
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118555,000,000.00 562,465,753.42
Less: Share of net assets in subsidiaries based on the interests
acquired /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118554,850,007.02 490,716,045.39
Difference 149,992.98 71,749,708.03
Including:
Adjustment to capital reserve /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118149,992.98 71,749,708.03
During the year ended 31 December 2023, the Group has completed the acquisition of 29.96% non-controlling
interests of Nanyang Muyuan Poor Area Livestock Husbandry Development Co., Ltd., 48.48% non-controlling
interests of Shandong Muhua Animal Husbandry Industry Development Co., Ltd. and 48.48% non-controlling
interests of Fugou Muhua Animal Husbandry Industry Development Co., Ltd.. As at 31 December 2023, the above
subsidiaries become wholly-owned subsidiaries of the Group. The impact of the transactions on non-controlling
interests and shareholders’ equity attributable to the shareholders of the Company is as follows:
Nanyang Muyuan
Poor Area Livestock
Husbandry
Development
Co., Ltd.
Shandong Muhua
Animal Husbandry
Industry
Development
Co., Ltd.
Fugou Muhua
Animal Husbandry
Industry
Development
Co., Ltd.
Acquisition cost
– Cash /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,466,166,747.09 1,708,266,367.00 1,982,165,548.00
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,466,166,747.09 1,708,266,367.00 1,982,165,548.00
Less: Share of net assets in subsidiaries
based on the interests acquired /H1118/H1118/H1118/H1118/H1118/H11181,504,330,447.60 1,626,920,250.82 1,887,776,826.64
Difference /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(38,163,700.51) 81,346,116.18 94,388,721.36
Including:
Adjustment to capital reserve /H1118/H1118/H1118/H1118/H1118/H1118/H1118(38,163,700.51) 81,346,116.18 94,388,721.36
During the year ended 31 December 2024, the Group has completed the acquisition of 30.00% non-controlling
interests of Qiqihar Muchen Animal Husbandry Industry Development Co., Ltd., 24.55% non-controlling interests of
Jiangsu Tongshan Muyuan Livestock Husbandry Co., Ltd., 28.57% non-controlling interests of Nanyang Muyuan
Swine Supply Support Co., Ltd., 48.65% non-controlling interests of Huaxian Muhua Animal Husbandry Industry
Development Co., Ltd., 48.57% non-controlling interests of Huaibei Muhua Animal Husbandry Industry
Development Co., Ltd. and 48.28% non-controlling interests of Ningling Muhua Animal Husbandry Industry
Development Co., Ltd.. As at 31 December 2024, the above subsidiaries become wholly-owned subsidiaries of the
Group. The impact of the transactions on non-controlling interests and shareholders’ equity attributable to the
shareholders of the Company is as follows:
APPENDIX I ACCOUNTANTS’ REPORT
– I-132 –


--- page 611 ---
Qiqihar Muchen
Animal Husbandry
Industry
Development
Co., Ltd.
Jiangsu Tongshan
Muyuan Livestock
Husbandry
Co., Ltd.
Nanyang Muyuan
Swine Supply
Support
Co., Ltd.
Huaxian Muhua
Animal Husbandry
Industry
Development
Co., Ltd.
Huaibei Muhua
Animal Husbandry
Industry
Development
Co., Ltd.
Ningling Muhua
Animal Husbandry
Industry
Development
Co., Ltd.
Acquisition cost
– Cash /H1118/H1118/H1118/H1118/H1118/H1118199,610,958.90 500,000,000.00 1,254,601,601.70 3,309,740,000.00 2,997,460,000.00 2,245,990,000.00
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118199,610,958.90 500,000,000.00 1,254,601,601.70 3,309,740,000.00 2,997,460,000.00 2,245,990,000.00
Less: Share of net
assets in
subsidiaries based
on the interests
acquired /H1118/H1118/H1118/H1118/H1118173,619,049.16 433,881,605.12 993,788,788.14 1,839,740,313.86 1,717,772,570.28 1,398,038,873.37
Difference /H1118/H1118/H1118/H1118/H111825,991,909.74 66,118,394.88 260,812,813.56 1,469,999,686.14 1,279,687,429.72 847,951,126.63
Including:
Adjustment to
capital reserve /H1118 25,991,909.74 66,118,394.88 260,812,813.56 1,469,999,686.14 1,279,687,429.72 847,951,126.63
During the nine months ended 30 September 2025, the Group has completed the acquisition of 43.38%
non-controlling interests of Sheqi Muyuan Livestock Husbandry Co., Ltd., 39.51% non-controlling interests of
Heilongjiang Lanxi Muyuan Livestock Husbandry Co., Ltd. and 35.79% non-controlling interests of Xinhe Muyuan
Livestock Husbandry Co., Ltd. As at 30 September 2025, the above subsidiaries become wholly-owned subsidiaries
of the Group. The impact of the transactions on non-controlling interests and shareholders’ equity attributable to the
shareholders of the Company is as follows:
Sheqi Muyuan
Livestock Husbandry
Co., Ltd.
Heilongjiang Lanxi
Muyuan Livestock
Husbandry Co., Ltd.
Xinhe Muyuan
Livestock Husbandry
Co., Ltd.
Acquisition cost
– Cash /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,000,000,000.00 500,000,000.00 500,000,000.00
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,000,000,000.00 500,000,000.00 500,000,000.00
Less: Share of net assets in subsidiaries
based on the interests acquired /H1118/H1118/H1118/H1118/H1118/H11181,071,782,044.17 506,685,807.24 511,102,570.78
Difference /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(71,782,044.17) (6,685,807.24) (11,102,570.78)
Including:
Adjustment to capital reserve /H1118/H1118/H1118/H1118/H1118/H1118/H1118(71,782,044.17) (6,685,807.24) (11,102,570.78)
3 Interests in associates
As at 31 December As at 30 September
2022 2023 2024 2025
Associates
– Material associates /H1118/H1118/H1118/H1118247,310,864.94 313,212,147.25 438,877,983.23 436,385,742.06
– Immaterial associates /H1118/H1118334,537,084.65 405,535,933.29 464,869,867.71 502,810,760.01
Subtotal /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118581,847,949.59 718,748,080.54 903,747,850.94 939,196,502.07
Less: Provision for
impairment /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118––––
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118581,847,949.59 718,748,080.54 903,747,850.94 939,196,502.07
APPENDIX I ACCOUNTANTS’ REPORT
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(1) Material associates as at 31 December 2022, 2023 and 2024 and 30 September 2025:
Name of investee
Principal place of
business/Registered
place Nature of business
Shareholding
percentage
Accounting
treatment of
investments in
joint ventures
or associatesDirect Indirect
Associates
Henan Longda
Muyuan Meat Co.,
Ltd. /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Neixiang County,
Nanyang City
Animal
slaughtering
40.00% – Equity method
Guangdong Guangken
Muyuan Livestock
Husbandry
Co., Ltd. /H1118/H1118/H1118/H1118/H1118/H1118/H1118
Leizhou,
Zhanjiang City,
Guangdong
province
Livestock breeding 34.00% – Equity method
(2) Key financial information of material associates
The following table sets out the key financial information of the Group’s material associates, adjusted for fair
value adjustments at the time of acquisition and any differences in the accounting policies of the Group. The table
also reconciles the key financial information to the carrying amount of the Group’s investments in the associates
under the equity method:
Henan Longda Muyuan Meat Co., Ltd. Guangdong Guangken Muyuan Livestock Husbandry Co., Ltd.
As at 31 December/Y ear ended 31 December
As at
30 September/Nine
months ended
30 September As at 31 December/Y ear ended 31 December
As at
30 September/Nine
months ended
30 September
2022 2023 2024 2025 2022 2023 2024 2025
Current assets /H1118/H1118/H1118/H1118/H1118361,145,745.89 434,157,947.28 479,191,953.55 419,674,315.62 236,298,542.39 109,315,461.23 507,076,321.39 395,055,538.58
Non-current assets /H1118/H1118/H1118188,235,843.04 195,307,692.38 202,137,824.11 203,773,352.21 202,733,628.73 685,388,800.19 807,339,396.21 769,736,480.75
Total assets /H1118/H1118/H1118/H1118/H1118/H1118549,381,588.93 629,465,639.66 681,329,777.66 623,447,667.83 439,032,171.12 794,704,261.42 1,314,415,717.60 1,164,792,019.33
Current liabilities /H1118/H1118/H1118/H1118218,850,522.64 327,665,367.87 373,379,802.53 338,508,771.65 40,685,416.28 183,269,648.21 279,054,142.00 147,298,596.36
Non-current liabilities /H1118/H1118 2,355,712.34 1,515,026.33 810,078.81 523,979.41 34,816,379.77 34,054,058.70 77,465,572.74 43,168,590.92
Total liabilities /H1118/H1118/H1118/H1118221,206,234.98 329,180,394.20 374,189,881.34 339,032,751.06 75,501,796.05 217,323,706.91 356,519,714.74 190,467,187.28
Equity attributable to
shareholders of the
associate /H1118/H1118/H1118/H1118/H1118/H1118328,175,353.95 300,285,245.46 307,139,896.32 284,414,916.77 363,530,375.07 577,380,554.51 957,896,002.86 –
Equity attributable to the
Company /H1118/H1118/H1118/H1118/H1118/H1118131,270,141.58 120,114,098.18 122,855,958.53 113,765,966.71 123,600,327.52 196,309,388.53 325,684,640.97 331,270,442.90
Less: Elimination of
unrealised profit or loss
on intra-group
transactions /H1118/H1118/H1118/H1118/H1118(5,893,826.37) (2,527,561.73) (9,662,616.27) (8,147,965.54) (1,665,777.79) (683,777.73) – –
Carrying amount of
interests in associates /H1118 125,376,315.21 117,586,536.45 113,193,342.26 105,618,001.17 121,934,549.73 195,625,610.80 325,684,640.97 331,270,442.90
Revenue /H1118/H1118/H1118/H1118/H1118/H1118/H11182,995,183,395.47 2,478,990,188.50 2,432,157,479.67 1,652,457,455.33 54,697,979.30 94,236,207.39 696,092,270.81 733,458,815.36
Net profit/(loss) /H1118/H1118/H1118/H111857,183,709.48 (27,890,108.49) 6,854,650.86 (22,724,979.55) 10,883,848.39 (23,325,520.51) 160,515,448.35 139,751,910.72
Total comprehensive
income /H1118/H1118/H1118/H1118/H1118/H111857,183,709.48 (27,890,108.49) 6,854,650.86 (22,724,979.55) 10,883,848.39 (23,325,520.51) 160,515,448.35 139,751,910.72
APPENDIX I ACCOUNTANTS’ REPORT
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(3) Summarised financial information of immaterial associates:
As at 31 December/Y ear ended 31 December
As at 30 September/
Nine months ended
30 September
2022 2023 2024 2025
Associates:
Aggregate carrying amount of
investments /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118334,537,084.65 405,535,933.29 464,869,867.71 502,810,760.01
Aggregate amount of share of /H1118
– Net profit/(loss) /H1118/H1118/H1118/H1118/H1118/H1118/H111813,198,483.61 (10,452,385.15) 11,735,114.25 14,263,612.81
– Total comprehensive
income /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111813,198,483.61 (10,452,385.15) 11,735,114.25 14,263,612.81
VII. GOVERNMENT GRANTS
1 Government grants recognised in profit or loss
Item
Y ear ended 31 December Nine months ended 30 September
2022 2023 2024 2024 2025
(unaudited)
Other income /H1118/H1118/H1118/H1118/H1118/H1118/H11182,167,851,654.73 2,776,362,617.05 2,992,721,127.09 2,537,046,306.42 2,012,623,361.95
Financial expenses —
interest subsidy /H1118/H1118/H1118/H1118/H1118108,170,730.65 100,471,014.23 124,341,023.05 83,632,894.03 61,877,782.76
Non-operating income /H1118/H1118225,184,409.9 7––––
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,501,206,795.35 2,876,833,631.28 3,117,062,150.14 2,620,679,200.45 2,074,501,144.71
2 Liabilities relating to government grants
Y ear ended 31 December 2022
Item
Balance as at
1 January Additions
Amounts
recognised in
non-operating
income
Amounts
recognised in
other income Other changes
Balance as at
31 December
Related to
assets/income
Deferred income /H1118/H1118488,452,169.74 299,532,076.02 – 102,022,718.03 – 685,961,527.73
Related to
assets/income
Y ear ended 31 December 2023
Item
Balance as at
1 January Additions
Amounts
recognised in
non-operating
income
Amounts
recognised in
other income Other changes
Balance as at
31 December
Related to
assets/income
Deferred income /H1118/H1118685,961,527.73 210,688,082.96 – 96,948,040.22 – 799,701,570.47
Related to
assets/income
Y ear ended 31 December 2024
Item
Balance as at
1 January Additions
Amounts
recognised in
non-operating
income
Amounts
recognised in
other income Other changes
Balance as at
31 December
Related to
assets/income
Deferred income /H1118/H1118799,701,570.47 100,262,134.75 – 121,099,597.92 – 778,864,107.30
Related to
assets/income
APPENDIX I ACCOUNTANTS’ REPORT
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--- page 614 ---
Nine months ended 30 September 2025
Item
Balance as at
1 January Additions
Amounts
recognised in
non-operating
income
Amounts
recognised in
other income Other changes
Balance as at
30 September
Related to
assets/income
Deferred income /H1118/H1118778,864,107.30 73,880,461.98 – 92,217,870.86 – 760,526,698.42
Related to
assets/income
VIII. RISK RELATED TO FINANCIAL INSTRUMENTS
1 Risks from use of financial instruments
The Group has exposure to the following main risks from its use of financial instruments in the normal course
of operations:
– Credit risk
– Liquidity risk
– Interest rate risk
– Foreign currency risk
The following mainly presents information about the Group’s exposure to each of the above risks and their
sources, their changes during the reporting period, and the Group’s objectives, policies and processes for measuring
and managing risks, and their changes during the reporting period.
The Group aims to achieve an appropriate balance between the risks and benefits from its use of financial
instruments and to mitigate the adverse effects that the risks of financial instruments have on the Group’s financial
performance. Based on these objectives, the Group’s risk management policies have been established to identify and
analyse the risks faced by the Group, to set appropriate risk limits and controls, and to monitor risks. Risk
management policies and systems are reviewed regularly to reflect changes in market conditions and the Group’s
activities.
(1) Credit risk
Credit risk is the risk that one party to a financial instrument will cause a financial loss for the other party by
failing to discharge an obligation. The Group’s credit risk is primarily attributable to cash at bank, accounts
receivable and other receivables. Exposure to these credit risks is monitored by management on an ongoing basis.
The cash at bank of the Group is mainly held with well-known financial institutions. Management does not
foresee any significant credit risks from cash at bank and does not expect that these financial institutions may default
and cause losses to the Group.
The Group’s exposure to credit risk is influenced mainly by the individual characteristics of each customer
rather than the industry or country/region in which the customers operate. Therefore, significant concentrations of
credit risk primarily arise when the Group has significant exposure to individual customers.
In respect of accounts receivable and other receivables, the Group has established a credit policy under which
individual credit evaluations are performed on all customers and debtors to determine the credit limit and terms
applicable to the customers and debtors. These evaluations focus on the customers’ financial position, the external
ratings of the customers and their bank credit records where available. Normally, the Group does not obtain collateral
from customers.
The maximum exposure to credit risk of the Group is represented by the carrying amount of each financial
asset (including derivative financial instruments) in the balance sheet.
APPENDIX I ACCOUNTANTS’ REPORT
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(2) Liquidity risk
Liquidity risk is the risk that an enterprise will encounter difficulty in meeting obligations that are settled by
delivering cash or another financial asset. The Group are responsible for cash management, including cash inflows
from operating activities of the Group and obtaining bank facilities to cover expected cash demands. Meanwhile, the
Group is responsible for monitoring long-term borrowings with contractual covenants to ensure compliance with
contractual covenants during the borrowing period. The Group’s policy is to regularly monitor its liquidity
requirements and its compliance with lending covenants, to ensure that it maintains sufficient reserves of cash,
readily realisable marketable securities and adequate committed lines of facilities from major financial institutions
to meet its liquidity requirements in the short and longer term.
The following tables set out the remaining contractual maturities of the Group’s financial liabilities at each
reporting date, which are based on contractual undiscounted cash flows (including interest payments computed using
contractual rates or, if floating, based on rates current at the end of each reporting period) and the earliest date the
Group can be required to pay:
Contractual undiscounted cash flow as at 31 December 2022
Within 1 year or on
demand (inclusive)
More than 1 year
but less than
2 years (inclusive)
More than 2 years
but less than
5 years (inclusive) More than 5 years Total
Short-term loans /H1118/H1118/H1118/H1118/H111829,619,959,839.46 – – – 29,619,959,839.46
Bills payable /H1118/H1118/H1118/H1118/H1118/H1118/H11183,157,054,048.07 – – – 3,157,054,048.07
Accounts payable /H1118/H1118/H1118/H1118/H111825,186,203,024.02 – – – 25,186,203,024.02
Other payables /H1118/H1118/H1118/H1118/H1118/H11188,311,165,084.58 – – – 8,311,165,084.58
Long-term loans /H1118/H1118/H1118/H1118/H11186,693,223,498.37 5,125,216,309.86 5,972,301,934.62 375,354,407.90 18,166,096,150.75
Debentures payable /H1118/H1118/H1118/H1118309,875,636.40 76,351,272.80 10,469,668,282.70 – 10,855,895,191.90
Lease liabilities /H1118/H1118/H1118/H1118/H1118/H11182,359,715,918.79 694,505,473.63 3,514,469,522.34 981,694,753.88 7,550,385,668.64
Long-term payables /H1118/H1118/H1118/H11181,389,781,987.23 1,043,222,889.91 1,053,270,155.86 750,000.00 3,487,025,033.00
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111877,026,979,036.92 6,939,295,946.20 21,009,709,895.52 1,357,799,161.78 106,333,784,040.42
Contractual undiscounted cash flow as at 31 December 2023
Within 1 year or on
demand (inclusive)
More than 1 year
but less than
2 years (inclusive)
More than 2 years
but less than
5 years (inclusive) More than 5 years Total
Short-term loans /H1118/H1118/H1118/H1118/H111847,563,341,535.87 – – – 47,563,341,535.87
Bills payable /H1118/H1118/H1118/H1118/H1118/H1118/H11182,513,903,720.49 – – – 2,513,903,720.49
Accounts payable /H1118/H1118/H1118/H1118/H111823,463,033,895.99 – – – 23,463,033,895.99
Other payables /H1118/H1118/H1118/H1118/H1118/H111811,092,383,654.66 – – – 11,092,383,654.66
Long-term loans /H1118/H1118/H1118/H1118/H11186,155,628,159.34 6,070,014,537.71 4,628,870,113.53 202,335,340.11 17,056,848,150.69
Debentures payable /H1118/H1118/H1118/H111876,348,439.20 114,522,658.80 10,354,757,066.50 – 10,545,628,164.50
Lease liabilities /H1118/H1118/H1118/H1118/H1118/H11181,320,646,603.99 708,283,589.07 3,012,699,299.32 1,048,104,372.98 6,089,733,865.36
Long-term payables /H1118/H1118/H1118/H11182,169,356,746.35 1,998,100,432.53 704,365,298.05 5,883,750.00 4,877,706,226.93
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111894,354,642,755.89 8,890,921,218.11 18,700,691,777.40 1,256,323,463.09 123,202,579,214.49
Contractual undiscounted cash flow as at 31 December 2024
Within 1 year or on
demand (inclusive)
More than 1 year
but less than
2 years (inclusive)
More than 2 years
but less than
5 years (inclusive) More than 5 years Total
Short-term loans /H1118/H1118/H1118/H1118/H111845,859,986,226.43 – – – 45,859,986,226.43
Bills payable /H1118/H1118/H1118/H1118/H1118/H1118/H11182,723,724,853.68 – – – 2,723,724,853.68
Accounts payable /H1118/H1118/H1118/H1118/H111817,993,020,605.06 – – – 17,993,020,605.06
Other payables /H1118/H1118/H1118/H1118/H1118/H11188,348,220,056.94 – – – 8,348,220,056.94
Long-term loans /H1118/H1118/H1118/H1118/H11186,001,470,880.17 4,463,607,941.98 4,791,513,983.67 73,026,168.52 15,329,618,974.34
Debentures payable /H1118/H1118/H1118/H1118114,518,322.00 143,147,902.50 10,211,217,045.00 – 10,468,883,269.50
Other current liabilities /H1118/H11181,017,013,698.63 – – – 1,017,013,698.63
Lease liabilities /H1118/H1118/H1118/H1118/H1118/H11181,270,954,395.02 2,523,639,324.01 976,169,837.84 1,534,057,224.99 6,304,820,781.86
Long-term payables /H1118/H1118/H1118/H11181,673,509,276.62 937,114,076.28 267,867,235.25 7,371,500.00 2,885,862,088.15
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111885,002,418,314.55 8,067,509,244.77 16,246,768,101.76 1,614,454,893.51 110,931,150,554.59
APPENDIX I ACCOUNTANTS’ REPORT
– I-137 –


--- page 616 ---
Contractual undiscounted cash flow as at 30 September 2025
Within 1 year or on
demand (inclusive)
More than 1 year
but less than
2 years (inclusive)
More than 2 years
but less than
5 years (inclusive) More than 5 years Total
Short-term loans /H1118/H1118/H1118/H1118/H111840,175,407,385.83 – – – 40,175,407,385.83
Bills payable /H1118/H1118/H1118/H1118/H1118/H1118/H11182,095,063,771.80 – – – 2,095,063,771.80
Accounts payable /H1118/H1118/H1118/H1118/H111812,306,405,043.65 – – – 12,306,405,043.65
Other payables /H1118/H1118/H1118/H1118/H1118/H111811,840,928,139.02 – – – 11,840,928,139.02
Long-term loans /H1118/H1118/H1118/H1118/H11184,830,603,797.94 4,942,205,243.63 2,892,422,893.69 497,534,579.27 13,162,766,514.53
Debentures payable /H1118/H1118/H1118/H1118285,482,548.34 2,230,968,902.08 10,044,891,010.68 – 12,561,342,461.10
Other current liabilities /H1118/H1118 403,693,403.40 – – – 403,693,403.40
Lease liabilities /H1118/H1118/H1118/H1118/H1118/H11183,169,804,000.56 507,424,107.71 813,301,575.12 1,519,906,692.67 6,010,436,376.06
Long-term payables /H1118/H1118/H1118/H11181,080,788,852.85 568,572,353.63 86,529,266.13 7,209,250.00 1,743,099,722.61
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111876,188,176,943.39 8,249,170,607.05 13,837,144,745.62 2,024,650,521.94 100,299,142,818.00
(3) Interest rate risk
Interest-bearing financial instruments at fixed rates and at variable rates expose the Group to fair value interest
rate risk and cash flow interest risk, respectively. The Group determines the appropriate weightings for fixed and
floating rate interest-bearing instruments based on current market conditions and performs regular reviews and
monitoring to achieve an appropriate mix of fixed and floating rate exposure. As at 31 December 2022, 2023 and 2024
and 30 September 2025, the fixed rate interest-bearing financial instruments of the Group amounted to net financial
liabilities of RMB43,074,756,150.40, RMB45,121,066,732.20, RMB47,787,652,434.77 and RMB26,705,061,346.00,
respectively. As at 31 December 2022, 2023 and 2024 and 30 September 2025, the variable rate interest-bearing
financial instruments of the Group amounted to net financial assets of RMB7,960,586,345.81, net financial liabilities
of RMB1,125,533,746.58, net financial liabilities of RMB3,093,448,391.73 and net financial liabilities of
RMB13,855,710,419.05, respectively.
As at 31 December 2022, it was estimated that a general increase of 50 basis points in interest rates, with all
other variables held constant, would increase the Group’s equity by RMB29,852,198.80 and net profit by
RMB29,852,198.80. As at 31 December 2023 and 2024 and 30 September 2025, it was estimated that a general
increase of 50 basis points in interest rates, with all other variables held constant, would decrease the Group’s equity
by RMB4,220,751.55, RMB11,600,431.47 and RMB25,979,457.04, respectively, and net profit by
RMB4,220,751.55, RMB11,600,431.47 and RMB25,979,457.04, respectively.
The sensitivity analysis above indicates the instantaneous change in net profit and equity that would arise
assuming that the change in interest rates had occurred at the balance sheet date and had been applied to re-measure
those financial instruments held by the Group which expose the Group to fair value interest rate risk at the balance
sheet date. In respect of the exposure to cash flow interest rate risk arising from floating rate non-derivative
instruments held by the Group at the balance sheet date, the impact on net profit and equity of such a change in
interest rates is estimated as an annualised impact on interest expense or income.
(4) Foreign currency risk
In respect of cash at bank and on hand, accounts and bills payable, and interest-bearing loans denominated in
foreign currencies other than the functional currency, the Group ensures that its net exposure is kept to an acceptable
level by buying or selling foreign currencies at spot rates when necessary to address short-term imbalances.
APPENDIX I ACCOUNTANTS’ REPORT
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--- page 617 ---
(a) As at the end of each reporting period, the Group’s exposure to currency risk arising from recognised assets or liabilities denominated in foreign cur rencies is presented in the
following tables:
For presentation purposes, the amounts of the exposure are shown in RMB, translated using the spot rate at the balance sheet date. Differences resulti ng from the translation
of foreign currency financial statements are excluded.
As at 31 December As at 30 September
2022 2023 2024 2025
Balance in
foreign currency
Balance in
RMB equivalent
Balance in
foreign currency
Balance in
RMB equivalent
Balance in
foreign currency
Balance in
RMB equivalent
Balance in
foreign currency
Balance in
RMB equivalent
Cash at bank and on hand
– USD /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118138,726.31 966,173.26 76,323.82 540,578.72 1,197,048.74 8,604,865.17 1,178,594.43 8,374,502.72
– EUR /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111845,612,782.60 338,579,123.96 40,593.12 319,029.41 6,078.02 45,741.36 – –
– SGD /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–––––– 3,297.81 18,181.16
– VND /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–––––– 189,425,759.00 53,438.85
Bills payable
– USD /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(12,286,816.52) (85,572,762.34) ––––––
– EUR /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(94,919.40) (704,577.21) ––––––
– SGD /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118––––––––
Accounts payable
– USD /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – (25,779.70) (182,589.88) ––––
– EUR /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118––––––––
– SGD /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118––––––––
Long-term loans
– USD /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(170,019,446.26) (1,184,117,435.43) ––––––
– EUR /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(45,631,787.93) (338,720,198.62) (41,539,508.15) (326,467,302.45) (34,024,966.02) (256,061,686.77) – –
– SGD /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118––––––––
Net balance sheet
exposure
– USD /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(182,167,536.47) (1,268,724,024.51) 50,544.12 357,988.84 1,197,048.74 8,604,865.17 1,178,594.43 8,374,502.72
– EUR /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(113,924.73) (845,651.87) (41,498,915.03) (326,148,273.04) (34,018,888.00) (256,015,945.41) – –
– SGD /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–––––– 3,297.81 18,181.16
– VND /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–––––– 189,425,759.00 53,438.85
APPENDIX I ACCOUNTANTS’ REPORT
– I-139 –


--- page 618 ---
(b) The following are the exchange rates for RMB against foreign currencies applied by the Group:
Average rate for the year ended
31 December
Average
rate for the
nine months
ended
30
September Mid-spot rate as at 31 December
Mid-spot
rate as at
30
September
2022 2023 2024 2025 2022 2023 2024 2025
USD /H1118/H1118/H11186.6720 7.0491 7.1134 7.1654 6.9646 7.0827 7.1884 7.1055
EUR /H1118/H1118/H11187.3164 7.6436 7.7172 N/A 7.4229 7.8592 7.5257 N/A
SGD /H1118/H1118/H1118N/A N/A N/A 5.4836 N/A N/A N/A 5.5131
VND /H1118/H1118/H1118N/A N/A N/A 0.0003 N/A N/A N/A 0.0003
(c) Sensitivity analysis
Assuming all other risk variables remained constant, a 5% strengthening of the RMB against the USD, EUR,
SGD and VND at the end of each reporting period would have increased the Group’s equity and net profit by the
amounts shown below. The amounts are presented in RMB and translated using the spot rate at the balance sheet date.
Equity Net profit
As at 31 December 2022
– USD /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111847,577,150.92 47,577,150.92
– EUR /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111831,711.95 31,711.95
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111847,608,862.87 47,608,862.87
As at 31 December 2023
– USD /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(13,424.58) (13,424.58)
– EUR /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111812,230,560.24 12,230,560.24
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111812,217,135.66 12,217,135.66
As at 31 December 2024
– USD /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(322,682.44) (322,682.44)
– EUR /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11189,600,597.95 9,600,597.95
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11189,277,915.51 9,277,915.51
As at 30 September 2025
– USD /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(314,043.85) (314,043.85)
– SGD /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(681.79) (681.79)
– VND /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(2,003.96) (2,003.96)
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(316,729.60) (316,729.60)
A 5% weakening of the RMB against the USD, EUR, SGD and VND at the end of each reporting period would
have had the equal but opposite effect to the amounts shown above, on the basis that all other variables remained
constant.
The sensitivity analysis above assumes that the change in foreign exchange rates had been applied to
re-measure those financial instruments held by the Group which expose the Group to foreign currency risk at the
balance sheet date. The analysis excludes differences that would result from the translation of foreign currency
financial statements.
APPENDIX I ACCOUNTANTS’ REPORT
– I-140 –


--- page 619 ---
2 Hedge
In order to manage the risk of expected sales and purchase price fluctuations, the Group has purchased some
derivatives and adopted hedge accounting.
The Group is mainly engaged in feed production, hog breeding and sales. During the Track Record Period, the
major hedging instruments held by the Group are a number of commodity futures contracts in order to manage the
risk of price fluctuations for hog sales, corn and soybean meal purchases. The Group adopts cash flow hedging for
the future contracts in relation to expected hog sales, corn and soybean meal purchases, and designates these futures
contracts held as hedging instruments.
For the years ended 31 December 2022 and 2023, the Group entered into foreign exchange forward contracts
and interest rate swap contracts, to hedge the foreign exchange and interest rate risks arising from the expected
repayment of principal and interest of foreign currency dominated borrowings. The Group applied cash flow hedging
for the forward contracts and interest rate swap contracts in relation to the expected repayment of principal and
interest of foreign currency dominated borrowings, and designates these forward contracts and interest rate swap
contracts held as hedging instruments.
Where the Group engages in hedging activities that meet the criteria and applies hedge accounting:
Y ear ended 31 December 2022
Hedged items
Hedging
instruments
Hedge reserve
balance as at
1 January
Gain or loss of hedging
instruments within the year Hedge reserve
transferred
out during
the year
Income tax
impact
Hedge reserve
balance as at
31 DecemberEffective part
Ineffective
part
Expected hog sales
and purchase of
corn and
soybean meal /H1118/H1118
Futures 1,015,570.00 12,889,530.00 – (13,588,600.00) – 316,500.00
Foreign currency
borrowings /H1118/H1118/H1118
Interest rate
swap and
foreign
exchange
forward
(54,824,730.77) 84,945,542.25 – (27,395,774.66) – 2,725,036.82
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118 (53,809,160.77) 97,835,072.25 – (40,984,374.66) – 3,041,536.82
Y ear ended 31 December 2023
Hedged items
Hedging
instruments
Hedge reserve
balance as at
1 January
Gain or loss of hedging
instruments within the year Hedge reserve
transferred
out during the
year
Income tax
impact
Hedge reserve
balance as at
31 DecemberEffective part
Ineffective
part
Expected hog sales
and purchase of
corn and
soybean meal /H1118/H1118
Futures 316,500.00 79,719,915.00 8,581,040.00 (48,274,195.00) – 31,762,220.00
Foreign currency
borrowings /H1118/H1118/H1118
Interest rate
swap and
foreign
exchange
forward
2,725,036.82 41,474,725.55 – (44,199,762.37) – –
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118 3,041,536.82 121,194,640.55 8,581,040.00 (92,473,957.37) – 31,762,220.00
APPENDIX I ACCOUNTANTS’ REPORT
– I-141 –


--- page 620 ---
Y ear ended 31 December 2024
Hedged items
Hedging
instruments
Hedge reserve
balance as at
1 January
Gain or loss of hedging
instruments within the year Hedge reserve
transferred
out during the
year
Income tax
impact
Hedge reserve
balance as at
31 DecemberEffective part
Ineffective
part
Expected hog sales
and purchase of
corn and
soybean meal /H1118/H1118
Futures 31,762,220.00 27,486,315.00 (13,586,560.00) (56,349,695.00) – 2,898,840.00
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118 31,762,220.00 27,486,315.00 (13,586,560.00) (56,349,695.00) – 2,898,840.00
Nine months ended 30 September 2025
Hedged items
Hedging
instruments
Hedge reserve
balance as at
1 January
Gain or loss of hedging
instruments within the period Hedge reserve
transferred
out during the
period
Income tax
impact
Hedge reserve
balance as at
30 SeptemberEffective part
Ineffective
part
Expected hog sales
and purchase of
corn and
soybean meal /H1118/H1118
Futures 2,898,840.00 3,463,940.00 (211,360.00) (5,819,340.00) – 543,440.00
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118 2,898,840.00 3,463,940.00 (211,360.00) (5,819,340.00) – 543,440.00
3 Transfer of financial assets
(1) By manner of transfer
As at 31 December 2022
Manner of transfer
Nature of financial
assets transferred
Amount of financial
assets transferred
Derecognised
(Y/N) Basis for derecognition
Bill endorsement or
discount /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Bank acceptance
bills
60,000,000.00 N Retained almost all of
its risk and reward
Bill endorsement or
discount /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Bank acceptance
bills
22,000,000.00 Y Almost all of its risk
and reward have
been transferred
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111882,000,000.00
As at 31 December 2023
Manner of transfer
Nature of financial
assets transferred
Amount of financial
assets transferred
Derecognised
(Y/N) Basis for derecognition
Bill endorsement or
discount /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Bank acceptance
bills
129,090,000.00 N Retained almost all of
its risk and reward
APPENDIX I ACCOUNTANTS’ REPORT
– I-142 –


--- page 621 ---
As at 31 December 2024
Manner of transfer
Nature of financial
assets transferred
Amount of financial
assets transferred
Derecognised
(Y/N) Basis for derecognition
Bill endorsement or
discount /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Bank acceptance
bills
152,900,000.00 N Retained almost all of
its risk and reward
Bill endorsement or
discount /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Bank acceptance
bills
60,442,935.00 Y Almost all of its risk
and reward have
been transferred
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118213,342,935.00
As at 30 September 2025
Manner of transfer
Nature of financial
assets transferred
Amount of financial
assets transferred
Derecognised
(Y/N) Basis for derecognition
Bill endorsement or
discount /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Bank acceptance
bills
206,690,000.00 N Retained almost all of
its risk and reward
Bill endorsement or
discount /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Bank acceptance
bills
456,881,534.65 Y Almost all of its risk
and reward have
been transferred
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118663,571,534.65
(2) Financial assets derecognised due to transfer
As at 31 December 2022, the financial assets derecognised due to transfer of the Group are as follows:
Item Manner of transfer Amount derecognised
Gain or loss related to
derecognition
Bills receivable /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Bill endorsement
or discount
22,000,000.00 –
As at 31 December 2023, there were no financial assets derecognised due to transfer of the Group.
As at 31 December 2024, the financial assets derecognised due to transfer of the Group were as follows:
Item Manner of transfer Amount derecognised
Gain or loss related to
derecognition
Bills receivable /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Bill endorsement
or discount
60,442,935.00 –
As at 30 September 2025, the financial assets derecognised due to transfer of the Group were as follows:
Item Manner of transfer Amount derecognised
Gain or loss related to
derecognition
Bills receivable /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Bill endorsement
or discount
456,881,534.65 –
APPENDIX I ACCOUNTANTS’ REPORT
– I-143 –


--- page 622 ---
IX. FAIR V ALUE DISCLOSURE
The following table presents the fair value information and fair value hierarchy, at the end of each reporting
period, of the Group’s assets and liabilities which are measured at fair value at each balance sheet date on a recurring
or non-recurring basis. The level at which fair value measurement is categorised is determined by the lowest level
input in the fair value hierarchy that is significant to the entire fair value measurement. The levels are defined as
follows:
Level 1 inputs: unadjusted quoted prices in active markets that are observable at the measurement date for identical
assets or liabilities;
Level 2 inputs: inputs other than Level 1 inputs that are either directly or indirectly observable for underlying assets
or liabilities;
Level 3 inputs: inputs that are unobservable for underlying assets or liabilities.
1 Fair value of assets and liabilities measured at fair value at the end of each reporting period
Note
As at 31 December 2022
Level 1
fair value
measurement
Level 2
fair value
measurement
Level 3
fair value
measurement Total
Recurring fair value
measurements
Financial assets held
for trading /H1118/H1118/H1118/H1118/H1118/H1118/H1118IV .2 316,500.00 2,725,036.82 – 3,041,536.82
Investments in other
equity instruments /H1118/H1118IV .10 – – 143,000,000.00 143,000,000.00
Total assets measured at
fair value on a
recurring basis /H1118/H1118/H1118/H1118/H1118/H1118316,500.00 2,725,036.82 143,000,000.00 146,041,536.82
Note
As at 31 December 2023
Level 1
fair value
measurement
Level 2
fair value
measurement
Level 3
fair value
measurement Total
Recurring fair value
measurements
Financial assets held
for trading /H1118/H1118/H1118/H1118/H1118/H1118/H1118IV .2 21,184,000.00 – – 21,184,000.00
Investments in other
equity instruments /H1118/H1118IV .10 – – 106,524,594.25 106,524,594.25
Total assets measured at
fair value on a
recurring basis /H1118/H1118/H1118/H1118/H1118/H111821,184,000.00 – 106,524,594.25 127,708,594.25
APPENDIX I ACCOUNTANTS’ REPORT
– I-144 –


--- page 623 ---
Note
As at 31 December 2024
Level 1
fair value
measurement
Level 2
fair value
measurement
Level 3
fair value
measurement Total
Recurring fair value
measurements
Financial assets held
for trading /H1118/H1118/H1118/H1118/H1118/H1118/H1118IV .2 2,886,840.00 – – 2,886,840.00
Investments in other
equity instruments /H1118/H1118IV .10 – – 106,524,594.25 106,524,594.25
Total assets measured at
fair value on a
recurring basis /H1118/H1118/H1118/H1118/H1118/H11182,886,840.00 – 106,524,594.25 109,411,434.25
Note
As at 30 September 2025
Level 1 fair value
measurement
Level 2 fair value
measurement
Level 3 fair value
measurement Total
Recurring fair value
measurements
Financial assets held for
trading /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118IV .2 1,885,816.33 – 2,206,410,328.32 2,208,296,144.65
Investments in other equity
instruments /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118IV .10 – – 88,732,025.63 88,732,025.63
Total assets measured at fair
value on a recurring basis /H1118 1,885,816.33 – 2,295,142,353.95 2,297,028,170.28
Financial liabilities held
for trading /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118694,260.00 – – 694,260.00
Total liabilities measured at
fair value on a recurring
basis /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118694,260.00 – – 694,260.00
2 Basis for determining the market price for recurring and non-recurring fair value measurement
categorised within Level 1
As at 31 December 2022, 2023 and 2024 and 30 September 2025, the Group’s financial instruments measured
at fair value on a recurring basis categorised within Level 1 are futures contracts under financial instruments at
FVTPL, the fair value of which is determined based on public quotation in futures market.
3 Valuation techniques used and the qualitative and quantitative information of key parameters for
recurring and non-recurring fair value measurements categorised within Level 2
As at 31 December 2022, the Group’s financial assets measured at fair value on a recurring basis categorised
within Level 2 are foreign exchange forward contracts and interest rate swap contracts, the fair value of which is
determined based on discounting the difference between the exercise price of foreign exchange forward contracts or
interest rate swap contracts and the market forward price or market interest rate.
As at 31 December 2023 and 2024 and 30 September 2025, the Group has no financial assets measured at fair
value on a recurring basis categorised within Level 2.
APPENDIX I ACCOUNTANTS’ REPORT
– I-145 –


--- page 624 ---
4 Valuation techniques used and the qualitative and quantitative information of key parameters for
recurring and non-recurring fair value measurements categorised within Level 3
As at 31 December 2022, 2023 and 2024 and 30 September 2025, the Group’s investments in other equity
instruments measured at fair value on a recurring basis categorised within Level 3 are investments in an unlisted
entity. There is no significant change in the operating environment, operating condition and financial position of the
invested enterprise, therefore the fair value is based on market multiples derived from quoted prices of companies
comparable to the investee, adjusted for the effect of the non-marketability of the equity securities and prices to the
book value of the investee.
The significant unobservable input used in the fair value measurement is market multiples of the comparable
transactions on the open market. As at 31 December 2022, 2023 and 2024 and 30 September 2025, it is estimated
that with all other variables held constant, an increase/decrease in market multiple by 5% would have
increased/decreased the Group’s other comprehensive income by RMB5,558,358.74, RMB5,326,229.71,
RMB4,846,211.09 and RMB4,353,543.05, respectively.
As at 30 September 2025, the Group’s financial assets held for trading measured at fair value on a recurring
basis categorised within Level 3 are bank wealth management products held by the Group. The Group predicts future
cash flows of these bank wealth management products based on the expected rate of return, and the significant
unobservable input used is the expected rate of return. As at 30 September 2025, it is estimated that with all other
variables held constant, an increased/decreased in the expected rate of return by 5% would have increased/decreased
the Group’s net profit by RMB320,516.42.
5 Reasons for transfers of recurring fair value measurements between different levels, and the policy
regarding the timing of those transfers
During the Track Record Period, none of the Group’s above assets and liabilities which are measured at fair
value on a recurring basis were transferred between different levels.
6 Reconciliation between the opening and closing balances of the assets and liabilities that measured at
recurring Level 3 fair value measurement
As at
1 January
2022 and
31 December
2022
Total losses for
the year
included in
other
comprehensive
income
As at
31 December
2023 and 2024
Additions
during the
period
Total income/(losses)
for the period
As at
30 September
2025
included in
gains from
changes in
fair value
included in
other
comprehensive
income
Assets
Financial assets held
for trading /H1118/H1118/H1118/H1118/H1118 – – – 2,200,000,000.00 6,410,328.32 – 2,206,410,328.32
Investments in other
equity instruments /H1118143,000,000.00 (36,475,405.75) 106,524,594.25 – – (17,792,568.62) 88,732,025.63
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118143,000,000.00 (36,475,405.75) 106,524,594.25 2,200,000,000.00 6,410,328.32 (17,792,568.62) 2,295,142,353.95
7 Current changes in valuation techniques and the reasons for the changes
During the Track Record Period, there were no changes in valuation techniques for the recurring and
non-recurring fair value measurements.
8 Fair values of financial assets and liabilities not measured at fair value
As at 31 December 2022, 2023 and 2024 and 30 September 2025, all financial assets and financial liabilities
of the Group are carried at amounts not materially different from their fair value.
APPENDIX I ACCOUNTANTS’ REPORT
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X. RELATED PARTIES AND RELATED-PARTY TRANSACTIONS
1 Immediate and ultimate controlling party
The directors of the Company consider the immediate holding party of the Company as at 31 December 2022,
2023 and 2024 and 30 September 2025 was Muyuan Group.
The ultimate controlling party is Mr. Qin Yinglin and his spouse Ms. Qian Ying. Mr. Qin Yinglin and Muyuan
Group entered into a voting rights entrustment agreement and its supplementary agreement.
2 Information about the major subsidiaries of the Company
For information about the major subsidiaries of the Company, refer to Note VI.1.
3 Information about associates of the Company
For information about the associates of the Company, refer to Note VI.3. Associates that have related-party
transactions with the Group during the Track Record Period are as follows:
Name of entity Relationship with the Company
Zhongmu Muyuan (Henan) Biological Pharmaceutical
Co., Ltd. /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Associate of the Group
Henan Lianmu V eterinary Medicine Co., Ltd. /H1118/H1118/H1118/H1118/H1118/H1118/H1118Associate of the Group
Nanyang Longyuan New Energy Technology
Co., Ltd. and its subsidiaries /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Associate of the Group
Guangdong Guangken Muyuan Livestock Husbandry
Co., Ltd. /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Associate of the Group
Henan Longda Muyuan Meat Co., Ltd. /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Associate of the Group
Rongtong Nongfa Muyuan (Jianyang) Co., Ltd. /H1118/H1118/H1118/H1118/H1118/H1118Associate of the Group
Rongtong Nongfa Muyuan (Chongzhou)
Co., Ltd. /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Associate of the Group
Rongtong Nongfa Muyuan (Tangshan) Livestock
Husbandry Co., Ltd. /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Associate of the Group
Henan Qianmu Biological Pharmaceutical Co., Ltd. /H1118/H1118/H1118Associate of the Group
Fangcheng Y ushengyuan Livestock Husbandry Co., Ltd /H1118Associate of the Group
4 Information on other related parties
Name of other related parties Related-party relationship
Henan Juai Digital Technology Co., Ltd. /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Entity under control of Muyuan Group
Henan Juai Travel Agency Co., Ltd. /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Entity under control of Muyuan Group
Henan Juai Automobile Sales Service Co., Ltd. /H1118/H1118/H1118/H1118/H1118/H1118Entity under control of Muyuan Group
Fangcheng Juai Digital Technology Co., Ltd. /H1118/H1118/H1118/H1118/H1118/H1118/H1118Entity under control of Muyuan Group
Zhengzhou Juai Digital Technology Co., Ltd. /H1118/H1118/H1118/H1118/H1118/H1118/H1118Entity under control of Muyuan Group
Henan Muyuan Construction Engineering Co., Ltd. /H1118/H1118/H1118Entity under control of Muyuan Group
Henan Muyuan Logistics Co., Ltd. /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Entity under control of Muyuan Group
Fangcheng Muyuan Logistics Co., Ltd. /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Entity under control of Muyuan Group
Henan Shengda Special V ehicle Co., Ltd. /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Entity under control of Muyuan Group
Cnex Fire V ehicle Manufacturing Co., Ltd. /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Entity under control of Muyuan Group
Henan Muyuan Smart Logistics Park Co., Ltd. /H1118/H1118/H1118/H1118/H1118/H1118Entity under control of Muyuan Group
Henan Zhongyou Muyuan Oil and Gas Co., Ltd. /H1118/H1118/H1118/H1118/H1118Entity under control of Muyuan Group
Henan Muyuan Equipment Co., Ltd. /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Entity under control of Muyuan Group
Henan Xinghua Instrument Equipment Co., Ltd. /H1118/H1118/H1118/H1118/H1118Entity under control of Muyuan Group
Henan Wanmu New Material Co., Ltd. /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Entity under control of Muyuan Group
Henan Shengda Development Co., Ltd. /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Entity under control of Muyuan Group
Xixia Shengshida Real Estate Co., Ltd. /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Entity under control of Muyuan Group
Nanyang Jinding Smart Equipment Co., Ltd. /H1118/H1118/H1118/H1118/H1118/H1118/H1118Entity under control of Muyuan Group
APPENDIX I ACCOUNTANTS’ REPORT
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--- page 626 ---
Name of other related parties Related-party relationship
Neixiang Shengwangda Real Estate Co., Ltd. /H1118/H1118/H1118/H1118/H1118/H1118/H1118Entity under control of Muyuan Group
Muyuan East District Construction Development
(Nanyang) Co., Ltd. /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Entity under control of Muyuan Group
Nanyang Jinsheng Smart Electrical Appliance Co., Ltd. /H1118Entity under control of Muyuan Group
Henan Qianhe Architectural Design Co., Ltd. /H1118/H1118/H1118/H1118/H1118/H1118/H1118Entity under control of Muyuan Group
Henan Muyuan Agricultural Development Co., Ltd. /H1118/H1118/H1118Entity under control of Muyuan Group
Xihua Muyuan Agricultural Development Co., Ltd. /H1118/H1118/H1118Entity under control of Muyuan Group
Caoxian Muyuan West Biotechnology Co., Ltd. /H1118/H1118/H1118/H1118/H1118/H1118Entity under control of Muyuan Group
Hubei Muyuan Agricultural Development Co., Ltd.
(Note) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Entity under control of Muyuan Group
Fugou Muyuan Agricultural Development Co., Ltd. /H1118/H1118/H1118Entity under control of Muyuan Group
Shanxi Muyuan Agricultural Development Co., Ltd. /H1118/H1118/H1118Entity under control of Muyuan Group
Shaanxi Muyuan West Biotechnology Co., Ltd. /H1118/H1118/H1118/H1118/H1118/H1118Entity under control of Muyuan Group
Anhui Muyuan West Biotechnology Co., Ltd. /H1118/H1118/H1118/H1118/H1118/H1118/H1118Entity under control of Muyuan Group
Henan Guoran Fengqing Fruit Industry Co., Ltd. /H1118/H1118/H1118/H1118/H1118Entity under control of Muyuan Group
Xixia County Zhengtie Tianrun Beverage Co., Ltd. /H1118/H1118/H1118Entity under control of Muyuan Group
Neixiang Zhongyi High Efficiency Agricultural
Technology Development Co., Ltd. /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Entity under control of Muyuan Group
Dengzhou Shengda Agricultural Development Co., Ltd. /H1118Entity under control of Muyuan Group
Henan Muyuan Property Management Co., Ltd. /H1118/H1118/H1118/H1118/H1118/H1118Entity under control of Muyuan Group
Henan Muyuan Hotel Co., Ltd. /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Entity under control of Muyuan Group
Neixiang County Shengduo Watershed Water Ecological
Environment Treatment Co., Ltd. /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Entity under control of Muyuan Group
Neixiang Weixin Business Information Service
Co., Ltd. (Note) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Entity under control of Muyuan Group
Mucai Optimum (Henan) Supply Chain Management
Co., Ltd. /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Entity under control of Muyuan Group
Neixiang Juai Food Material Sales Co., Ltd. /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Entity over which Muyuan Group has
significant influence
Nanyang Industry Investment Food Material Sales
Co., Ltd. /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Entity over which Muyuan Group has
significant influence
Henan Zhengtai Muyuan Smart Electrical Technology
Co., Ltd. /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Entity over which Muyuan Group has
significant influence
Ram Charan and entities controlled by him /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Other related party, Mr. Ram Charan served as
director of the Company
Henan Juaiyunchao Trading Co., Ltd. /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Entity under control of Muyuan Group
Henan Guigeng Agricultural Development Co., Ltd. /H1118/H1118/H1118Entity under control of Muyuan Group
Neixiang County Guoxing Construction Labor
Subcontracting Co., Ltd. /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Entity under control of Muyuan Group
Henan Juai Pharmacy Co., Ltd. /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Entity under control of Muyuan Group
Zhonghe Construction Engineering (Henan) Co., Ltd. /H1118/H1118Entity under control of Muyuan Group
Henan Binren Construction Engineering Co., Ltd. /H1118/H1118/H1118/H1118Entity under control of Muyuan Group
Henan Juai Construction Engineering Co., Ltd. /H1118/H1118/H1118/H1118/H1118/H1118Entity under control of Muyuan Group
Zhejiang Juneng Bao Oil Products Trading Co., Ltd. /H1118/H1118Entity under control of Muyuan Group
Xixia County Industry Investment Food Sales Co., Ltd. /H1118Entity over which Muyuan Group has
significant influence
Sheqi Wenxin Food Sales Co., Ltd. /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Entity over which Muyuan Group has
significant influence
Shenqiu County Chengtou Juai Food Sales Co., Ltd. /H1118/H1118Entity over which Muyuan Group has
significant influence
Shenqiu County Agricultural Investment Juai Food
Sales Co., Ltd. /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Entity over which Muyuan Group has
significant influence
Henan Zhongying Digital Technology Co., Ltd. /H1118/H1118/H1118/H1118/H1118/H1118Entity under control of Muyuan Group
Nanyang Wancheng District Industry Investment Food
Sales Co., Ltd. /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Entity over which Muyuan Group has
significant influence
APPENDIX I ACCOUNTANTS’ REPORT
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Name of other related parties Related-party relationship
Henan Miss Flour Co., Ltd. /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Other related party, entity in which Muyuan
Group holds indirect interests, and a director
of the Company served as a director of the
entity
Henan Neixiang Rural Commercial Bank Co., Ltd. /H1118/H1118/H1118/H1118Entity over which Muyuan Group has
significant influence
Nanyang Wolong Rural Credit Cooperative Association /H1118Other related party, the subsidiary of the
Company, Nanyang Wolong Muyuan
Breeding Co., Ltd. holds interests, director of
the Company serves as director of the entity
Henan Xixia Rural Commercial Bank Co., Ltd. /H1118/H1118/H1118/H1118/H1118/H1118Entity over which Muyuan Group has
significant influence
Henan Muyuan Agricultural Development Public
Welfare Foundation /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Other related party, Muyuan Group initiated the
establishment
West Lake University /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Other related party, the ultimate controlling
party of the Company serves as vice
chairman of the board of directors and the
honorary director
Nanyang West Lake Muyuan Synthetic Biology
Research Institute /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Other related party, Muyuan Group is one of
the organisers and one of the key
management personnel of the Company
serves as vise president
Henan Junengbao Energy Trading Co., Ltd. /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Entity under control of Muyuan Group
Nanyang High-tech Zone Juai Food Ingredients Sales
Co., Ltd. /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Entity under control of Muyuan Group
Fangcheng Production Investment Food Sales Co., Ltd. Entity over which Muyuan Group has
significant influence
Fengshengjia (Ningling County) Construction
Development Co., Ltd. /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Entity under control of Muyuan Group
Neixiang County Shengrongda Real Estate Co., Ltd. /H1118/H1118Entity under control of Muyuan Group
Fengshengjia (Nanyang) Construction Development
Co., Ltd. /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Entity under control of Muyuan Group
Henan Shengda Motor V ehicle Inspection Management
Co., Ltd. /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Entity under control of Muyuan Group
Xingfujia (Zhoukou) Construction Development
Co., Ltd. /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Entity under control of Muyuan Group
Henan Nan’o Construction Engineering Co., Ltd. /H1118/H1118/H1118/H1118Entity under control of Muyuan Group
Neihuang County Juai Digital Technology Co., Ltd. /H1118/H1118Entity under control of Muyuan Group
Fangcheng Muyuan Agricultural Development Co., Ltd. Entity under control of Muyuan Group
Neixiang Juai Catering Management Service Co., Ltd. /H1118Entity over which Muyuan Group has
significant influence
Henan Juaiwangfa Food Co., Ltd. /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Entity under control of Muyuan Group
Nanyang Wolong District Juai Digital Technology Co.,
Ltd. /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Entity under control of Muyuan Group
Henan Zefu Real Estate Development Co., Ltd. /H1118/H1118/H1118/H1118/H1118Entity under control of Muyuan Group
Zhoukou Juai Food Sales Co., Ltd. /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Entity under control of Muyuan Group
Nanyang Jinxiang Smart Equipment Co., Ltd. /H1118/H1118/H1118/H1118/H1118/H1118Entity under control of Muyuan Group
Notes:
Zhongxiang Muyuan Livestock Husbandry Co., Ltd. was renamed as Hubei Muyuan Agricultural Development
Co., Ltd. in May 2025.
Neixiang Weixin Asset Management Co., Ltd. was renamed as Neixiang Weixin Business Information Service
Co., Ltd. in August 2025.
APPENDIX I ACCOUNTANTS’ REPORT
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--- page 628 ---
5 Transactions with related parties
(1) Purchase of goods/receiving of services (excluding remuneration of key management personnel)
Name of related party Nature of transaction
Y ear ended 31 December
Nine months ended
30 September
2022 2023 2024 2024 2025
(unaudited)
Henan Muyuan Construction
Engineering Co., Ltd. and its
subsidiaries /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Receive construction
engineering services and
purchase equipment and
materials
2,848,654,336.90 2,329,350,236.22 1,246,388,196.38 732,344,241.07 2,339,378,972.98
Henan Lianmu V eterinary
Medicine Co., Ltd. /H1118/H1118/H1118/H1118/H1118/H1118
V eterinary medicine and other
materials
– – 242,987,687.68 109,640,645.68 363,834,467.67
Henan Muyuan Equipment
Co., Ltd. /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Procurement of engineering,
mechanical equipment and
materials, installation and
maintenance, etc
255,807,278.97 369,218,749.85 378,498,733.35 263,833,208.84 301,209,022.32
Henan Muyuan Logistics
Co., Ltd. and its subsidiaries /H1118
Receive transportation services 565,053,734.01 341,661,385.26 380,969,452.53 299,739,901.75 292,727,301.38
Zhejiang Juneng Bao Oil Products
Trading Co., Ltd. /H1118/H1118/H1118/H1118/H1118/H1118/H1118
Purchase of refined oil,
liquefied natural gas,
petrochemical products, etc
–––– 225,532,269.97
Henan Juai Digital Technology
Co., Ltd. and its subsidiaries /H1118/H1118
Purchase goods 424,588,660.73 238,102,090.57 201,292,695.83 174,227,428.77 176,373,346.94
Muyuan Group and its
subsidiaries, joint ventures and
associates /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Purchase of drinks, agricultural
products, agricultural and
sideline products, organic
fertilizers, etc
32,016,297.30 34,008,924.76 132,875,223.85 62,105,503.16 107,802,542.10
Henan Shengda Special V ehicle
Co., Ltd. /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Purchase of vehicles and spare
parts, vehicle maintenance,
etc
– 21,946,476.37 87,506,406.33 30,001,737.30 75,314,777.92
Zhongmu Muyuan (Henan)
Biological Pharmaceutical
Co., Ltd. /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
V eterinary medicine and other
materials
– – 321,176,217.10 225,150,979.90 114,180,284.60
Henan Zhengtai Muyuan Smart
Electrical Technology Co., Ltd. /H1118
Procurement of engineering,
mechanical equipment
materials, installation,
maintenance, etc
– 52,408,164.19 34,589,602.10 16,499,605.39 57,985,099.73
Muyuan Group and its
subsidiaries, joint ventures and
associates /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Receive accommodation,
catering, conference,
property and other services
23,910,447.99 24,508,053.39 33,654,880.22 22,668,926.21 52,683,531.50
Henan Xinghua Instrument
Equipment Co., Ltd. /H1118/H1118/H1118/H1118/H1118
Purchase labor protection
appliances, equipment, etc
16,812,259.51 44,620,439.46 48,954,847.64 26,866,007.56 30,649,405.71
Nanyang Longyuan New Energy
Technology Co., Ltd. and its
subsidiaries /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Electricity, etc – 2,913,856.24 19,081,167.21 13,680,100.93 20,724,651.29
Henan Juai Digital Technology
Co., Ltd. and its subsidiaries /H1118/H1118
Receive platform and other
commercial services
2,592,674.04 6,761,475.27 1,191,480.40 827,390.64 –
Nanyang Jinding Smart
Equipment Co., Ltd /H1118/H1118/H1118/H1118/H1118/H1118
Procurement of engineering,
mechanical equipment
materials, installation,
maintenance, etc
–––– 12,293,507.60
Guangdong Guangken Muyuan
Livestock Husbandry
Co., Ltd. /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Purchase breeding hogs – – 32,876,611.55 26,463,647.55 1,430,300.00
Ram Charan and entities
controlled by him /H1118/H1118/H1118/H1118/H1118/H1118/H1118
Receive consulting services 522,799.89 675,507.66 2,764,989.78 2,192,150.74 1,010,307.73
APPENDIX I ACCOUNTANTS’ REPORT
– I-150 –


--- page 629 ---
Name of related party Nature of transaction
Y ear ended 31 December
Nine months ended
30 September
2022 2023 2024 2024 2025
(unaudited)
Cnex Fire V ehicle Manufacturing
Co., Ltd. /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Purchase of vehicles and spare
parts, vehicle maintenance,
etc
19,991,021.49 9,667,596.04 – – –
Henan Zhongyou Muyuan Oil and
Gas Co., Ltd. /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Purchase of refined oil,
petrochemical products, etc
– 15,893,140.22 30,781,396.89 30,572,596.89 –
Henan Miss Flour Co., Ltd. /H1118/H1118/H1118Purchase wheat, feed wheat
flour, inferior flour, bran,
etc
75,252.06 11,065.60 – – –
Henan Junengbao Energy Trading
Co., Ltd. /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Purchase of refined oil,
liquefied natural gas,
petrochemical products, etc
–––– 838,265.20
Fangcheng Y ushengyuan
Livestock Husbandry Co., Ltd. /H1118
Purchase hog –––– 1 1,135,987.77
(2) Sale of goods/rendering of services
Name of related party Nature of transaction
Y ear ended 31 December
Nine months ended
30 September
2022 2023 2024 2024 2025
(unaudited)
Henan Longda Muyuan Meat
Co., Ltd. /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Hog, pork products, etc 2,224,066,086.26 1,765,081,420.98 1,869,644,838.51 1,290,284,514.23 1,381,234,652.66
Muyuan Group and its
subsidiaries, joint ventures
and associates /H1118/H1118/H1118/H1118/H1118/H1118/H1118
Selling pork products, new
energy, etc
19,015,228.70 29,715,186.06 110,137,189.35 73,645,799.84 105,672,489.82
Guangdong Guangken Muyuan
Livestock Husbandry Co.,
Ltd. /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Raw materials, goods,
equipment and services
63,132,833.96 149,919,225.90 113,273,831.29 95,391,686.81 61,915,238.10
Fangcheng Y ushengyuan
Livestock Husbandry Co.,
Ltd. /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Raw materials, goods,
equipment and services
–––– 48,823,616.30
Rongtong Nongfa Muyuan
(Tangshan) Livestock
Husbandry Co., Ltd. /H1118/H1118/H1118/H1118/H1118
Raw materials, goods,
equipment and services
– – 25,431.54 – 41,240,951.22
Henan Qianmu Biological
Pharmaceutical Co., Ltd. /H1118/H1118/H1118
Pork products, etc –––– 14,841,390.94
Rongtong Nongfa Muyuan
(Chongzhou) Co., Ltd. /H1118/H1118/H1118/H1118
Raw materials, goods,
equipment and services
50,547,047.26 7,866,223.85 74,947.06 60,747.40 1,769,460.95
Rongtong Nongfa Muyuan
(Jianyang) Co., Ltd. /H1118/H1118/H1118/H1118/H1118
Raw materials, goods,
equipment and services
– 330,385.00 30,084,422.67 17,277,348.25 2,032,647.11
Muyuan Group and its
subsidiaries /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Selling pig manure, biogas
residue, wheat offal, etc
1,488,098.16 1,616,855.30 1,032,588.78 818,943.31 –
Muyuan Group and its
subsidiaries, joint ventures
and associates /H1118/H1118/H1118/H1118/H1118/H1118/H1118
Inspection and other services 53,122.66 4,882.10 705,331.49 13,201.30 270,764.95
Henan Lianmu V eterinary
Medicine Co., Ltd. /H1118/H1118/H1118/H1118/H1118
Pork products, etc –––– 35,587.15
Nanyang Longyuan New Energy
Technology Co., Ltd. and its
subsidiaries /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Technical service fee and
maintenance service fee
– 3,091,956.69 – – –
Henan Muyuan Construction
Engineering Co., Ltd. /H1118/H1118/H1118/H1118
Equipment and materials – 592,277.91 – – –
APPENDIX I ACCOUNTANTS’ REPORT
– I-151 –


--- page 630 ---
(3) Leases
(a) As the lessor:
Name of lessee Type of assets leased
Lease income recognised
for each year ended 31 December
Lease income recognised for
each nine months ended
30 September
2022 2023 2024 2024 2025
(unaudited)
Muyuan Group and its
subsidiaries /H1118/H1118/H1118/H1118/H1118/H1118
Buildings, equipment,
etc.
4,466,166.68 5,151,016.45 4,998,106.20 4,038,345.16 3,092,128.60
(b) As the lessee:
Name of lessor Type of assets leased
Y ear ended 31 December 2022
Rental expenses
for practical
expedient of
short-term
leases and
the leases of
low-value assets Rental payments
Assumed
interest expenses
from lease
liabilities
Increased right-
of-use assets
Muyuan Group and its
subsidiaries /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Buildings, equipment,
etc.
538,120.00 538,120.00 – –
Name of lessor Type of assets leased
Y ear ended 31 December 2023
Rental expenses
for practical
expedient of
short-term
leases and
the leases of
low-value assets Rental payments
Assumed
interest expenses
from lease
liabilities
Increased right-
of-use assets
Muyuan Group and its
subsidiaries /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Buildings, equipment,
etc.
965,049.84 2,315,049.84 5,081,012.75 209,568,654.68
Name of lessor Type of assets leased
Y ear ended 31 December 2024
Rental expenses
for practical
expedient of
short-term
leases and
the leases of
low-value assets Rental payments
Assumed
interest expenses
from lease
liabilities
Increased right-
of-use assets
Muyuan Group and its
subsidiaries /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Buildings, equipment,
etc.
1,143,757.30 26,543,757.30 9,752,835.83 –
Name of lessor Type of assets leased
Nine months ended 30 September 2025
Rental expenses
for practical
expedient of
short-term
leases and
the leases of
low-value assets Rental payments
Assumed
interest expenses
from lease
liabilities
Increased right-
of-use assets
Muyuan Group and its
subsidiaries /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Buildings, equipment,
etc.
1,046,000.77 20,846,000.77 7,090,173.53 –
APPENDIX I ACCOUNTANTS’ REPORT
– I-152 –


--- page 631 ---
Name of lessor Type of assets leased
Nine months ended 30 September 2024 (unaudited)
Rental expenses
for practical
expedient of
short-term
leases and
the leases of
low-value assets Rental payments
Assumed
interest expenses
from lease
liabilities
Increased right-
of-use assets
Muyuan Group and its
subsidiaries /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Buildings, equipment,
etc.
884,929.94 19,784,929.94 7,311,495.22 –
(4) Guarantee
The Group as Guarantor
During the years ended 31 December 2022 and 2023, the Group did not provide any guarantee to related
parties. During the year ended 31 December 2024 and the nine months ended 30 September 2024 and 2025,
the guaranteed loans, which the Group acts as guarantor, with an amount of RMB32,640,000.00,
RMB8,840,000.00 (unaudited) and RMB32,276,800.00, respectively, have been fully settled.
As at 31 December 2024, the Group acts as the guarantor for the following outstanding loans:
Guarantee holder
Amount of
guarantee
Inception date of
guarantee
Maturity date of
guarantee
Guarantee
expired
(Y/N)
Zhongmu Muyuan (Henan)
Biological Pharmaceutical
Co., Ltd. /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
52,486,710.43 1 February 2024 21 October 2026 N
Guangdong Guangken
Muyuan Livestock
Husbandry Co., Ltd. /H1118/H1118/H1118/H1118
31,960,000.00 18 March 2024 18 October 2025 N
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111884,446,710.43
As at 30 September 2025, the Group acts as the guarantor for the following outstanding loans:
Guarantee holder
Amount of
guarantee
Inception date of
guarantee
Maturity date of
guarantee
Guarantee
expired
(Y/N)
Zhongmu Muyuan (Henan)
Biological Pharmaceutical
Co., Ltd. /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
52,322,864.84 1 February 2024 25 March 2028 N
Guangdong Guangken
Muyuan Livestock
Husbandry Co., Ltd. /H1118/H1118/H1118/H1118
29,240,000.00 18 October 2024 18 October 2025 N
Rongtong Nongfa Muyuan
(Chongzhou) Co., Ltd. /H1118/H1118
24,500,000.00 12 May 2025 11 May 2028 N
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118106,062,864.84
APPENDIX I ACCOUNTANTS’ REPORT
– I-153 –


--- page 632 ---
The Group as guarantee
Guarantee on loans:
During the years ended 31 December 2022, 2023 and 2024 and the nine months ended 30 September
2024 and 2025, the guaranteed loans that have been fully settled were RMB19,322,797,646.04,
RMB23,743,756,571.27, RMB33,906,351,069.02, RMB27,405,535,175.56 ( unaudited ) and
RMB25,334,493,652.21, respectively. As at 31 December 2022, 2023 and 2024 and 30 September 2025, the
outstanding guaranteed loans were RMB19,908,691,648.48, RMB32,974,145,009.42, RMB31,860,563,728.98,
and RMB32,887,612,987.43, respectively, as follows:
As at 31 December 2022:
Name of guarantor Guarantee holder
Amount of
guarantee
Inception date of
guarantee
Maturity date of
guarantee
Guarantee
expired
(Y/N)
Henan Muyuan
Construction
Engineering
Co., Ltd. /H1118/H1118/H1118/H1118
The Company and its
subsidiaries
497,000,000.00 25 March 2020 23 March 2027 N
Muyuan Group /H1118/H1118The Company and its
subsidiaries
1,034,183,253.98 16 December 2019 15 September 2030 N
Qin Yinglin /H1118/H1118/H1118/H1118The Company and its
subsidiaries
2,041,052,508.95 19 March 2020 28 July 2025 N
Qin Yinglin, Qian
Ying /H1118/H1118/H1118/H1118/H1118/H1118
The Company and its
subsidiaries
11,931,155,682.92 20 December 2019 28 November 2029 N
Qin Yinglin, Qian
Ying, Muyuan
Group /H1118/H1118/H1118/H1118/H1118/H1118
The Company and its
subsidiaries
4,405,300,202.63 30 September 2020 15 August 2027 N
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118 19,908,691,648.48
As at 31 December 2023:
Name of guarantor Guarantee holder
Amount of
guarantee
Inception date of
guarantee
Maturity date of
guarantee
Guarantee
expired
(Y/N)
Henan Muyuan
Construction
Engineering
Co., Ltd. /H1118/H1118/H1118/H1118
The Company and its
subsidiaries
326,000,000.00 25 March 2020 23 March 2027 N
Muyuan Group /H1118/H1118The Company and its
subsidiaries
1,026,675,897.60 8 August 2022 23 November 2033 N
Qin Yinglin /H1118/H1118/H1118/H1118The Company and its
subsidiaries
4,062,413,218.44 29 July 2022 16 January 2026 N
Qin Yinglin, Qian
Ying /H1118/H1118/H1118/H1118/H1118/H1118
The Company and its
subsidiaries
21,689,665,669.14 20 December 2019 28 November 2029 N
Qin Yinglin, Qian
Ying, Muyuan
Group /H1118/H1118/H1118/H1118/H1118/H1118
The Company and its
subsidiaries
5,869,390,224.24 30 September 2020 15 August 2027 N
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118 32,974,145,009.42
APPENDIX I ACCOUNTANTS’ REPORT
– I-154 –


--- page 633 ---
As at 31 December 2024:
Name of guarantor Guarantee holder
Amount of
guarantee
Inception date of
guarantee
Maturity date of
guarantee
Guarantee
expired
(Y/N)
Qin Yinglin, Qian
Ying /H1118/H1118/H1118/H1118/H1118/H1118
The Company and its
subsidiaries
20,360,618,541.69 3 December 2021 28 November 2029 N
Qin Yinglin, Qian
Ying, Muyuan
Group /H1118/H1118/H1118/H1118/H1118/H1118
The Company and its
subsidiaries
5,535,903,902.49 30 September 2020 15 August 2027 N
Qin Yinglin /H1118/H1118/H1118/H1118The Company and its
subsidiaries
4,884,642,981.12 29 July 2022 16 January 2026 N
Muyuan Group /H1118/H1118The Company and its
subsidiaries
829,648,303.68 8 August 2022 23 November 2033 N
Henan Muyuan
Construction
Engineering
Co., Ltd. /H1118/H1118/H1118/H1118
The Company and its
subsidiaries
249,750,000.00 25 March 2020 23 March 2027 N
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118 31,860,563,728.98
As at 30 September 2025:
Name of guarantor Guarantee holder
Amount of
guarantee
Inception date of
guarantee
Maturity date of
guarantee
Guarantee
expired
(Y/N)
Qin Yinglin, Qian
Ying /H1118/H1118/H1118/H1118/H1118/H1118
The Company and its
subsidiaries
23,759,112,165.15 31 October 2022 10 March 2028 N
Qin Yinglin, Qian
Ying, Muyuan
Group /H1118/H1118/H1118/H1118/H1118/H1118
The Company and its
subsidiaries
4,474,817,449.79 20 January 2025 9 June 2026 N
Qin Yinglin /H1118/H1118/H1118/H1118The Company and its
subsidiaries
4,416,848,170.76 17 January 2023 1 April 2026 N
Muyuan Group /H1118/H1118The Company and its
subsidiaries
30,585,201.73 8 August 2022 23 November 2033 N
Henan Muyuan
Construction
Engineering
Co., Ltd. /H1118/H1118/H1118/H1118
The Company and its
subsidiaries
206,250,000.00 25 March 2020 23 March 2027 N
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118 32,887,612,987.43
APPENDIX I ACCOUNTANTS’ REPORT
– I-155 –


--- page 634 ---
Guarantee on bills:
During the years ended 31 December 2022, 2023 and 2024 and the nine months ended 30 September 2024
and 2025, the bill guarantees that have been fulfilled were RMB3,073,790,951.52, RMB3,281,080,928.87,
RMB4,626,740,000.00, RMB3,149,190,000.00 (unaudited) and RMB3,929,900,000.00, respectively. As at
31 December 2022, 2023 and 2024 and 30 September 2025, the outstanding bill guarantees were
RMB2,695,047,577.75, RMB1,304,290,000.00, RMB3,269,900,000.00 and RMB4,193,600,000.00, respectively,
as follows:
As at 31 December 2022:
Name of guarantor Guarantee holder
Amount of
guarantee
Inception date
of guarantee
Maturity date of
guarantee
Guarantee
expired
(Y/N)
The Company, Qin Yinglin /H1118/H1118Guangdong Zhanjiang
Leizhou Muyuan
Livestock Husbandry
Co., Ltd.
100,000,000.00 21 October
2022
21 April 2023 N
The Company, Qin Yinglin,
Qian Ying /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Qingdao Jimo Muyuan
Livestock Husbandry
Co., Ltd.
21,268,745.27 27 September
2022
13 October
2023
N
The Company, Qin Yinglin,
Qian Ying /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Inner Mongolia
Kezuozhong Banner
Muyuan Modern
Livestock Husbandry
Co., Ltd.
40,000,000.00 26 May 2022 26 May 2023 N
Qin Yinglin, Qian Ying /H1118/H1118/H1118/H1118The Company 657,622,629.60 21 September
2022
29 June 2023 N
The Company, Qin Yinglin,
Qian Ying /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Wenxi Muyuan
Livestock Husbandry
Co., Ltd.
40,000,000.00 20 January
2022
2 March 2023 N
The Company, Qin Yinglin,
Qian Ying /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Shanxi Xiaxian
Muyuan Livestock
Husbandry Co., Ltd.
20,000,000.00 7 March 2022 1 March 2023 N
The Company, Qin Yinglin,
Qian Ying /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Xinjiang Muyuan
Livestock Husbandry
Co., Ltd.
30,000,000.00 26 May 2022 26 May 2023 N
The Company, Qin Yinglin,
Qian Ying /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Shanxi Y uanping
Muyuan Livestock
Husbandry Co., Ltd.
50,000,000.00 30 May 2022 30 May 2023 N
The Company, Qin Yinglin,
Qian Ying /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Shanxi Daixian
Muyuan Livestock
Husbandry Co., Ltd.
50,000,000.00 1 June 2022 27 May 2023 N
The Company, Qin Yinglin,
Qian Ying /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Shanxi Fanshi Muyuan
Livestock Husbandry
Co., Ltd.
50,000,000.00 1 June 2022 27 May 2023 N
The Company, Qin Yinglin,
Qian Ying /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Wanrong Muyuan
Livestock Husbandry
Co., Ltd.
40,000,000.00 7 December
2022
7 December
2023
N
The Company, Qin Yinglin,
Qian Ying /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Shanxi Y ongji Muyuan
Livestock Husbandry
Co., Ltd.
100,000,000.00 16 December
2022
16 December
2023
N
Henan Muyuan Construction
Engineering Co., Ltd. /H1118/H1118/H1118/H1118
Muyuan Meat Co., Ltd. 500,000,000.00 28 May 2022 28 May 2023 N
Muyuan Group /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118The Company 164,162,797.24 7 July 2022 3 June 2023 N
The Company, Qin Yinglin,
Qian Ying /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Laohekou Muyuan
Livestock Husbandry
Co., Ltd.
29,965,176.94 21 July 2022 23 April 2023 N
APPENDIX I ACCOUNTANTS’ REPORT
– I-156 –


--- page 635 ---
Name of guarantor Guarantee holder
Amount of
guarantee
Inception date
of guarantee
Maturity date of
guarantee
Guarantee
expired
(Y/N)
Qin Yinglin /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118The Company 700,000,000.00 24 October
2022
3 July 2023 N
Qin Yinglin, Qian Ying /H1118/H1118/H1118/H1118Anhui Suixi Muyuan
Livestock Husbandry
Co., Ltd.
100,000,000.00 24 December
2022
23 December
2023
N
The Company, Qin Yinglin,
Qian Ying /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Muyuan Meat
Co., Ltd.
2,028,228.70 31 March 2022 6 April 2023 N
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,695,047,577.75
As at 31 December 2023:
Name of guarantor Guarantee holder
Amount of
guarantee
Inception date
of guarantee
Maturity date of
guarantee
Guarantee
expired
(Y/N)
Qin Yinglin, Qian Ying /H1118/H1118/H1118/H1118The Company 546,200,000.00 1 November
2023
26 April 2024 N
Neixiang Zhongyi High
Efficiency Agricultural
Technology Development
Co., Ltd. /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
The Company 400,000,000.00 12 December
2023
12 June 2024 N
Qin Yinglin, Qian Ying /H1118/H1118/H1118/H1118Shanxi Fanshi Muyuan
Livestock Husbandry
Co., Ltd.
69,400,000.00 28 April 2023 26 April 2024 N
Qin Yinglin, Qian Ying /H1118/H1118/H1118/H1118Shanxi Y uanping
Muyuan Livestock
Husbandry
Co., Ltd.
69,400,000.00 4 May 2023 30 April 2024 N
Qin Yinglin, Qian Ying /H1118/H1118/H1118/H1118Shanxi Daixian
Muyuan Livestock
Husbandry
Co., Ltd.
66,190,000.00 5 May 2023 10 May 2024 N
Qin Yinglin, Qian Ying /H1118/H1118/H1118/H1118Inner Mongolia Kailu
Muyuan Livestock
Husbandry
Co., Ltd.
60,000,000.00 19 September
2023
18 March 2024 N
Qin Yinglin, Qian Ying /H1118/H1118/H1118/H1118Xinjiang Muyuan
Livestock Husbandry
Co., Ltd.
41,600,000.00 28 April 2023 26 April 2024 N
Qin Yinglin, Qian Ying /H1118/H1118/H1118/H1118Shanxi Xiaxian
Muyuan Livestock
Husbandry
Co., Ltd.
41,500,000.00 5 May 2023 5 May 2024 N
Qin Yinglin, Qian Ying /H1118/H1118/H1118/H1118Hubei Zhongxiang
Muyuan Breeding
Co., Ltd.
10,000,000.00 30 June 2023 19 June 2024 N
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,304,290,000.00
APPENDIX I ACCOUNTANTS’ REPORT
– I-157 –


--- page 636 ---
As at 31 December 2024:
Name of guarantor Guarantee holder
Amount of
guarantee
Inception date
of guarantee
Maturity date of
guarantee
Guarantee
expired
(Y/N)
Qin Yinglin, Qian Ying /H1118/H1118/H1118The Company 1,200,000,000.00 31 December
2024
1 July 2025 N
Muyuan Group, Qin
Yinglin, Qian Ying /H1118/H1118/H1118/H1118
The Company 625,000,000.00 30 July 2024 27 January 2025 N
Muyuan Group, Qin
Yinglin, Qian Ying /H1118/H1118/H1118/H1118
The Company 500,000,000.00 20 December
2024
15 December
2025
N
Qin Yinglin, Qian Ying /H1118/H1118/H1118The Company 400,000,000.00 23 September
2024
23 September
2025
N
Qin Yinglin, Qian Ying /H1118/H1118/H1118The Company 444,900,000.00 24 July 2024 23 January 2025 N
Qin Yinglin, Qian Ying /H1118/H1118/H1118Muyuan Meat
Co., Ltd.
100,000,000.00 22 March 2024 17 March 2025 N
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,269,900,000.00
As at 30 September 2025:
Name of guarantor
Guarantee
holder
Amount of
guarantee
Inception date
of guarantee
Maturity date of
guarantee
Guarantee
expired
(Y/N)
Qin Yinglin /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118The Company 255,000,000.00 19 May 2025 19 November
2025
N
Qin Yinglin /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118The Company 270,000,000.00 23 September
2025
30 March 2026 N
Qin Yinglin, Qian Ying /H1118/H1118/H1118/H1118/H1118/H1118/H1118The Company 310,000,000.00 31 March 2025 17 October 2025 N
Qin Yinglin, Qian Ying /H1118/H1118/H1118/H1118/H1118/H1118/H1118The Company 303,600,000.00 18 June 2025 18 December
2025
N
Qin Yinglin, Qian Ying /H1118/H1118/H1118/H1118/H1118/H1118/H1118The Company 200,000,000.00 20 June 2025 20 December
2025
N
Qin Yinglin, Qian Ying /H1118/H1118/H1118/H1118/H1118/H1118/H1118The Company 120,000,000.00 19 August 2025 19 February 2026 N
Qin Yinglin, Qian Ying /H1118/H1118/H1118/H1118/H1118/H1118/H1118The Company 700,000,000.00 26 February 2025 21 February 2026 N
Qin Yinglin, Qian Ying /H1118/H1118/H1118/H1118/H1118/H1118/H1118The Company 300,000,000.00 24 March 2025 20 March 2026 N
Qin Yinglin, Qian Ying /H1118/H1118/H1118/H1118/H1118/H1118/H1118The Company 500,000,000.00 17 June 2025 17 June 2026 N
Qin Yinglin, Qian Ying /H1118/H1118/H1118/H1118/H1118/H1118/H1118The Company 169,000,000.00 11 September
2025
11 March 2026 N
Qin Yinglin, Qian Ying, Muyuan
Group /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
The Company 500,000,000.00 20 September
2024
15 September
2025
N
Qin Yinglin, Qian Ying, Muyuan
Group /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
The Company 566,000,000.00 1 January 2025 1 January 2026 N
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184,193,600,000.00
The guarantees provided by related parties will not be released on or before listing.
APPENDIX I ACCOUNTANTS’ REPORT
– I-158 –


--- page 637 ---
(5) Borrowings from/to related parties
Borrowings from
related parties
Y ear ended 31 December Nine months ended 30 September
2022 2023 2024 2024 2025
(unaudited)
As at 1 January /H1118/H1118/H1118/H11185,000,000,000.00 1,000,000,000.00 1,900,000,000.00 1,900,000,000.00 –
Proceeds /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111814,948,000,000.00 5,900,000,000.00 4,470,000,000.00 4,470,000,000.00 855,990,650.00
Repayment /H1118/H1118/H1118/H1118/H1118/H1118/H1118(18,948,000,000.00) (5,000,000,000.00) (6,370,000,000.00) (5,750,000,000.00) (855,990,650.00)
As at 31 December/
30 September /H1118/H1118/H1118/H11181,000,000,000.00 1,900,000,000.00 – 620,000,000.00 –
During the Track Record Period, the Group has not lent out any borrowings to related parties.
(6) Remuneration of key management personnel
Y ear ended 31 December
Nine months ended
30 September
2022 2023 2024 2024 2025
(unaudited)
Remuneration of key
management personnel /H1118/H111842,345,637.98 29,020,303.52 25,904,256.46 11,883,243.38 30,272,347.59
(a) Directors’ or supervisors’ emoluments
Y ear ended 31 December 2022:
Directors’
fees
Salary,
allowances
and benefits
in kind
Retirement
scheme
contributions
Discretionary
bonuses Subtotal
Share-based
payments (v) Total
Executive directors:
Mr. Qin Yinglin /H1118/H1118/H1118/H1118 – 476,688.00 3,312.00 4,343,431.08 4,823,431.08 – 4,823,431.08
Ms. Qian Ying /H1118/H1118/H1118/H1118 –––––––
Mr. Cao Zhinian /H1118/H1118/H1118 – 376,688.00 3,312.00 1,807,737.50 2,187,737.50 2,228,709.38 4,416,446.88
Mr. Ram Charan /H1118/H1118/H1118 –––––––
Independent
non-executive
directors:
Mr. Y an Lei /H1118/H1118/H1118/H1118/H1118150,000.00 – – – 150,000.00 – 150,000.00
Mr. Feng Genfu /H1118/H1118/H1118/H1118150,000.00 – – – 150,000.00 – 150,000.00
Mr. Li Hongwei /H1118/H1118/H1118150,000.00 – – – 150,000.00 – 150,000.00
Supervisors:
M r .S uD a n g l i n/H1118/H1118/H1118/H1118 – 298,638.00 3,312.00 710,551.81 1,012,501.81 – 1,012,501.81
Mr. Li Fuqiang /H1118/H1118/H1118/H1118 – 191,688.00 3,312.00 – 195,000.00 – 195,000.00
Ms. Lu Xiangli /H1118/H1118/H1118/H1118 – 100,247.00 3,312.00 2,500.00 106,059.00 – 106,059.00
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118450,000.00 1,443,949.00 16,560.00 6,864,220.39 8,774,729.39 2,228,709.38 11,003,438.77
APPENDIX I ACCOUNTANTS’ REPORT
– I-159 –


--- page 638 ---
Y ear ended 31 December 2023:
Directors’
fees
Salary,
allowances
and benefits
in kind
Retirement
scheme
contributions
Discretionary
bonuses Subtotal
Share-based
payments (v) Total
Executive directors:
Mr. Qin Yinglin /H1118/H1118/H1118/H1118 – 555,072.00 4,128.00 1,790,800.00 2,350,000.00 – 2,350,000.00
Ms. Qian Ying /H1118/H1118/H1118/H1118 –––––––
Mr. Cao Zhinian /H1118/H1118/H1118 – 399,072.00 4,128.00 1,398,600.00 1,801,800.00 1,188,645.00 2,990,445.00
Mr. Ram Charan /H1118/H1118/H1118 –––––––
Independent
non-executive
directors:
Mr. Y an Lei /H1118/H1118/H1118/H1118/H1118150,000.00 – – – 150,000.00 – 150,000.00
Mr. Feng Genfu /H1118/H1118/H1118/H1118150,000.00 – – – 150,000.00 – 150,000.00
Mr. Li Hongwei (i) /H1118/H1118145,967.74 – – – 145,967.74 – 145,967.74
Mr. Chow Ming Sang
(ii) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184,032.2 6––– 4,032.26 – 4,032.26
Supervisors:
M r .S uD a n g l i n/H1118/H1118/H1118/H1118 – 284,872.00 4,128.00 503,500.00 792,500.00 – 792,500.00
Mr. Li Fuqiang /H1118/H1118/H1118/H1118 – 175,872.00 4,128.00 – 180,000.00 – 180,000.00
Ms. Lu Xiangli /H1118/H1118/H1118/H1118 – 102,949.00 3,888.00 2,500.00 109,337.00 – 109,337.00
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118450,000.00 1,517,837.00 20,400.00 3,695,400.00 5,683,637.00 1,188,645.00 6,872,282.00
Y ear ended 31 December 2024:
Directors’
fees
Salary,
allowances
and benefits
in kind
Retirement
scheme
contributions
Discretionary
bonuses Subtotal
Share-based
payments (v) Total
Executive directors:
Mr. Qin Yinglin /H1118/H1118/H1118/H1118 – 750,400.00 4,800.00 2,966,743.26 3,721,943.26 – 3,721,943.26
Ms. Qian Ying /H1118/H1118/H1118/H1118 –––––––
Mr. Cao Zhinian /H1118/H1118/H1118 – 614,400.00 4,800.00 1,483,371.63 2,102,571.63 148,580.63 2,251,152.26
Mr. Ram Charan (iii) /H1118 –––––––
Ms. Y ang Ruihua (iv) /H1118 – 487,200.00 2,800.00 1,483,371.63 1,973,371.63 – 1,973,371.63
Independent
non-executive
directors:
Mr. Chow Ming Sang 150,000.00 – – – 150,000.00 – 150,000.00
Mr. Y an Lei /H1118/H1118/H1118/H1118/H1118150,000.00 – – – 150,000.00 – 150,000.00
Mr. Feng Genfu /H1118/H1118/H1118/H1118150,000.00 – – – 150,000.00 – 150,000.00
Supervisors:
M r .S uD a n g l i n/H1118/H1118/H1118/H1118 – 489,400.00 4,800.00 370,842.91 865,042.91 – 865,042.91
Mr. Li Fuqiang /H1118/H1118/H1118/H1118 – 175,200.00 4,800.00 – 180,000.00 – 180,000.00
Ms. Lu Xiangli /H1118/H1118/H1118/H1118 – 99,262.20 4,080.00 – 103,342.20 – 103,342.20
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118450,000.00 2,615,862.20 26,080.00 6,304,329.43 9,396,271.63 148,580.63 9,544,852.26
APPENDIX I ACCOUNTANTS’ REPORT
– I-160 –


--- page 639 ---
Nine months ended 30 September 2025:
Directors’
fees
Salary,
allowances
and benefits
in kind
Retirement
scheme
contributions
Discretionary
bonuses Subtotal
Share-based
payments (v) Total
Executive directors:
Mr. Qin Yinglin /H1118/H1118/H1118/H1118 – 1,556,400.00 3,600.00 1,252,656.74 2,812,656.74 – 2,812,656.74
Ms. Qian Ying /H1118/H1118/H1118/H1118 –––––––
Mr. Cao Zhinian /H1118/H1118/H1118 – 1,076,400.00 3,600.00 940,394.82 2,020,394.82 291,715.00 2,312,109.82
Ms. Y ang Ruihua /H1118/H1118/H1118 – 1,106,400.00 3,600.00 3,086,770.42 4,196,770.42 413,233.72 4,610,004.14
Independent
non-executive
directors:
Mr. Chow Ming Sang /H1118 112,500.00 – – – 112,500.00 – 112,500.00
Mr. Y an Lei /H1118/H1118/H1118/H1118/H1118112,500.00 – – – 112,500.00 – 112,500.00
Mr. Feng Genfu /H1118/H1118/H1118/H1118112,500.00 – – – 112,500.00 – 112,500.00
Supervisors:
M r .S uD a n g l i n/H1118/H1118/H1118/H1118 – 446,400.00 3,600.00 164,532.14 614,532.14 – 614,532.14
Mr. Li Fuqiang /H1118/H1118/H1118/H1118 – 131,520.00 3,480.00 – 135,000.00 – 135,000.00
Ms. Lu Xiangli /H1118/H1118/H1118/H1118 – 74,496.00 2,904.00 – 77,400.00 – 77,400.00
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118337,500.00 4,391,616.00 20,784.00 5,444,354.12 10,194,254.12 704,948.72 10,899,202.84
Nine months ended 30 September 2024 (unaudited) :
Directors’
fees
Salary,
allowances
and benefits
in kind
Retirement
scheme
contributions
Discretionary
bonuses Subtotal
Share-based
payments (v) Total
Executive directors:
Mr. Qin Yinglin /H1118/H1118/H1118/H1118 – 541,600.00 3,600.00 954,799.00 1,499,999.00 – 1,499,999.00
Ms. Qian Ying /H1118/H1118/H1118/H1118 –––––––
Mr. Cao Zhinian /H1118/H1118/H1118 – 435,600.00 3,600.00 685,800.00 1,125,000.00 148,580.63 1,273,580.63
Mr. Ram Charan (iii) /H1118 –––––––
Ms. Y ang Ruihua (iv) /H1118 – 278,400.00 1,600.00 985,999.00 1,265,999.00 0.00 1,265,999.00
Independent
non-executive
directors:
Mr. Chow Ming Sang /H1118 112,500.00 – – – 112,500.00 – 112,500.00
Mr. Y an Lei /H1118/H1118/H1118/H1118/H1118112,500.00 – – – 112,500.00 – 112,500.00
Mr. Feng Genfu /H1118/H1118/H1118/H1118112,500.00 – – – 112,500.00 – 112,500.00
Supervisors:
M r .S uD a n g l i n/H1118/H1118/H1118/H1118 – 340,600.00 3,600.00 105,800.00 450,000.00 – 450,000.00
Mr. Li Fuqiang /H1118/H1118/H1118/H1118 – 118,400.00 3,600.00 – 122,000.00 – 122,000.00
Ms. Lu Xiangli /H1118/H1118/H1118/H1118 – 74,022.20 3,120.00 – 77,142.20 – 77,142.20
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118337,500.00 1,788,622.20 19,120.00 2,732,398.00 4,877,640.20 148,580.63 5,026,220.83
Notes:
(i) Mr. Li Hongwei resigned as an independent non-executive director of the Company on 21 December
2023.
(ii) Mr. Chow Ming Sang became an independent non-executive director of the Company since 21
December 2023.
APPENDIX I ACCOUNTANTS’ REPORT
– I-161 –


--- page 640 ---
(iii) Mr. Ram Charan resigned as a director of the Company on 9 May 2024.
(iv) Ms. Y ang Ruihua became an executive director of the Company since 22 May 2024. The remuneration
disclosed above represents the remuneration paid to her since her appointment as an executive director.
The total remuneration of Ms. Y ang Ruihua for the year ended 31 December 2024 was
RMB2,430,197.13, including share-based payments of RMB222,825.50.
(v) These represent the estimated value of restricted shares granted to the directors under the Company’s
restricted shares incentive scheme. The value of these restricted share is measured according to the
Group’s accounting policies for share-based payment transactions as set out in Note II.21. The details
of share-based payment, including the principal terms and number of restricted shares granted, are
disclosed in Note XI.
(vi) On 25 December 2025, the shareholders’ meeting of the Company approved the special resolution on
dissolving the Board of Supervisors.
During the Track Record Period, no director or supervisor has waived or agreed to waive any emoluments and
no emoluments was paid by the Group to the directors or supervisors as an inducement to join or upon joining the
Group or as compensation for loss of office.
(b) Individuals with highest emoluments
The numbers of directors, supervisors and other employees included in the five individuals with the highest
emoluments set out as follows:
Y ear ended 31 December Nine months ended 30 September
Item 2022 2023 2024 2024 2025
(unaudited)
Directors or
supervisors /H1118/H1118/H1118/H1118/H1118 11111
Other than directors
or supervisors /H1118/H1118/H1118 44444
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111855555
The aggregate of emoluments in respect of the five individuals with the highest emoluments other than
directors or supervisors are as follows:
Y ear ended 31 December Nine months ended 30 September
Item 2022 2023 2024 2024 2025
(unaudited)
Salary and other
emoluments /H1118/H1118/H1118/H11181,488,234.08 1,571,931.00 3,849,900.00 2,361,699.70 7,013,408.01
Retirement scheme
contributions /H1118/H1118/H111812,960.00 16,512.00 19,200.00 14,400.00 14,400.00
Discretionary
bonuses /H1118/H1118/H1118/H1118/H1118/H1118/H11188,575,541.38 7,789,557.00 10,694,866.31 3,248,897.30 4,396,454.86
Subtotal /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111810,076,735.46 9,378,000.00 14,563,966.31 5,624,997.00 11,424,262.87
Share-based
payments /H1118/H1118/H1118/H1118/H1118/H111811,365,736.25 6,061,726.00 445,741.88 588,784.58 1,686,374.20
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111821,442,471.71 15,439,726.00 15,009,708.19 6,213,781.58 13,110,637.07
APPENDIX I ACCOUNTANTS’ REPORT
– I-162 –


--- page 641 ---
The emoluments of the individuals with the highest emoluments other than directors or supervisors are within
the following bands:
Y ear ended 31 December Nine months ended 30 September
Item 2022 2023 2024 2024 2025
(unaudited)
HK$Nil —
HK$1,500,000 /H1118/H1118/H1118 –––1–
HK$1,500,001 —
HK$2,000,000 /H1118/H1118/H1118 –––3–
HK$2,500,001 —
HK$3,000,000 /H1118/H1118/H1118 ––1––
HK$3,000,001 —
HK$3,500,000 /H1118/H1118/H1118 ––––2
HK$3,500,001 —
HK$4,000,000 /H1118/H1118/H1118 –1––1
HK$4,000,001 —
HK$4,500,000 /H1118/H1118/H1118 –12–1
HK$4,500,001 —
HK$5,000,000 /H1118/H1118/H1118 –21––
HK$5,000,001 —
HK$5,500,000 /H1118/H1118/H1118 1––––
HK$6,000,001 —
HK$6,500,000 /H1118/H1118/H1118 1––––
HK$6,500,001 —
HK$7,000,000 /H1118/H1118/H1118 1––––
HK$7,000,001 —
HK$7,500,000 /H1118/H1118/H1118 1––––
APPENDIX I ACCOUNTANTS’ REPORT
– I-163 –


--- page 642 ---
(7) Other related-party transactions
Name of related party Nature of transaction
Y ear ended 31 December/As at 31 December
Nine months ended
30 September/
As at 30 September
2022 2023 2024 2024 2025
(unaudited)
Henan Neixiang Rural
Commercial Bank
Co., Ltd. /H1118/H1118/H1118/H1118/H1118/H1118
Interest income from
deposits
10,479,175.32 10,458,524.94 9,550,394.88 8,424,972.46 6,302,076.39
Nanyang Wolong Rural
Credit Cooperative
Association /H1118/H1118/H1118/H1118/H1118
Interest income from
deposits
224,424.09 221,303.81 268,782.67 196,577.83 145,493.07
Henan Xixia Rural
Commercial Bank
Co., Ltd. /H1118/H1118/H1118/H1118/H1118/H1118
Interest income from
deposits
328.71 614.0 6–––
Henan Neixiang Rural
Commercial Bank
Co., Ltd. /H1118/H1118/H1118/H1118/H1118/H1118
Settlement fees 111,065.96 72,337.98 253,020.62 252,975.63 2,508.39
Nanyang Wolong Rural
Credit Cooperative
Association /H1118/H1118/H1118/H1118/H1118
Settlement fees 13,470.10 8,949.50 511.86 510.84 9.18
Henan Xixia Rural
Commercial Bank
Co., Ltd. /H1118/H1118/H1118/H1118/H1118/H1118
Settlement fees 400.00 200.0 0–––
Henan Neixiang Rural
Commercial Bank
Co., Ltd. /H1118/H1118/H1118/H1118/H1118/H1118
Deposit balance 450,051,778.02 422,746,238.21 114,782,716.68 114,782,716.68 400,604,850.93
Nanyang Wolong Rural
Credit Cooperative
Association /H1118/H1118/H1118/H1118/H1118
Deposit balance 10,060,050.17 1,787,012.75 661,535.46 661,535.46 30,777,955.39
Henan Xixia Rural
Commercial Bank
Co., Ltd. /H1118/H1118/H1118/H1118/H1118/H1118
Deposit balance 2,323.6 5––––
West Lake University /H1118Donation provided – 60,000,000.00 60,000,000.00 60,000,000.00 –
Nanyang West Lake
Muyuan Synthetic
Biology Research
Institute /H1118/H1118/H1118/H1118/H1118/H1118/H1118
Donation provided – 40,000,000.00 40,000,000.00 40,000,000.00 –
Henan Muyuan
Agricultural
Development Public
Welfare Foundation /H1118
Donation provided 28,358,000.00 190,000.00 40,000,000.00 40,000,000.00 –
Mr. Qin Yinglin /H1118/H1118/H1118/H1118Donation received
(Note IV .37)
86,888,084.2 9––––
APPENDIX I ACCOUNTANTS’ REPORT
– I-164 –


--- page 643 ---
6 Unsettled items, including receivables from and payables to related parties
(1) Trade related: receivables from related parties
Item Related party
As at 31 December As at 30 September
2022 2023 2024 2025
Book value
Provision for
bad and
doubtful debts Book value
Provision for
bad and
doubtful debts Book value
Provision for
bad and
doubtful debts Book value
Provision for
bad and
doubtful debts
Accounts receivable /H1118/H1118/H1118/H1118Fangcheng Y ushengyuan
Livestock Husbandry Co.,
Ltd.
–––––– 26,962,694.32 1,348,134.72
Accounts receivable /H1118/H1118/H1118/H1118Guangdong Guangken Muyuan
Livestock Husbandry
Co., Ltd.
– – 22,719,135.10 1,135,956.76 883,023.63 44,151.18 7,648,747.24 382,437.36
Accounts receivable /H1118/H1118/H1118/H1118Rongtong Nongfa Muyuan
(Tangshan) Livestock
Husbandry Co., Ltd.
–––– 27,769.00 1,388.45 3,094,695.32 154,734.77
Accounts receivable /H1118/H1118/H1118/H1118Henan Qianmu Biological
Pharmaceutical Co., Ltd.
–––––– 4,028,506.20 201,425.31
Accounts receivable /H1118/H1118/H1118/H1118Henan Muyuan Construction
Engineering Co., Ltd.
–––– 2,690.00 134.50 190,608.12 9,530.41
Accounts receivable /H1118/H1118/H1118/H1118Rongtong Nongfa Muyuan
(Chongzhou) Co., Ltd.
– – 16,562.31 828.12 10,341.00 517.05 536,697.77 26,834.89
Accounts receivable /H1118/H1118/H1118/H1118Shenqiu County Chengtou Juai
Food Sales Co., Ltd.
–––––– 204,000.00 10,200.00
Accounts receivable /H1118/H1118/H1118/H1118Shenqiu County Agricultural
Investment Juai Food Sales
Co., Ltd.
–––––– 188,000.00 9,400.00
Accounts receivable /H1118/H1118/H1118/H1118Rongtong Nongfa Muyuan
(Jianyang) Co., Ltd.
–––– 20,138.50 1,006.93 1,497,837.00 74,891.85
Accounts receivable /H1118/H1118/H1118/H1118Henan Muyuan Hotel Co., Ltd. –––– 8,179.26 408.96 147,809.92 7,390.50
Accounts receivable /H1118/H1118/H1118/H1118Henan Muyuan Property
Management Co., Ltd.
Nanyang Branch
–––– 27,697.83 1,384.89 810,492.85 40,524.64
Accounts receivable /H1118/H1118/H1118/H1118Henan Binren Construction
Engineering Co., Ltd.
–––––– 71,337.00 3,566.85
APPENDIX I ACCOUNTANTS’ REPORT
– I-165 –


--- page 644 ---
Item Related party
As at 31 December As at 30 September
2022 2023 2024 2025
Book value
Provision for
bad and
doubtful debts Book value
Provision for
bad and
doubtful debts Book value
Provision for
bad and
doubtful debts Book value
Provision for
bad and
doubtful debts
Accounts receivable /H1118/H1118/H1118/H1118Henan Muyuan Equipment
Co., Ltd.
–––––– 155,961.00 7,798.05
Accounts receivable /H1118/H1118/H1118/H1118Henan Muyuan Logistics
Co., Ltd.
–––––– 141,991.00 7,099.55
Accounts receivable /H1118/H1118/H1118/H1118Henan Guoran Fengqing Fruit
Industry Co., Ltd.
–––– 249.00 12.45 21,483.00 1,074.15
Accounts receivable /H1118/H1118/H1118/H1118Henan Longda Muyuan Meat
Co., Ltd.
–––– 1 1,562.50 578.13 – –
Accounts receivable /H1118/H1118/H1118/H1118Henan Muyuan Smart
Logistics Park Co., Ltd.
–––– 299.00 14.95 8,370.00 418.50
Accounts receivable /H1118/H1118/H1118/H1118Muyuan Industrial Group
Co., Ltd.
–––––– 53,337.00 2,666.85
Accounts receivable /H1118/H1118/H1118/H1118Zhengzhou Juai Digital
Technology Co., Ltd.
–––––– 28,458.00 1,422.90
Accounts receivable /H1118/H1118/H1118/H1118Henan Shengda Special
V ehicle Co., Ltd.
–––––– 28,139.00 1,406.95
Accounts receivable /H1118/H1118/H1118/H1118Mucai Optimum (Henan)
Supply Chain Management
Co., Ltd.
–––––– 21,762.00 1,088.10
Accounts receivable /H1118/H1118/H1118/H1118Henan Xinghua Instrument
Equipment Co., Ltd.
–––––– 20,925.00 1,046.25
Accounts receivable /H1118/H1118/H1118/H1118Cnex Fire V ehicle
Manufacturing Co., Ltd.
–––––– 18,314.00 915.70
Accounts receivable /H1118/H1118/H1118/H1118Henan Wanmu New Material
Co., Ltd.
–––––– 16,899.00 844.95
Accounts receivable /H1118/H1118/H1118/H1118Henan Muyuan Agricultural
Development Co., Ltd.
–––––– 14,846.00 742.30
Accounts receivable /H1118/H1118/H1118/H1118Sheqi Wenxin Food Sales
Co., Ltd.
–––––– 12,834.00 641.70
Accounts receivable /H1118/H1118/H1118/H1118Henan Shengda Development
Co., Ltd.
–––––– 10,223.00 511.15
APPENDIX I ACCOUNTANTS’ REPORT
– I-166 –


--- page 645 ---
Item Related party
As at 31 December As at 30 September
2022 2023 2024 2025
Book value
Provision for
bad and
doubtful debts Book value
Provision for
bad and
doubtful debts Book value
Provision for
bad and
doubtful debts Book value
Provision for
bad and
doubtful debts
Accounts receivable /H1118/H1118/H1118/H1118Henan Shengda Motor V ehicle
Inspection Management
Co., Ltd.
–––––– 7,812.00 390.60
Accounts receivable /H1118/H1118/H1118/H1118Neixiang Zhongyi High
Efficiency Agricultural
Technology Development
Co., Ltd.
–––––– 6,417.00 320.85
Accounts receivable /H1118/H1118/H1118/H1118Xixia Shengshida Real Estate
Co., Ltd.
–––––– 6,337.00 316.85
Accounts receivable /H1118/H1118/H1118/H1118Henan Juaiwangfa Food
Co., Ltd.
–––––– 5,859.00 292.95
Accounts receivable /H1118/H1118/H1118/H1118Neixiang Shengwangda Real
Estate Co., Ltd.
–––––– 5,580.00 279.00
Accounts receivable /H1118/H1118/H1118/H1118Henan Guigeng Agricultural
Development Co., Ltd.
–––––– 5,301.00 265.05
Accounts receivable /H1118/H1118/H1118/H1118Neixiang County Shengduo
Watershed Water Ecological
Environment Treatment
Co., Ltd.
–––––– 4,464.00 223.20
Accounts receivable /H1118/H1118/H1118/H1118Neixiang County Shengrongda
Real Estate Co., Ltd.
–––––– 3,906.00 195.30
Accounts receivable /H1118/H1118/H1118/H1118Nanyang Jinsheng Smart
Electrical Appliance
Co., Ltd.
–––––– 3,069.00 153.45
Accounts receivable /H1118/H1118/H1118/H1118Shanxi Muyuan Agricultural
Development Co., Ltd.
–––––– 2,780.00 139.00
Accounts receivable /H1118/H1118/H1118/H1118Dengzhou Shengda
Agricultural Development
Co., Ltd.
–––––– 2,790.00 139.50
Accounts receivable /H1118/H1118/H1118/H1118Henan Juai Pharmacy Co., Ltd. –––––– 2,790.00 139.50
APPENDIX I ACCOUNTANTS’ REPORT
– I-167 –


--- page 646 ---
Item Related party
As at 31 December As at 30 September
2022 2023 2024 2025
Book value
Provision for
bad and
doubtful debts Book value
Provision for
bad and
doubtful debts Book value
Provision for
bad and
doubtful debts Book value
Provision for
bad and
doubtful debts
Accounts receivable /H1118/H1118/H1118/H1118Neixiang Weixin Business
Information Service
Co., Ltd.
–––––– 2,511.00 125.55
Accounts receivable /H1118/H1118/H1118/H1118Fengshengjia (Ningling
County) Construction
Development Co., Ltd.
–––––– 2,511.00 125.55
Accounts receivable /H1118/H1118/H1118/H1118Fengshengjia (Nanyang)
Construction Development
Co., Ltd.
–––––– 1,953.00 97.65
Accounts receivable /H1118/H1118/H1118/H1118Henan Zefu Real Estate
Development Co., Ltd.
–––––– 1,953.00 97.65
Accounts receivable /H1118/H1118/H1118/H1118Xingfujia (Zhoukou)
Construction Development
Co., Ltd.
–––––– 1,674.00 83.70
Accounts receivable /H1118/H1118/H1118/H1118Fugou Muyuan Agricultural
Development Co., Ltd.
–––––– 1,573.00 78.65
Accounts receivable /H1118/H1118/H1118/H1118Nanyang Jinding Smart
Equipment Co., Ltd.
–––––– 1,395.00 69.75
Accounts receivable /H1118/H1118/H1118/H1118Henan Juai Automobile Sales
Service Co., Ltd.
–––––– 1,395.00 69.75
Accounts receivable /H1118/H1118/H1118/H1118Neixiang County Guoxing
Construction Labor
Subcontracting Co., Ltd.
–––––– 1,395.00 69.75
Accounts receivable /H1118/H1118/H1118/H1118Henan Juaiyunchao Trading
Co., Ltd.
–––––– 1 , 1 16.00 55.80
Accounts receivable /H1118/H1118/H1118/H1118Fangcheng Production
Investment Food Sales
Co., Ltd.
–––––– 1 , 1 16.00 55.80
Accounts receivable /H1118/H1118/H1118/H1118Nanyang Wolong District Juai
Digital Technology
Co., Ltd.
–––––– 1 , 1 16.00 55.80
APPENDIX I ACCOUNTANTS’ REPORT
– I-168 –


--- page 647 ---
Item Related party
As at 31 December As at 30 September
2022 2023 2024 2025
Book value
Provision for
bad and
doubtful debts Book value
Provision for
bad and
doubtful debts Book value
Provision for
bad and
doubtful debts Book value
Provision for
bad and
doubtful debts
Accounts receivable /H1118/H1118/H1118/H1118Zhoukou Juai Food Sales
Co., Ltd.
–––––– 1 , 1 16.00 55.80
Accounts receivable /H1118/H1118/H1118/H1118Hubei Muyuan Agricultural
Development Co., Ltd.
–––––– 837.00 41.85
Accounts receivable /H1118/H1118/H1118/H1118Shaanxi Muyuan West
Biotechnology Co., Ltd.
–––––– 837.00 41.85
Accounts receivable /H1118/H1118/H1118/H1118Fangcheng Muyuan
Agricultural Development
Co., Ltd.
–––––– 837.00 41.85
Accounts receivable /H1118/H1118/H1118/H1118Nanyang High-tech Zone Juai
Food Ingredients Sales
Co., Ltd.
–––––– 837.00 41.85
Accounts receivable /H1118/H1118/H1118/H1118Henan Zhongying Digital
Technology Co., Ltd.
–––––– 837.00 41.85
Accounts receivable /H1118/H1118/H1118/H1118Henan Zhongyou Muyuan Oil
and Gas Co., Ltd.
–––––– 837.00 41.85
Accounts receivable /H1118/H1118/H1118/H1118Henan Juai Travel Agency
Co., Ltd.
–––––– 837.00 41.85
Accounts receivable /H1118/H1118/H1118/H1118Fangcheng Muyuan Logistics
Co., Ltd.
–––––– 558.00 27.90
Accounts receivable /H1118/H1118/H1118/H1118Neixiang Juai Catering
Management Service
Co., Ltd.
–––––– 558.00 27.90
Accounts receivable /H1118/H1118/H1118/H1118Xihua Muyuan Agricultural
Development Co., Ltd.
–––––– 558.00 27.90
Accounts receivable /H1118/H1118/H1118/H1118Anhui Muyuan West
Biotechnology Co., Ltd.
–––––– 558.00 27.90
Accounts receivable /H1118/H1118/H1118/H1118Caoxian Muyuan West
Biotechnology Co., Ltd.
–––––– 558.00 27.90
Accounts receivable /H1118/H1118/H1118/H1118Neihuang County Juai Digital
Technology Co., Ltd.
–––––– 279.00 13.95
APPENDIX I ACCOUNTANTS’ REPORT
– I-169 –


--- page 648 ---
Item Related party
As at 31 December As at 30 September
2022 2023 2024 2025
Book value
Provision for
bad and
doubtful debts Book value
Provision for
bad and
doubtful debts Book value
Provision for
bad and
doubtful debts Book value
Provision for
bad and
doubtful debts
Prepayments /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Zhejiang Juneng Bao Oil
Products Trading Co., Ltd.
–––––– 20,792,178.25 –
Prepayments /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Henan Muyuan Equipment
Co., Ltd.
–––––– 1 1,496.00 –
Prepayments /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Zhongmu Muyuan (Henan)
Biological Pharmaceutical
Co., Ltd.
–––––– 1,632.00 –
Other receivables /H1118/H1118/H1118/H1118/H1118Rongtong Nongfa Muyuan
(Jianyang) Co., Ltd.
– – 100,000.00 5,000.00 100,000.00 20,000.00 100,000.00 20,000.00
Bills receivable /H1118/H1118/H1118/H1118/H1118/H1118Henan Longda Muyuan Meat
Co., Ltd.
60,000,000.00 – 129,090,000.00 – 150,900,000.00 – 60,000,000.00 –
Other non-current assets /H1118/H1118Henan Juai Automobile Sales
Service Co., Ltd.
–––– 395,600.0 0–––
Other current assets /H1118/H1118/H1118/H1118Henan Muyuan Construction
Engineering Co., Ltd.
–––––– 15,607,170.41 –
Other current assets /H1118/H1118/H1118/H1118Henan Nan’o Construction
Engineering Co., Ltd.
–––––– 350,820.36 –
Other current assets /H1118/H1118/H1118/H1118Henan Juai Construction
Engineering Co., Ltd.
–––––– 140,208.03 –
Other current assets /H1118/H1118/H1118/H1118Henan Shengda Special
V ehicle Co., Ltd.
–––––– 75,000.00 –
Other current assets /H1118/H1118/H1118/H1118Nanyang Jinxiang Smart
Equipment Co., Ltd.
–––––– 55,926.00 –
Other current assets /H1118/H1118/H1118/H1118Henan Muyuan Property
Management Co., Ltd.
–––––– 12,138.24 –
Other current assets /H1118/H1118/H1118/H1118Henan Muyuan Smart
Logistics Park Co., Ltd.
–––––– 303.03 –
APPENDIX I ACCOUNTANTS’ REPORT
– I-170 –


--- page 649 ---
(2) Non-trade related: receivables from related parties
As at 31 December As at 30 September
2022 2023 2024 2025
Item Related party Book value
Provision
for bad and
doubtful
debts Book value
Provision
for bad and
doubtful
debts Book value
Provision
for bad and
doubtful
debts Book value
Provision
for bad and
doubtful
debts
Dividends
receivables /H1118/H1118
Guangdong Guangken
Muyuan Livestock
Husbandry Co.,
Ltd.
– – 960,262.02 –––––
(3) Trade related: payables to related parties
Item Related party
As at 31 December
As at
30 September
2022 2023 2024 2025
Accounts payable /H1118/H1118Henan Muyuan Construction
Engineering Co., Ltd.
8,477,678,425.01 5,735,860,213.77 4,076,758,465.80 4,245,925,990.52
Accounts payable /H1118/H1118Zhonghe Construction
Engineering (Henan)
Co., Ltd.
– – 284,668,769.92 479,678,983.25
Accounts payable /H1118/H1118Henan Muyuan Equipment
Co., Ltd.
156,337,885.65 200,193,096.96 153,970,260.72 34,514,002.07
Accounts payable /H1118/H1118Henan Lianmu V eterinary
Medicine Co., Ltd.
– – 61,546,332.68 80,000.00
Accounts payable /H1118/H1118Henan Muyuan Logistics
Co., Ltd.
211,805,604.68 43,675,852.52 5,279,754.03 34,839,078.27
Accounts payable /H1118/H1118Henan Shengda Special
V ehicle Co., Ltd.
– 12,850,925.45 65,930,225.57 6,796,405.28
Accounts payable /H1118/H1118Henan Zhengtai Muyuan
Smart Electrical
Technology Co., Ltd.
– 23,597,550.12 13,487,640.92 4,254,165.70
Accounts payable /H1118/H1118Henan Wanmu New Material
Co., Ltd.
– 932,047.00 27,171,753.71 4,367,718.47
Accounts payable /H1118/H1118Zhongmu Muyuan (Henan)
Biological Pharmaceutical
Co., Ltd.
– – 136,736,666.00 16,720,847.55
Accounts payable /H1118/H1118Zhejiang Juneng Bao Oil
Products Trading
Co., Ltd.
– – 14,824,399.01 5,899,374.88
Accounts payable /H1118/H1118Henan Juai Digital
Technology Co., Ltd.
29,749,697.08 9,774,959.62 8,463,822.84 20,699,090.57
Accounts payable /H1118/H1118Nanyang Jinding Smart
Equipment Co., Ltd.
– – 6,703,961.15 7,804,347.96
Accounts payable /H1118/H1118Henan Juai Construction
Engineering Co., Ltd.
– – – 51,084,493.67
Accounts payable /H1118/H1118Henan Xinghua Instrument
Equipment Co., Ltd.
– 8,408,593.51 28,066,633.71 5,406,968.80
Accounts payable /H1118/H1118Henan Juai Automobile Sales
Service Co., Ltd.
– – – 568,600.00
Accounts payable /H1118/H1118Haikou Longmu New Energy
Technology Co., Ltd.
– – – 414,671.22
Accounts payable /H1118/H1118Mucai Optimum (Henan)
Supply Chain
Management Co., Ltd.
– – 250,162.12 936,204.45
APPENDIX I ACCOUNTANTS’ REPORT
– I-171 –


--- page 650 ---
Item Related party
As at 31 December
As at
30 September
2022 2023 2024 2025
Accounts payable /H1118/H1118Guangdong Guangken
Muyuan Livestock
Husbandry Co., Ltd.
– – 186,500.00 –
Accounts payable /H1118/H1118Cnex Fire V ehicle
Manufacturing Co., Ltd.
11,521,927.7 5–––
Accounts payable /H1118/H1118Neixiang Juai Food Material
Sales Co., Ltd.
– – 5,720.82 –
Accounts payable /H1118/H1118Henan Muyuan Property
Management Co., Ltd.
Neixiang Branch
– – 1,140.00 –
Accounts payable /H1118/H1118Henan Juaiyunchao Trading
Co., Ltd.
– – 669.92 –
Accounts payable /H1118/H1118Neixiang Shengwangda Real
Estate Co., Ltd.
– – 628.00 –
Accounts payable /H1118/H1118Xixia Shengshida Real
Estate Co., Ltd.
– – 424.00 –
Accounts payable /H1118/H1118Henan Zhongyou Muyuan
Oil and Gas Co., Ltd.
– 3,582,912.74 – –
Accounts payable /H1118/H1118Henan Junengbao Energy
Trading Co., Ltd.
– – – 838,265.20
Accounts payable /H1118/H1118Muyuan Industrial Group
Co., Ltd.
– – – 2,998,530.00
Accounts payable /H1118/H1118Fangcheng Y ushengyuan
Livestock Husbandry
Co., Ltd.
– – – 2,884,615.13
Accounts payable /H1118/H1118Henan Nan’o Construction
Engineering Co., Ltd.
– – – 4,961,679.22
Accounts payable /H1118/H1118Leizhou Longmu New
Energy Co., Ltd.
– – – 4,627,775.73
Accounts payable /H1118/H1118Huai’an Jinhu Longyuan
New Energy Co., Ltd.
– – – 277,000.00
Accounts payable /H1118/H1118Mianzhu Longyuan New
Energy Power Generation
Co., Ltd.
– – – 30,861.23
Contract liabilities /H1118/H1118Henan Juai Digital
Technology Co., Ltd.
245,080.00 1,005,420.18 10,308,109.91 10,965,759.94
Contract liabilities /H1118/H1118Guangdong Guangken
Muyuan Livestock
Husbandry Co., Ltd.
2,097,725.08 979,055.00 – –
Contract liabilities /H1118/H1118Neixiang Juai Food Material
Sales Co., Ltd.
– – 169,802.51 53,479.39
Contract liabilities /H1118/H1118Nanyang Industry Investment
Food Material Sales
Co., Ltd.
– – 691,973.10 144,069.23
Contract liabilities /H1118/H1118Rongtong Nongfa Muyuan
(Chongzhou) Co., Ltd.
453,351.28 742,012.42 247,724.78 173,024.13
Contract liabilities /H1118/H1118Shenqiu County Agricultural
Investment Juai Food
Sales Co., Ltd.
– – 303,600.15 226,901.23
Contract liabilities /H1118/H1118Shenqiu County Chengtou
Juai Food Sales Co., Ltd.
– – 293,840.59 298,720.02
Contract liabilities /H1118/H1118Xixia County Industry
Investment Food Sales
Co., Ltd.
– – 6,584.72 661.79
APPENDIX I ACCOUNTANTS’ REPORT
– I-172 –


--- page 651 ---
Item Related party
As at 31 December
As at
30 September
2022 2023 2024 2025
Contract liabilities /H1118/H1118Rongtong Nongfa Muyuan
(Jianyang) Co., Ltd.
– 990,965.00 – –
Contract liabilities /H1118/H1118Henan Longda Muyuan Meat
Co., Ltd.
– – – 12.57
Contract liabilities /H1118/H1118Fangcheng Y ushengyuan
Livestock Husbandry Co.,
Ltd.
– – – 1,528.76
Other payables /H1118/H1118/H1118/H1118Zhongmu Muyuan (Henan)
Biological Pharmaceutical
Co., Ltd.
– – 20,382.00 1,000,000.00
Other payables /H1118/H1118/H1118/H1118Henan Lianmu V eterinary
Medicine Co., Ltd.
– – 20,000.00 1,000,000.00
Other payables /H1118/H1118/H1118/H1118Henan Qianmu Biological
Pharmaceutical Co., Ltd.
– – – 800,000.00
Other payables /H1118/H1118/H1118/H1118Henan Zhengtai Muyuan
Smart Electrical
Technology Co., Ltd.
– 120,000.00 120,000.00 120,000.00
Other payables /H1118/H1118/H1118/H1118Nanyang Industry Investment
Food Material Sales Co.,
Ltd.
– 40,000.00 40,000.00 39,160.00
Other payables /H1118/H1118/H1118/H1118Henan Muyuan Construction
Engineering Co., Ltd.
6,669,706.89 – – 50,000.00
Other payables /H1118/H1118/H1118/H1118Neixiang Juai Food Material
Sales Co., Ltd.
50,000.00 50,000.00 – –
Bills payable /H1118/H1118/H1118/H1118Henan Lianmu V eterinary
Medicine Co., Ltd.
– – – 212,889,411.40
Bills payable /H1118/H1118/H1118/H1118Zhongmu Muyuan (Henan)
Biological Pharmaceutical
Co., Ltd.
– – 85,121,713.20 59,558,391.60
Bills payable /H1118/H1118/H1118/H1118Henan Muyuan Equipment
Co., Ltd.
– 8,662,638.16 26,182,704.25 –
Bills payable /H1118/H1118/H1118/H1118Henan Muyuan Construction
Engineering Co., Ltd.
9,984,916.96 55,403,542.60 3,567,528.80 –
Bills payable /H1118/H1118/H1118/H1118Henan Xinghua Instrument
Equipment Co., Ltd.
– – 1,757,000.00 –
(4) Non-trade related: payables to related parties
Item Related party
As at 31 December
As at
30 September
2022 2023 2024 2025
Other payables /H1118/H1118/H1118/H1118/H1118/H1118Muyuan Group 1,000,000,000.00 1,900,000,000.00 – –
APPENDIX I ACCOUNTANTS’ REPORT
– I-173 –


--- page 652 ---
XI. SHARE-BASED PAYMENTS
1 Overall information of share-based payments
During the Track Record Period, share-based payments of the Group are as follows:
Y ear ended 31 December
Nine months ended
30 September
2022 2023 2024 2025
Quantity Amount Quantity Amount Quantity Amount Quantity Amount
Granted /H1118/H111859,685,191.00 491,870,986.00 –––– 41,870,091.00 1,281,643,485.51
Exercised /H1118/H1118 ––––––––
Unlocked /H1118/H111856,383,636.00 961,672,460.68 35,281,351.00 769,081,009.86 25,153,053.00 548,588,085.93 – –
Forfeited /H1118/H11183,754,414.00 38,132,287.08 3,319,380.00 52,418,309.40 533,335.00 11,224,536.49 – –
2 Equity-settled share-based payments
(1) Restricted Shares Incentive Scheme 2022
On 14 March 2022, the 7th meeting of the fourth Board of the Company reviewed and passed the Proposal on
Granting Restricted Shares to Incentive Objects, agreeing 14 March 2022 as the grant date, and granted 59,685,191
restricted shares to 5,577 employees who meet the grant conditions at a grant price of RMB30.52 per share. The
Company completed the registration of restricted shares on 25 March 2022.
According to the provisions of the restricted shares incentive scheme, the restricted shares granted will be
restricted for 12 months or 24 months from the date of registration of the restricted shares granted to the employees.
The restricted shares granted to the employees under this incentive scheme shall not be transferred, used to guarantee
or repay debts before the restrictions on sales are unlocked. When the sales restriction period expires, the Company
will process the unlocking of the sales restriction for the employees that meet the conditions, and those restricted
shares that do not meet the conditions will be repurchased and cancelled by the Company. The validity period of the
scheme is from the date of completion of registration of the granted restricted shares to the date of completion of the
unlocking of restrictions on the sales of all restricted shares or the repurchase of all restricted shares, which shall not
exceed 48 months at most.
(2) Restricted Shares Incentive Scheme 2025
On 8 September 2025, the first extraordinary general meeting of shareholders of the Company during 2025
reviewed and passed the Proposal on Granting Restricted Shares to Incentive Objects, and granted 41,870,091.00
restricted shares to 4,875 employees who meet the grant conditions at a grant price of RMB25.04 per share. The
Company completed the registration of restricted shares on 27 September 2025.
According to the provisions of the restricted shares incentive scheme, the restricted shares granted will be
restricted for 12 months, 24 months or 36 months from the date of registration of the restricted shares granted to the
employees. The restricted shares granted to the employees under this incentive scheme shall not be transferred, used
to guarantee or repay debts before the restrictions on sales are unlocked. When the sales restriction period expires,
the Company will process the unlocking of the sales restriction for the employees that meet the conditions, and those
restricted shares that do not meet the conditions will be repurchased by the Company.
(3) Unlock of restricted shares granted during the Track Record Period
During the years ended 31 December 2022, 2023 and 2024 and the nine months ended 30 September 2025,
pursuant to the approval of the Board of Directors, the quantity of restricted shares unlocked is 56,383,636.00,
35,281,351.00, 25,153,053.00 and nil, respectively.
APPENDIX I ACCOUNTANTS’ REPORT
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(4) Repurchase and cancellation of restricted shares granted during the Track Record Period
During the years ended 31 December 2022, 2023 and 2024 and the nine months ended 30 September 2025, due
to resignation of employees and pursuant to the approval of the Board of Directors, the quantity of restricted
repurchased is 3,754,414.00, 3,319,380.00, 533,335.00 and nil, respectively.
As at 31 December As at 30 September
2022 2023 2024 2025
Method for determining
the fair value of
equity instruments at
the grant date /H1118/H1118/H1118/H1118/H1118
Based on fair
value and grant
price at the
grant date
Based on fair
value and grant
price at the
grant date
Based on fair
value and grant
price at the
grant date
Based on fair
value and grant
price at the
grant date
Basis for determining
the number of equity
instruments expected
to vest /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
The Company
estimates
according to the
restricted shares
granted and the
performance
conditions of the
employees
during the
related
unlocking period
The Company
estimates
according to the
restricted shares
granted and the
performance
conditions of the
employees
during the
related
unlocking period
The Company
estimates
according to the
restricted shares
granted and the
performance
conditions of the
employees
during the
related
unlocking period
The Company
estimates
according to the
restricted shares
granted and the
performance
conditions of the
employees
during the
related
unlocking period
Reasons for material
differences between
estimates for the
current and previous
period /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
None None None None
Accumulated amount of
equity- settled share-
based payments
recognised in capital
reserve /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
2,720,379,599.40 3,064,342,503.09 3,099,988,429.99 3,171,644,999.34
3 Expenses recognised arising from share-based payments
Item
Y ear ended 31 December Nine months ended 30 September
2022 2023 2024 2024 2025
(unaudited)
Equity-settled
share-based
payments /H1118/H1118/H1118850,037,704.02 343,962,903.69 35,645,926.90 35,645,926.90 71,656,569.35
XII. COMMITMENTS AND CONTINGENCIES
There are no significant commitments or contingencies to disclose of the Company.
XIII. MATERIAL NON-ADJUSTING POST EVENTS
Other than the interim dividend paid after 30 September 2025 disclosed in Note IV .41, there are no other
material non-adjusting post events that needs to be disclosed as at the date of this report.
APPENDIX I ACCOUNTANTS’ REPORT
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XIV . OTHER SIGNIFICANT ITEMS
Segment reporting
The Group has 4 reportable segments, which are (i) hog business, (ii) slaughtering and meat product business,
(iii) feed ingredients trading and (iv) others. Each reportable segment is a separate business unit which offers
different products and services. The Group managed each segment separately because each segment requires different
technology and marketing strategies.
– Hog business: breeding and sales of hogs;
– Slaughtering and meat product business: hog slaughtering and sales of meat products and by-products;
– Feed ingredients trading: sales of raw material for feed; and
– Others: mainly sales of pig manure, leasing, and other services.
(1) Segment information
Y ear ended 31 December 2022:
Item Hog business
Slaughtering and
meat product
business
Feed ingredients
trading Others
Inter-segment
elimination Total
Revenue /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118119,744,018,933.43 14,718,143,089.45 5,509,168,371.40 489,049,312.89 (15,634,167,529.43) 124,826,212,177.74
Operating costs /H1118/H1118/H1118/H1118/H111897,687,351,297.58 14,791,650,369.94 5,455,481,222.96 419,966,460.35 (15,367,389,879.84) 102,987,059,470.99
Expenses and taxes and
surcharges /H1118/H1118/H1118/H1118/H1118/H1118 9,195,569,964.63
Other income /H1118/H1118/H1118/H1118/H1118 2,188,567,446.35
Investment income /H1118/H1118/H1118 46,891,941.67
Credit losses /H1118/H1118/H1118/H1118/H1118/H1118 (23,105,915.89)
Losses from asset
disposals /H1118/H1118/H1118/H1118/H1118/H1118 (2,241,278.21)
Operating profit /H1118/H1118/H1118/H1118 14,853,694,936.04
Non-operating income /H1118/H1118 376,910,540.58
Non-operating expenses /H1118 300,573,288.40
Profit before income tax /H1118 14,930,032,188.22
Y ear ended 31 December 2023:
Item Hog business
Slaughtering and
meat production
business
Feed ingredients
trading Others
Inter-segment
elimination Total
Revenue /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118108,224,321,673.98 21,862,329,292.88 3,023,116,790.04 543,935,788.81 (22,792,975,831.31) 110,860,727,714.40
Operating costs /H1118/H1118/H1118/H1118/H1118105,060,685,687.09 21,826,834,288.38 3,083,201,630.46 506,360,076.67 (23,062,295,690.24) 107,414,785,992.36
Expenses and taxes and
surcharges /H1118/H1118/H1118/H1118/H1118/H1118 9,760,337,258.78
Other income /H1118/H1118/H1118/H1118/H1118 2,805,639,552.51
Investment losses /H1118/H1118/H1118/H1118 (6,388,843.39)
Credit losses /H1118/H1118/H1118/H1118/H1118/H1118 (4,165,810.97)
Impairment losses /H1118/H1118/H1118 (202,476,115.94)
Losses from asset
disposals /H1118/H1118/H1118/H1118/H1118/H1118 (10,125,079.30)
Operating loss /H1118/H1118/H1118/H1118/H1118 (3,731,911,833.83)
Non-operating income /H1118/H1118 157,186,690.29
Non-operating expenses /H1118 595,363,342.03
Loss before income tax /H1118 (4,170,088,485.57)
APPENDIX I ACCOUNTANTS’ REPORT
– I-176 –


--- page 655 ---
Y ear ended 31 December 2024:
Item Hog business
Slaughtering and
meat production
business
Feed ingredients
trading Others
Inter-segment
elimination Total
Revenue /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118136,229,329,743.49 24,273,640,358.59 1,432,318,994.72 447,375,315.83 (24,435,772,335.76) 137,946,892,076.87
Operating costs /H1118/H1118/H1118/H1118/H1118110,063,927,873.75 24,024,581,695.61 1,458,465,493.31 414,021,300.76 (24,294,469,886.54) 111,666,526,476.89
Expenses and taxes and
surcharges /H1118/H1118/H1118/H1118/H1118/H1118 9,373,257,570.68
Other income /H1118/H1118/H1118/H1118/H1118 3,010,397,096.76
Investment income /H1118/H1118/H1118 99,638,320.05
Gains from changes in
fair value /H1118/H1118/H1118/H1118/H1118/H1118 158,000.00
Credit reversal /H1118/H1118/H1118/H1118/H1118 283,692.84
Impairment losses /H1118/H1118/H1118 (12,884,326.14)
Gains from asset
disposals /H1118/H1118/H1118/H1118/H1118/H1118 5,845,833.88
Operating profit /H1118/H1118/H1118/H1118 20,010,546,646.69
Non-operating income /H1118/H1118 84,412,274.98
Non-operating expenses /H1118 1,198,480,011.03
Profit before income tax /H1118 18,896,478,910.64
Nine months ended 30 September 2025:
Item Hog business
Slaughtering and
meat production
business
Feed ingredients
trading Others
Inter-segment
elimination Total
Revenue /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118109,516,048,510.95 31,812,698,244.61 2,478,628,937.70 691,220,463.65 (32,708,591,278.19) 111,790,004,878.72
Operating costs /H1118/H1118/H1118/H1118/H111889,322,197,744.85 31,101,095,735.57 2,474,807,886.27 612,056,832.57 (32,654,686,164.50) 90,855,472,034.76
Expenses and taxes and
surcharges /H1118/H1118/H1118/H1118/H1118/H1118 7,102,141,592.18
Other income /H1118/H1118/H1118/H1118/H1118 2,028,722,476.96
Investment income /H1118/H1118/H1118 95,790,321.35
Gains from changes in
fair value /H1118/H1118/H1118/H1118/H1118/H1118 6,027,084.65
Credit losses /H1118/H1118/H1118/H1118/H1118/H1118 (13,032,562.84)
Impairment losses /H1118/H1118/H1118 (2,934,053.12)
Gains from asset
disposals /H1118/H1118/H1118/H1118/H1118/H1118 1,783,198.80
Operating profit /H1118/H1118/H1118/H1118 15,948,747,717.58
Non-operating income /H1118/H1118 82,316,184.16
Non-operating expenses /H1118 934,591,851.01
Profit before income tax /H1118 15,096,472,050.73
APPENDIX I ACCOUNTANTS’ REPORT
– I-177 –


--- page 656 ---
Nine months ended 30 September 2024 (unaudited) :
Item Hog business
Slaughtering and
meat production
business
Feed ingredients
trading Others
Inter-segment
elimination Total
Revenue /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111895,356,686,209.70 15,881,047,843.53 896,193,001.75 273,645,584.19 (15,632,447,072.86) 96,775,125,566.31
Operating costs /H1118/H1118/H1118/H1118/H111878,508,798,149.57 15,851,434,363.50 919,163,944.27 270,677,214.88 (15,484,708,302.32) 80,065,365,369.90
Expenses and taxes and
surcharges /H1118/H1118/H1118/H1118/H1118/H1118 7,192,604,368.47
Other income /H1118/H1118/H1118/H1118/H1118 2,552,428,801.75
Investment income /H1118/H1118/H1118 42,171,395.16
Losses from changes in
fair value /H1118/H1118/H1118/H1118/H1118/H1118 (1,435,440.00)
Credit reversal /H1118/H1118/H1118/H1118/H1118 9,156,742.95
Impairment losses /H1118/H1118/H1118 (12,472,553.87)
Gains from asset
disposals /H1118/H1118/H1118/H1118/H1118/H1118 7,590,173.16
Operating profit /H1118/H1118/H1118/H1118 12,114,594,947.09
Non-operating income /H1118/H1118 64,300,608.96
Non-operating expenses /H1118 965,561,318.04
Profit before income tax /H1118 11,213,334,238.01
The main business of the Group is the hog business and slaughtering and meat product business, the production
process, product nature, customer type and sales mode of which are basically the same and there is no obvious
difference in the risks and rewards of products provided between different regions. The subsidiaries of the Group are
engaged in different segment operating activities and certain assets are shared, which is difficult to allocate the
corresponding assets and liabilities into each reporting segment, thus the total assets and total liabilities of each
reporting segment cannot be disclosed.
(2) Major customers
During the Track Record Period, the Group had no customer with whom transactions have exceeded 10% of
the Group’s total revenue.
XV . NOTES TO THE COMPANY’S FINANCIAL STATEMENTS
1 Cash at bank and on hand
As at 31 December As at 30 September
Item 2022 2023 2024 2025
Cash on hand /H1118/H1118/H1118/H1118/H1118/H1118/H1118––––
Deposits with banks /H1118/H1118/H11184,487,131,302.96 5,319,916,666.99 4,248,007,810.68 10,460,019,912.04
Other monetary funds /H1118/H1118 565,080,006.70 3,097,418,061.98 1,993,480,448.86 1,505,537,885.48
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185,052,211,309.66 8,417,334,728.97 6,241,488,259.54 11,965,557,797.52
Including:
Total overseas deposits /H1118/H1118 ––––
APPENDIX I ACCOUNTANTS’ REPORT
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--- page 657 ---
Cash at bank and on hand that has restriction of use:
As at 31 December As at 30 September
Item 2022 2023 2024 2025
Bank acceptance bill
deposit, loan deposit,
futures deposit, letter
of credit deposit, etc. /H1118 501,471,506.52 2,998,722,025.60 1,830,994,319.37 1,131,317,350.27
2 Accounts receivable
(1) The ageing analysis of accounts receivable is as follows:
As at 31 December As at 30 September
2022 2023 2024 2025
Within 1 year
(inclusive) /H1118/H1118/H1118/H1118/H1118/H11186,349,297,634.20 1,742,986,924.40 624,939,800.61 357,918,241.04
Over 1 year but
within 2 years
(inclusive) /H1118/H1118/H1118/H1118/H1118/H111879,180.00 387,126,184.68 703,607,328.94 430,956,098.68
Over 2 years but
within 3 years
(inclusive) /H1118/H1118/H1118/H1118/H1118/H1118 – 79,180.00 162,701,989.13 611,607,165.20
Over 3 years /H1118/H1118/H1118/H1118/H1118 – – – 135,171,581.81
Subtotal /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11186,349,376,814.20 2,130,192,289.08 1,491,249,118.68 1,535,653,086.73
Less: Provision for
bad and doubtful
debts /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 118,130.55 286,020.57 297,578.48
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11186,349,376,814.20 2,130,074,158.53 1,490,963,098.11 1,535,355,508.25
The ageing is counted starting from the date when accounts receivable is recognised.
(2) Accounts receivable by customer type are as follows:
As at 31 December As at 30 September
2022 2023 2024 2025
Accounts receivable due
from subsidiaries /H1118/H1118/H1118/H11186,349,376,814.20 2,127,829,678.03 1,489,819,015.83 1,535,010,827.13
Accounts receivable due
from third parties /H1118/H1118/H1118 – 2,244,480.50 1,144,082.28 344,681.12
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11186,349,376,814.20 2,130,074,158.53 1,490,963,098.11 1,535,355,508.25
APPENDIX I ACCOUNTANTS’ REPORT
– I-179 –


--- page 658 ---
(3) Accounts receivable by provision method
Category
As at 31 December 2022
Book value
Provision for bad
and doubtful debts
Carrying amountAmount Percentage Amount Percentage
(%) (%)
Individual assessment /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–– –– –
Collective assessment
– Group 1: receivables due from
subsidiaries within the
consolidation scope /H1118/H1118/H11186,349,376,814.20 100.00 – – 6,349,376,814.20
– Group 2: other accounts
receivable /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–– –– –
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11186,349,376,814.20 100.00 – 6,349,376,814.20Category
As at 31 December 2023
Book value
Provision for bad
and doubtful debts
Carrying amountAmount Percentage Amount Percentage
(%) (%)
Individual assessment /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–– –– –
Collective assessment
– Group 1: receivables due from
subsidiaries within the
consolidation scope /H1118/H1118/H11182,127,829,678.03 99.89 – – 2,127,829,678.03
– Group 2: other accounts
receivable /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,362,611.05 0.11 118,130.55 5.00 2,244,480.50
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,130,192,289.08 100.00 118,130.55 2,130,074,158.53Category
As at 31 December 2024
Book value
Provision for bad
and doubtful debts
Carrying amountAmount Percentage Amount Percentage
(%) (%)
Individual assessment /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–– –– –
Collective assessment
– Group 1: receivables due from
subsidiaries within the
consolidation scope /H1118/H1118/H11181,489,819,015.83 99.90 – – 1,489,819,015.83
– Group 2: other accounts
receivable /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,430,102.85 0.10 286,020.57 20.00 1,144,082.28
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,491,249,118.68 100.00 286,020.57 1,490,963,098.11
APPENDIX I ACCOUNTANTS’ REPORT
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--- page 659 ---
Category
As at 30 September 2025
Book value
Provision for bad
and doubtful debts
Carrying amountAmount Percentage Amount Percentage
(%) (%)
Individual assessment /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118–– –– –
Collective assessment
– Group 1: receivables due from
subsidiaries within the
consolidation scope /H1118/H1118/H11181,535,010,827.13 99.96 – – 1,535,010,827.13
– Group 2: other accounts
receivable /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118642,259.60 0.04 297,578.48 46.33 344,681.12
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,535,653,086.73 100.00 297,578.48 1,535,355,508.25
(a) Assessment of ECLs on accounts receivable:
At all times, the Company measures impairment loss for accounts receivable at an amount equal to lifetime
ECLs, and the ECLs are based on the ageing and the expected loss rate.
The expected credit loss rate is measured based on historical credit loss experience and is adjusted for
differences in economic conditions during the historical period, current economic conditions and anticipated
economic conditions during the expected lifetime.
In Group 2, provision for bad and doubtful debts are based on ageing information:
As at 31 December 2022, the Company has no other accounts receivable of Group 2.
As at 31 December 2023 and 2024 and 30 September 2025, the Company’s other accounts receivable of Group
2 are as follows:
As at 31 December 2023
Book value
Expected credit
loss rate
Provision for bad and
doubtful debts
(%)
Within 1 year (inclusive) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,362,611.05 5.00 118,130.55
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,362,611.05 118,130.55
As at 31 December 2024
Book value
Expected credit
loss rate
Provision for bad and
doubtful debts
(%)
Over 1 year but within 2 years (inclusive) /H1118 1,430,102.85 20.00 286,020.57
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,430,102.85 286,020.57
APPENDIX I ACCOUNTANTS’ REPORT
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--- page 660 ---
As at 30 September 2025
Book value
Expected credit loss
rate
Provision for bad and
doubtful debts
(%)
Within 1 year (inclusive) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111852,336.25 5.00 2,616.81
Over 2 years but within 3 years
(inclusive) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118589,923.35 50.00 294,961.67
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118642,259.60 297,578.48
(4) Movements of provisions for bad and doubtful debts
Y ear ended 31 December
Nine months
ended
30 September
2022 2023 2024 2025
As at 1 January /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 118,130.55 286,020.57
Additions/(reversals) /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 118,130.55 167,890.02 11,557.91
As at 31 December/30 September /H1118/H1118 – 118,130.55 286,020.57 297,578.48
(5) Five largest debtors by accounts receivable at the end of each reporting period:
As at 31 December 2022, the total amounts of the five largest debtors by accounts receivable of the Company
were RMB874,763,857.49 with no provision for bad and doubtful debts, representing 13.77% of total accounts
receivable.
As at 31 December 2023, the total amounts of the five largest debtors by accounts receivable of the Company
were RMB563,727,257.61 with no provision for bad and doubtful debts, representing 26.46% of total accounts
receivable.
As at 31 December 2024, the total amounts of the five largest debtors by accounts receivable of the Company
were RMB464,394,023.69 with no provision for bad and doubtful debts, representing 31.14% of total accounts
receivable.
As at 30 September 2025, the total amounts of the five largest debtors by accounts receivable of the Company
were RMB390,996,154.34 with no provision for bad and doubtful debts, representing 25.46% of total accounts
receivable.
3 Other receivables
As at 31 December As at 30 September
Note 2022 2023 2024 2025
Dividends receivable /H1118 (1) 3,000,000,000.00 960,262.02 – –
others /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(2) 50,713,922,050.01 42,999,243,128.00 45,710,631,616.32 61,717,182,798.81
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111853,713,922,050.01 43,000,203,390.02 45,710,631,616.32 61,717,182,798.81
APPENDIX I ACCOUNTANTS’ REPORT
– I-182 –


--- page 661 ---
(1) Dividends receivable
Investee
As at 31 December As at 30 September
2022 2023 2024 2025
Xiping Muyuan Livestock
Husbandry Co., Ltd. /H1118/H1118/H1118/H1118/H1118/H1118300,000,000.00 – – –
Guangdong Guangken Muyuan
Livestock Husbandry Co.,
Ltd. /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 960,262.02 – –
Shandong Pingyuan Muyuan
Livestock Husbandry Co.,
Ltd. /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118200,000,000.00 – – –
Nanyang Wolong Muyuan
Breeding Co., Ltd. /H1118/H1118/H1118/H1118/H1118/H1118/H1118500,000,000.00 – – –
Tanghe Muyuan Livestock
Husbandry Co., Ltd. /H1118/H1118/H1118/H1118/H1118/H1118500,000,000.00 – – –
Neixiang Muyuan Modern
Agricultural Complex Co.,
Ltd. /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118200,000,000.00 – – –
Huaxian Muyuan Livestock
Husbandry Co., Ltd. /H1118/H1118/H1118/H1118/H1118/H1118500,000,000.00 – – –
Zhengyang Muyuan Livestock
Husbandry Co., Ltd. /H1118/H1118/H1118/H1118/H1118/H1118250,000,000.00 – – –
Fangcheng Muyuan Livestock
Husbandry Co., Ltd. /H1118/H1118/H1118/H1118/H1118/H1118250,000,000.00 – – –
Taikang Muyuan Livestock
Husbandry Co., Ltd. /H1118/H1118/H1118/H1118/H1118/H1118300,000,000.00 – – –
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,000,000,000.00 960,262.02 – –
(2) Others
(a) The ageing analysis is as follows:
Ageing
As at 31 December As at 30 September
2022 2023 2024 2025
Within 1 year
(inclusive) /H1118/H1118/H1118/H1118/H1118/H111846,957,568,459.85 38,252,823,513.85 41,046,245,884.93 54,926,141,960.81
Over 1 year but
within 2 years
(inclusive) /H1118/H1118/H1118/H1118/H1118/H11183,760,988,653.05 2,673,267,041.14 1,443,511,942.48 3,045,712,779.60
Over 2 years but
within 3 years
(inclusive) /H1118/H1118/H1118/H1118/H1118/H11187,546,102.92 2,083,985,668.25 1,231,228,156.09 1,718,656,492.71
Over 3 years /H1118/H1118/H1118/H1118/H1118/H1118 – 313,900.37 1,990,391,750.37 2,028,395,714.54
Subtotal /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111850,726,103,215.82 43,010,390,123.61 45,711,377,733.87 61,718,906,947.66
Less: Provision for
bad and doubtful
debts /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111812,181,165.81 11,146,995.61 746,117.55 1,724,148.85
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111850,713,922,050.01 42,999,243,128.00 45,710,631,616.32 61,717,182,798.81
The ageing is counted starting from the date when other receivables are recognised.
APPENDIX I ACCOUNTANTS’ REPORT
– I-183 –


--- page 662 ---
(b) Others by counterparty type:
Item
As at 31 December As at 30 September
2022 2023 2024 2025
Other receivables due
from subsidiaries /H1118/H111850,496,369,176.19 42,933,658,891.83 45,710,381,935.63 61,699,626,330.11
Other receivables due
from third parties /H1118 217,552,873.82 65,584,236.17 249,680.69 17,556,468.70
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111850,713,922,050.01 42,999,243,128.00 45,710,631,616.32 61,717,182,798.81
(c) Others by provision method
Category
As at 31 December 2022
Book value
Provision for bad
and doubtful debts
Carrying amountAmount Percentage Amount Percentage
(%) (%)
Collective assessment
– Group 1: receivables due from
subsidiaries within the
consolidation scope /H1118/H1118/H111850,496,369,176.19 99.55 – – 50,496,369,176.19
– Group 2: other receivables /H1118/H1118/H1118/H1118/H1118229,734,039.63 0.45 12,181,165.81 5.30 217,552,873.82
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111850,726,103,215.82 100.00 12,181,165.81 50,713,922,050.01Category
As at 31 December 2023
Book value
Provision for bad
and doubtful debts
Carrying amountAmount Percentage Amount Percentage
(%) (%)
Collective assessment
– Group 1: receivables due from
subsidiaries within the
consolidation scope /H1118/H1118/H111842,933,658,891.83 99.82 – – 42,933,658,891.83
– Group 2: other receivables /H1118/H1118/H1118/H1118/H111876,731,231.78 0.18 11,146,995.61 14.53 65,584,236.17
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111843,010,390,123.61 100.00 11,146,995.61 42,999,243,128.00Category
As at 31 December 2024
Book value
Provision for bad
and doubtful debts
Carrying amountAmount Percentage Amount Percentage
(%) (%)
Collective assessment
– Group 1: receivables due from
subsidiaries within the
consolidation scope /H1118/H1118/H111845,710,381,935.63 100.00 – – 45,710,381,935.63
– Group 2: other receivables /H1118/H1118/H1118/H1118/H1118995,798.24 – 746,117.55 74.93 249,680.69
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111845,711,377,733.87 100.00 746,117.55 45,710,631,616.32
APPENDIX I ACCOUNTANTS’ REPORT
– I-184 –


--- page 663 ---
Category
As at 30 September 2025
Book value
Provision for bad
and doubtful debts
Carrying amountAmount Percentage Amount Percentage
(%) (%)
Collective assessment
– Group 1: receivables due from
subsidiaries within the
consolidation scope /H1118/H1118/H111861,699,626,330.11 100.00 – – 61,699,626,330.11
– Group 2: other receivables /H1118/H1118/H1118/H1118/H111819,280,617.55 – 1,724,148.85 8.94 17,556,468.70
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111861,718,906,947.66 100.00 1,724,148.85 61,717,182,798.81
(d) Movements of provisions for bad and doubtful debts
Stage 1 Stage 2 Stage 3
Total12-month ECL
Lifetime ECL -
Not credit
impaired
Lifetime ECL -
Credit impaired
As at 1 January 2022 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184,077,302.49 – – 4,077,302.49
Transfer to stage 3 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(4,261,137.66) – 4,261,137.66 –
Additions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111812,365,000.98 – – 12,365,000.98
Written-offs /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – (4,261,137.66) (4,261,137.66)
As at 31 December 2022 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111812,181,165.81 – – 12,181,165.81
Transfer to stage 3 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118––––
Reversals /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(1,034,170.20) – – (1,034,170.20)
Written-offs /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118––––
As at 31 December 2023 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111811,146,995.61 – – 11,146,995.61
Transfer to stage 3 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118––––
Reversals /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(10,400,878.06) – – (10,400,878.06)
Written-offs /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118––––
As at 31 December 2024 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118746,117.55 – – 746,117.55
Transfer to stage 3 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118––––
Additions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118978,031.30 – – 978,031.30
Written-offs /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118––––
As at 30 September 2025 /H1118/H1118/H1118/H1118/H1118/H1118/H11181,724,148.85 – – 1,724,148.85
(e) Others categorised by nature:
As at 31 December As at 30 September
2022 2023 2024 2025
Accounts receivable
due from
subsidiaries /H1118/H1118/H1118/H1118/H111850,496,369,176.19 42,933,658,891.83 45,710,381,935.63 61,699,626,330.11
Security deposits /H1118/H1118/H1118229,734,039.63 76,731,231.78 995,798.24 19,213,106.51
Other deposits /H1118/H1118/H1118/H1118/H1118 – – – 67,511.04
Subtotal /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111850,726,103,215.82 43,010,390,123.61 45,711,377,733.87 61,718,906,947.66
Less: Provision for
bad and doubtful
debts /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111812,181,165.81 11,146,995.61 746,117.55 1,724,148.85
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111850,713,922,050.01 42,999,243,128.00 45,710,631,616.32 61,717,182,798.81
APPENDIX I ACCOUNTANTS’ REPORT
– I-185 –


--- page 664 ---
(f) Five largest debtors by other receivables at the end of each reporting period:
As at 31 December 2022, the total amounts of the five largest debtors by other receivables of the Company
were RMB37,990,797,589.30 with no provision for bad and doubtful debts, representing 74.89% of total other
receivables.
As at 31 December 2023, the total amounts of the five largest debtors by other receivables of the Company
were RMB22,950,966,656.96 with no provision for bad and doubtful debts, representing 53.37% of total other
receivables.
As at 31 December 2024, the total amounts of the five largest debtors by other receivables of the Company
were RMB29,908,812,002.58 with no provision for bad and doubtful debts, representing 65.44% of total other
receivables.
As at 30 September 2025, the total amounts of the five largest debtors by other receivables of the Company
were RMB44,402,428,003.21 with no provision for bad and doubtful debts, representing 71.95% of total other
receivables.
4 Inventories
(1) Inventories by category
As at 31 December As at 30 September
2022 2023 2024 2025
Book value
Provision for
impairment of
inventories
Carrying
amount Book value
Provision for
impairment of
inventories
Carrying
amount Book value
Provision for
impairment of
inventories
Carrying
amount Book value
Provision for
impairment of
inventories
Carrying
amount
Raw materials /H1118 132,040,925.41 – 132,040,925.41 124,769,730.59 – 124,769,730.59 115,325,566.91 – 115,325,566.91 110,720,463.82 – 110,720,463.82
Consumable
biological
assets /H1118/H1118/H1118 498,008,181.28 – 498,008,181.28 572,667,050.75 – 572,667,050.75 590,372,866.16 – 590,372,866.16 629,676,278.46 – 629,676,278.46
Total /H1118/H1118/H1118 630,049,106.69 – 630,049,106.69 697,436,781.34 – 697,436,781.34 705,698,433.07 – 705,698,433.07 740,396,742.28 – 740,396,742.28
5 Long-term equity investments
(1) Long-term equity investments by category:
As at 31 December As at 30 September
2022 2023 2024 2025
Book value
Provision for
impairment
Carrying
amount Book value
Provision for
impairment
Carrying
amount Book value
Provision for
impairment
Carrying
amount Book value
Provision for
impairment
Carrying
amount
Investments in
subsidiaries /H111861,115,696,206.68 – 61,115,696,206.68 72,770,740,309.34 – 72,770,740,309.34 82,030,704,690.61 – 82,030,704,690.61 84,667,059,484.10 – 84,6 67,059,484.10
Investments in
associates /H1118/H1118 583,733,246.15 – 583,733,246.15 695,027,473.56 – 695,027,473.56 868,097,830.28 – 868,097,830.28 878,057,729.75 – 878,057,729.75
Total /H1118/H1118/H111861,699,429,452.83 – 61,699,429,452.83 73,465,767,782.90 – 73,465,767,782.90 82,898,802,520.89 – 82,898,802,520.89 85,545,117,213.85 – 85,5 45,117,213.85
APPENDIX I ACCOUNTANTS’ REPORT
– I-186 –


--- page 665 ---
(2) Investments in subsidiaries:
Subsidiary
Balance as at
1 January
2022 Increase Decrease
Other
Changes
Balance as at
31 December
2022 Increase Decrease
Other
Changes
Balance as at
31 December
2023 Increase Decrease
Other
Changes
Balance as at
31 December
2024 Increase Decrease
Other
Changes
Balance as at
30 September
2025
Nanyang Wolong Muyuan Breeding Co., Ltd. /H1118/H1118/H1118/H1118/H1118600,000,000.00 300,000,000.00 – 6,613,738.04 906,613,738.04 – – 5,431,785.36 912,045,523.40 – – 808,242.25 912,853,765.65 – 205,643,264.09 742 ,033.16 707,952,534.72
Dengzhou Muyuan Breeding Co., Ltd. /H1118/H1118/H1118/H1118/H1118/H1118/H1118911,827,985.47 – – 14,711,346.08 926,539,331.55 – – 3,537,226.16 930,076,557.71 – – 314,749.20 930,391,306.91 – – 445,011.58 930,836,318.49
Hubei Zhongxiang Muyuan Breeding Co., Ltd. /H1118/H1118/H1118/H1118/H1118250,000,000.00 – – 22,983,211.66 272,983,211.66 – – 9,856,677.27 282,839,888.93 – – 913,799.48 283,753,688.41 – – 1,191,998.05 284,945,686.46
Shandong Caoxian Muyuan Livestock Husbandry Co., Ltd. /H1118 170,610,071.01 – – 5,773,457.36 176,383,528.37 700,000,000.00 – 3,924,733.08 880,308,261.45 450,000,000.00 – 629,933.25 1,330,938,194.70 – – 5 24,905.81 1,331,463,100.51
Tanghe Muyuan Livestock Husbandry Co., Ltd. /H1118/H1118/H1118/H1118250,000,000.00 500,000,000.00 – 4,397,829.76 754,397,829.76 – – 2,038,425.42 756,436,255.18 – – 56,565.10 756,492,820.28 – – 464,385.58 756,957 ,205.86
Fugou Muyuan Livestock Husbandry Co., Ltd. /H1118/H1118/H1118/H1118/H1118490,899,900.00 – – 4,189,684.63 495,089,584.63 200,000,000.00 – 4,421,285.04 699,510,869.67 – – 574,834.84 700,085,704.51 – – 564,799.14 700,65 0,503.65
Huaxian Muyuan Livestock Husbandry Co., Ltd. /H1118/H1118/H1118/H1118370,000,000.00 500,000,000.00 – 6,296,183.03 876,296,183.03 – – 5,430,084.52 881,726,267.55 – – 559,897.23 882,286,164.78 – – 733,470.02 883,01 9,634.80
Qixian Muyuan Livestock Husbandry Co., Ltd. /H1118/H1118/H1118/H1118/H1118239,984,179.98 – – 5,810,188.13 245,794,368.11 – – 2,697,561.29 248,491,929.40 500,000,000.00 – 326,791.06 748,818,720.46 – – 724,295.52 749,54 3,015.98
Zhengyang Muyuan Livestock Husbandry Co., Ltd. /H1118/H1118/H1118275,209,700.00 – – 8,320,936.18 283,530,636.18 – – 6,771,461.47 290,302,097.65 – – 849,548.58 291,151,646.23 – – 658,782.04 291,810,428.27
Tongxu Muyuan Livestock Husbandry Co., Ltd. /H1118/H1118/H1118/H1118280,000,000.00 – – 1,863,017.04 281,863,017.04 – – 749,815.29 282,612,832.33 – – 103,923.74 282,716,756.07 – – 272,934.07 282,989,690.14
Fangcheng Muyuan Livestock Husbandry Co., Ltd. /H1118/H1118/H1118130,000,000.00 300,000,000.00 – 2,826,004.83 432,826,004.83 – – 1,214,955.16 434,040,959.99 – – 131,627.86 434,172,587.85 – – 206,443.62 434,37 9,031.47
Sheqi Muyuan Livestock Husbandry Co., Ltd. /H1118/H1118/H1118/H1118/H1118390,000,000.00 400,000,000.00 – 9,038,508.42 799,038,508.42 – – 4,473,147.85 803,511,656.27 – – 523,041.53 804,034,697.80 1,000,000,000.00 – 5 48,527.38 1,804,583,225.18
Xihua Muyuan Livestock Husbandry Co., Ltd. /H1118/H1118/H1118/H1118/H1118380,339,000.00 – – 3,300,400.99 383,639,400.99 – – 1,519,319.13 385,158,720.12 – – 163,479.58 385,322,199.70 – – 282,708.43 385,604,908.13
Shangshui Muyuan Livestock Husbandry Co., Ltd. /H1118/H1118/H1118/H1118616,009,000.00 – – 5,360,382.75 621,369,382.75 – – 2,862,180.10 624,231,562.85 – – 245,663.74 624,477,226.59 – – 799,427.34 625,276,653.93
Wenxi Muyuan Livestock Husbandry Co., Ltd. /H1118/H1118/H1118/H1118/H11181,365,152,500.00 – – 10,763,131.34 1,375,915,631.34 – – 6,468,345.58 1,382,383,976.92 – – 696,247.82 1,383,080,224.74 – – 786,066.09 1,383,866, 290.83
Taikang Muyuan Livestock Husbandry Co., Ltd. /H1118/H1118/H1118/H1118464,867,800.00 – – 4,838,277.23 469,706,077.23 – – 2,221,094.93 471,927,172.16 – – 342,739.16 472,269,911.32 – – 330,735.52 472,600,646.84
Dali Muyuan Livestock Husbandry Co., Ltd. /H1118/H1118/H1118/H1118/H1118410,000,000.00 – – 3,194,501.21 413,194,501.21 – – 2,605,466.19 415,799,967.40 150,000,000.00 – 360,893.70 566,160,861.10 – – 512,990.01 566,67 3,851.11
Guangzong Muyuan Livestock Husbandry Co., Ltd. /H1118/H1118/H1118145,409,518.13 – – 9,897,348.50 155,306,866.63 – – 612,448.01 155,919,314.64 – – 154,843.73 156,074,158.37 – – 128,015.70 156,202,174.07
Inner Mongolia Naiman Muyuan Livestock Husbandry
Co., Ltd. /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118346,435,856.97 – – 3,662,605.10 350,098,462.07 – – 1,528,139.97 351,626,602.04 550,000,000.00 – 190,278.62 901,816,880.66 – – 136,999.73 901,95 3,880.39
Xichuan Muyuan Livestock Husbandry Co., Ltd. /H1118/H1118/H1118/H111820,000,000.00 – – – 20,000,000.00 – – 10,570.58 20,010,570.58 – – 14,799.91 20,025,370.49 – – 39,356.81 20,064,727.30
Inner Mongolia Kailu Muyuan Livestock Husbandry
Co., Ltd. /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,569,387,900.00 – – 19,569,510.51 1,588,957,410.51 – – 12,124,975.49 1,601,082,386.00 – – 1,233,232.35 1,602,315,618.35 – – 1,108,106.24 1,603 ,423,724.59
Guantao Muyuan Livestock Husbandry Co., Ltd. /H1118/H1118/H1118/H111882,046,181.83 – – 2,910,844.76 84,957,026.59 – – 968,706.91 85,925,733.50 236,190,000.00 – 34,387.94 322,150,121.44 – – 147,746.39 322,297,867. 83
Liaoning Tieling Muyuan Livestock Husbandry Co., Ltd. /H1118/H1118279,495,326.81 59,960,000.00 – 9,094,446.15 348,549,772.96 500,000,000.00 – 945,873.86 849,495,646.82 604,500,000.00 – 162,431.34 1,454,158 ,078.16 – – 354,873.64 1,454,512,951.80
Anhui Yingshang Muyuan Livestock Husbandry Co., Ltd. /H1118/H1118 22,707,377.50 – – 5,387,104.74 28,094,482.24 – – 2,172,773.98 30,267,256.22 – – 252,204.47 30,519,460.69 550,000,000.00 – 620,449.82 581,139,91 0.51
Dongying Kenli Muyuan Livestock Husbandry Co., Ltd. /H1118/H1118 73,416,618.16 – – 1,367,211.67 74,783,829.83 – – 641,320.82 75,425,150.65 200,000,000.00 – 80,250.81 275,505,401.46 – – 174,683.19 275,680,084. 65
Jiangsu Guannan Muyuan Livestock Husbandry Co., Ltd. /H1118/H1118409,872,782.25 – – 8,293,108.20 418,165,890.45 – – 2,080,732.57 420,246,623.02 – – 25,763.09 420,272,386.11 – – 295,204.54 420,567,590.65
APPENDIX I ACCOUNTANTS’ REPORT
– I-187 –


--- page 666 ---
Subsidiary
Balance as at
1 January
2022 Increase Decrease
Other
Changes
Balance as at
31 December
2022 Increase Decrease
Other
Changes
Balance as at
31 December
2023 Increase Decrease
Other
Changes
Balance as at
31 December
2024 Increase Decrease
Other
Changes
Balance as at
30 September
2025
Baishui Muyuan Livestock Husbandry Co., Ltd. /H1118/H1118/H1118/H1118282,467,551.30 – – 6,248,085.63 288,715,636.93 – – 1,088,560.29 289,804,197.22 145,000,000.00 – 100,050.65 434,904,247.87 – – 189,502.26 435,09 3,750.13
Ningling Muyuan Livestock Husbandry Co., Ltd. /H1118/H1118/H1118/H1118220,000,000.00 300,000,000.00 – 4,812,754.10 524,812,754.10 – – 3,996,250.95 528,809,005.05 – – 186,847.15 528,995,852.20 – – 588,585.24 529,58 4,437.44
Shanxi Y ongji Muyuan Livestock Husbandry Co., Ltd. /H1118/H1118132,919,284.15 – – 9,403,305.78 142,322,589.93 – – 1,511,523.99 143,834,113.92 – – 171,814.64 144,005,928.56 – – 182,099.74 144,188,028.30
Heilongjiang Lindian Muyuan Livestock Husbandry
Co., Ltd. /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,000,000,000.00 – – 9,759,110.83 1,009,759,110.83 – – 6,056,103.46 1,015,815,214.29 – – 492,786.02 1,016,308,000.31 – – 900,157.21 1,017,208,1 57.52
Jilin Tongyu Muyuan Livestock Husbandry Co., Ltd. /H1118/H1118/H1118900,000,000.00 – – 16,102,446.96 916,102,446.96 – – 6,291,360.57 922,393,807.53 – – 623,526.14 923,017,333.67 – – 763,334.75 923,780,668.42
Liaoning Fuxin Muyuan Livestock Husbandry Co., Ltd. /H1118/H1118 39,438,030.43 – – 2,960,394.17 42,398,424.60 – – 1,277,730.87 43,676,155.47 705,710,000.00 – 41,536.64 749,427,692.11 – – 443,283.39 749,870,97 5.50
Heilongjiang Mingshui Muyuan Livestock Husbandry
Co., Ltd. /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118148,581,143.59 – – 7,702,692.76 156,283,836.35 – – 1,084,078.98 157,367,915.33 550,000,000.00 – 7,738.01 707,375,653.34 – – 170,217.54 707,545, 870.88
Mengcheng Muyuan Livestock Husbandry Co., Ltd. /H1118/H1118/H1118229,154,015.07 – – 15,103,466.87 244,257,481.94 – – 2,049,683.45 246,307,165.39 – – 243,574.98 246,550,740.37 – – 354,932.73 246,905,673.10
Xiping Muyuan Livestock Husbandry Co., Ltd. /H1118/H1118/H1118/H1118/H1118355,000,000.00 – – 3,895,723.98 358,895,723.98 – – 1,580,954.52 360,476,678.50 – – 188,488.38 360,665,166.88 – – 205,289.79 360,870,456.67
Inner Mongolia Zhaqi Muyuan Livestock Husbandry
Co., Ltd. /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111841,404,562.42 – – 12,266,157.54 53,670,719.96 – – 1,903,264.14 55,573,984.10 236,000,000.00 – 47,911.54 291,621,895.64 – – 36,846.36 291,658,74 2.00
Henan Fanxian Muyuan Livestock Husbandry Co., Ltd. /H1118/H1118150,000,000.00 – – 2,442,778.58 152,442,778.58 – – 1,132,598.54 153,575,377.12 – – 124,178.91 153,699,556.03 – – 195,577.07 153,895,133.10
Anhui Fengtai Muyuan Livestock Husbandry Co., Ltd. /H1118/H1118291,268,074.23 – – 6,132,948.98 297,401,023.21 – – 2,078,135.16 299,479,158.37 – – 247,590.74 299,726,749.11 – – 405,517.03 300,132,266.14
Shandong Dongming Muyuan Livestock Husbandry
Co., Ltd. /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118427,975,726.50 – – 11,572,141.48 439,547,867.98 – – 2,640,866.99 442,188,734.97 – – 86,873.25 442,275,608.22 – – 284,153.48 442,559,761.70
Shandong Shenxian Muyuan Livestock Husbandry Co., Ltd. /H1118 59,980,792.70 – – 4,060,836.26 64,041,628.96 – – 1,690,026.92 65,731,655.88 600,000,000.00 – 216,480.61 665,948,136.49 – – 391,512.96 666,339,6 49.45
Shanxi Fanshi Muyuan Livestock Husbandry Co., Ltd. /H1118/H1118 63,931,593.21 30,000,000.00 – 3,237,953.81 97,169,547.02 – – 679,903.88 97,849,450.90 – – 120,895.56 97,970,346.46 – – 161,657.36 98,132,003.82
Heze Shan County Muyuan Livestock Husbandry Co., Ltd. /H1118 450,000,000.00 – – 1,891,624.95 451,891,624.95 – – 1,121,983.24 453,013,608.19 – – 116,132.80 453,129,740.99 – – 230,867.85 453,360,608.84
Shangcai Muyuan Livestock Husbandry Co., Ltd. /H1118/H1118/H1118/H111886,040,189.85 – – 14,980,355.11 101,020,544.96 – – 3,943,765.41 104,964,310.37 547,080,000.00 – 203,235.08 652,247,545.45 – – 413,498.59 652,66 1,044.04
Hubei Shishou Muyuan Livestock Husbandry Co., Ltd. /H1118/H1118170,501,381.66 – – 4,542,443.83 175,043,825.49 – – 1,201,204.61 176,245,030.10 400,000,000.00 – 157,822.60 576,402,852.70 – – 267,486.76 576,67 0,339.46
Heze Mudan Muyuan Livestock Husbandry Co., Ltd. /H1118/H1118/H1118250,000,000.00 – – 1,395,371.13 251,395,371.13 – – 462,590.96 251,857,962.09 – – 92,606.16 251,950,568.25 – – 114,857.22 252,065,425.47
Shangqiu Suiyang Muyuan Livestock Husbandry Co., Ltd. /H1118 370,000,000.00 – – 3,325,870.94 373,325,870.94 – – 945,740.26 374,271,611.20 – – 116,429.06 374,388,040.26 – – 184,528.13 374,572,568.39
Anhui Yingquan Muyuan Livestock Husbandry Co., Ltd. /H1118/H1118 25,133,809.08 – – 3,497,097.45 28,630,906.53 – – 1,105,034.32 29,735,940.85 160,000,000.00 – 119,555.14 189,855,495.99 – – 292,460.27 190,147,9 56.26
Anhui Jieshou Muyuan Livestock Husbandry Co., Ltd. /H1118/H1118 23,805,817.79 – – 1,335,966.12 25,141,783.91 – – 584,383.29 25,726,167.20 120,000,000.00 – 71,763.98 145,797,931.18 – – 110,761.01 145,908,692. 19
Henan Muyuan Grain Trade Co., Ltd. /H1118/H1118/H1118/H1118/H1118/H1118/H1118300,000,000.00 – – 8,935,357.90 308,935,357.90 2,000,000,000.00 – 6,057,833.86 2,314,993,191.76 – – 608,053.81 2,315,601,245.57 – – 836,304.31 2,316,437,549.88
Heilongjiang Fuyu Muyuan Livestock Husbandry Co., Ltd. /H1118 122,222,948.87 81,280,000.00 – 1,237,643.66 204,740,592.53 – – 614,378.73 205,354,971.26 430,450,000.00 – 66,705.87 635,871,677.13 – – 117,238 .43 635,988,915.56
Liaoning Yixian Muyuan Livestock Husbandry Co., Ltd. /H1118/H1118140,831,816.04 – – 2,854,380.26 143,686,196.30 – – 876,034.80 144,562,231.10 742,859,000.00 – (46,747.05) 887,374,484.05 – – 115,995.74 887,490 ,479.79
Pingyu Muyuan Livestock Husbandry Co., Ltd. /H1118/H1118/H1118/H1118/H111879,850,126.03 – – 4,411,585.26 84,261,711.29 – – 1,784,350.48 86,046,061.77 366,656,000.00 – 83,079.74 452,785,141.51 – – 221,279.69 453,006,42 1.20
Luyi Muyuan Livestock Husbandry Co., Ltd. /H1118/H1118/H1118/H1118/H1118105,332,178.82 – – 12,506,719.69 117,838,898.51 – – 2,262,590.12 120,101,488.63 – – 144,123.20 120,245,611.83 – – 318,096.14 120,563,707.97
Hengshui Jizhou Muyuan Livestock Husbandry Co., Ltd. /H1118/H1118471,034,324.16 – – 3,261,428.44 474,295,752.60 – – 1,677,935.82 475,973,688.42 – – 142,183.94 476,115,872.36 – – 92,494.07 476,208,366.43
APPENDIX I ACCOUNTANTS’ REPORT
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--- page 667 ---
Subsidiary
Balance as at
1 January
2022 Increase Decrease
Other
Changes
Balance as at
31 December
2022 Increase Decrease
Other
Changes
Balance as at
31 December
2023 Increase Decrease
Other
Changes
Balance as at
31 December
2024 Increase Decrease
Other
Changes
Balance as at
30 September
2025
Heilongjiang Kedong Muyuan Livestock Husbandry
Co., Ltd. /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118320,686,578.54 300,000,000.00 – 2,778,270.47 623,464,849.01 – – 904,973.20 624,369,822.21 150,000,000.00 – 131,019.94 774,500,842.15 – – 214,9 13.66 774,715,755.81
Sixian Muyuan Livestock Husbandry Co., Ltd. /H1118/H1118/H1118/H1118/H111841,034,830.57 – – 5,693,584.46 46,728,415.03 – – 2,481,890.32 49,210,305.35 407,403,000.00 – 272,463.24 456,885,768.59 – – 423,066.34 457,308,8 34.93
Gansu Liangzhou Muyuan Livestock Husbandry Co., Ltd. /H1118 220,000,000.00 250,000,000.00 – 3,416,040.35 473,416,040.35 100,000,000.00 – 1,696,455.92 575,112,496.27 – – (74,859.22) 575,037,637.05 – – 16 6,808.34 575,204,445.39
Shanxi Y uanping Muyuan Livestock Husbandry Co., Ltd. /H1118/H1118 20,538,990.26 – – 2,685,878.20 23,224,868.46 – – 1,121,922.54 24,346,791.00 – – 80,220.76 24,427,011.76 – – 249,295.92 24,676,307.68
Shenzhen Muyuan Digital Technology Co., Ltd. /H1118/H1118/H1118/H111810,000,000.00 – – 10,966,902.26 20,966,902.26 – – 2,293,210.52 23,260,112.78 – – (104,827.04) 23,155,285.74 – – 330,924.29 23,486,210.03
Henan Xinghua Biotechnology Co., Ltd. /H1118/H1118/H1118/H1118/H1118/H1118/H1118100,000,000.00 100,000,000.00 – 13,289,198.34 213,289,198.34 – – 7,035,907.37 220,325,105.71 – – 581,762.65 220,906,868.36 – – 1,609,618.35 222 ,516,486.71
Henan Hongxin Detection Technology Co., Ltd. /H1118/H1118/H1118/H111820,000,000.00 – – 9,509,826.59 29,509,826.59 – – 2,918,199.40 32,428,025.99 – – 116,578.08 32,544,604.07 – – 302,766.91 32,847,370.98
Muyuan International Limited. /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,743,026.06 2,702,865.14 – – 6,445,891.20 4,721,093.18 – – 11,166,984.38 14,818.40 – – 11,181,802.78 14,562.68 – – 11,196,365.46
Nanyang Muyuan Poor Area Livestock Husbandry
Development Co., Ltd. /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,944,489,055.51 – – 3,160,450.78 1,947,649,506.29 1,466,166,747.09 – 1,342,759.89 3,415,159,013.27 – 3,415,290,773.38 131,760.11 – – – – –
Nanyang Muyuan Merchants Industry Development Co., Ltd. /H11181,773,460,715.00 – – – 1,773,460,715.00 – – – 1,773,460,715.00 – 1,773,460,715.00 – – – – – –
Muyuan Meat Co., Ltd. /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,200,000,000.00 – – 64,961,488.50 2,264,961,488.50 300,000,000.00 – 23,563,379.84 2,588,524,868.34 500,000,000.00 – 2,826,164.32 3,091,351 ,032.66 – – 8,586,761.83 3,099,937,794.49
Shandong Pingyuan Muyuan Livestock Husbandry Co., Ltd. /H1118 250,000,000.00 – – 2,033,167.75 252,033,167.75 – – 508,786.30 252,541,954.05 – – 40,203.06 252,582,157.11 – – 131,662.54 252,713,819.65
Y unnan Shilin Muyuan Livestock Husbandry Co., Ltd. /H1118/H1118180,000,000.00 30,000,000.00 – 925,489.67 210,925,489.67 70,000,000.00 – 327,370.32 281,252,859.99 – – 35,733.86 281,288,593.85 – – 82,164.47 2 81,370,758.32
Nanyang Muhua Animal Husbandry Industry Development
Co., Ltd. /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11183,171,388.79 2,000,000,000.00 – 313,126.21 2,003,484,515.00 – – 112,975.27 2,003,597,490.27 – – 13,400.42 2,003,610,890.69 – – 46,100.79 2,003, 656,991.48
Xinji Muyuan Livestock Husbandry Co., Ltd. /H1118/H1118/H1118/H1118/H111820,000,000.00 – – 89,339.19 20,089,339.19 – – 57,381.06 20,146,720.25 – – 4,764.58 20,151,484.83 375,000,000.00 – 21,630.64 395,173,115.47
Xiayi Muyuan Livestock Husbandry Co., Ltd. /H1118/H1118/H1118/H1118/H111850,000,000.00 – – 219,763.05 50,219,763.05 – – 228,100.42 50,447,863.47 – – 22,333.44 50,470,196.91 – – 40,123.76 50,510,320.67
Xiangcheng Muyuan Livestock Husbandry Co., Ltd. /H1118/H1118/H1118110,000,000.00 – – 711,068.75 110,711,068.75 – – 237,742.18 110,948,810.93 – – 35,881.54 110,984,692.47 – – 36,145.31 111,020,837.78
Shandong Muhua Animal Husbandry Industry Development
Co., Ltd. /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118109,998.70 1,700,000,000.00 – 484,695.24 1,700,594,693.94 1,708,266,367.00 – 59,036.19 3,408,920,097.13 – – 10,421.54 3,408,930,518.67 – 3,40 8,930,518.67 – –
Ningjin Muyuan Livestock Husbandry Co., Ltd. /H1118/H1118/H1118/H1118710,000,000.00 200,000,000.00 – 6,649,037.48 916,649,037.48 – – 4,922,324.89 921,571,362.37 – – 398,254.76 921,969,617.13 – – 568,527.60 922,53 8,144.73
Heilongjiang Gannan Muyuan Livestock Husbandry
Co., Ltd. /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111834,684,425.19 – – 1,380,158.79 36,064,583.98 – – 358,113.42 36,422,697.40 685,714,300.00 – (44,552.34) 722,092,445.06 – – 68,878.88 722,161,323 .94
Hubei Muxin Detection Technology Co., Ltd. /H1118/H1118/H1118/H1118/H111810,000,000.00 – – – 10,000,000.00 – 10,000,000.00 – – – – – – – – – –
Zhejiang Linhai Muyuan Livestock Husbandry Co., Ltd. /H1118/H1118 80,000,000.00 70,000,000.00 – – 150,000,000.00 100,000,000.00 – 68,774.75 250,068,774.75 – – 8,337.78 250,077,112.53 – – 38,964.83 250,116,077. 36
Shandong Huimin Muyuan Livestock Husbandry Co., Ltd. /H1118 23,992,913.91 – – 4,008,180.76 28,001,094.67 – – 2,563,786.54 30,564,881.21 634,146,400.00 – 432,062.48 665,143,343.69 3,408,930,518.67 – 438, 363.26 4,074,512,225.62
Shandong Qingyun Muyuan Livestock Husbandry Co., Ltd. /H1118 60,000,000.00 – – 275,600.72 60,275,600.72 – – 222,964.31 60,498,565.03 – – 60,149.26 60,558,714.29 – – 50,944.39 60,609,658.68
Shandong Zouping Muyuan Livestock Husbandry Co., Ltd. /H1118 10,481,218.48 100,000,000.00 – 2,425,549.25 112,906,767.73 – – 790,072.93 113,696,840.66 – – 46,751.56 113,743,592.22 350,000,000.00 – 154,184 .69 463,897,776.91
Anyang Muyuan Livestock Husbandry Co., Ltd. /H1118/H1118/H1118/H111811,258,961.91 – – 150,085.52 11,409,047.43 – – 65,985.02 11,475,032.45 100,000,000.00 – 5,955.94 111,480,988.39 – – 33,583.85 111,514,572.24
Gansu Jingtai Muyuan Livestock Husbandry Co., Ltd. /H1118/H1118/H1118350,000,000.00 180,000,000.00 – 1,352,923.40 531,352,923.40 – – 414,932.08 531,767,855.48 – – 46,452.57 531,814,308.05 – – 86,721.53 531,901,02 9.58
Shandong Linqing Muyuan Livestock Husbandry Co., Ltd. /H1118 20,000,000.00 20,000,000.00 – – 40,000,000.00 – – 96,407.24 40,096,407.24 50,000,000.00 – 17,269.88 90,113,677.12 – – 4,168.91 90,117,846.03
APPENDIX I ACCOUNTANTS’ REPORT
– I-189 –


--- page 668 ---
Subsidiary
Balance as at
1 January
2022 Increase Decrease
Other
Changes
Balance as at
31 December
2022 Increase Decrease
Other
Changes
Balance as at
31 December
2023 Increase Decrease
Other
Changes
Balance as at
31 December
2024 Increase Decrease
Other
Changes
Balance as at
30 September
2025
Liaocheng Chiping Muyuan Livestock Husbandry Co., Ltd. /H1118 40,000,000.00 – – 163,482.29 40,163,482.29 – – 159,901.80 40,323,384.09 – – 15,484.19 40,338,868.28 – – – 40,338,868.28
Qingdao Jimo Muyuan Livestock Husbandry Co., Ltd. /H1118/H1118/H1118230,000,000.00 – – 219,305.00 230,219,305.00 100,000,000.00 – 52,788.17 330,272,093.17 – – 23,821.98 330,295,915.15 – – 30,280.52 330,326,195.6 7
Y anling Muyuan Livestock Husbandry Co., Ltd. /H1118/H1118/H1118/H1118100,000,000.00 – – 425,675.33 100,425,675.33 – – 214,515.44 100,640,190.77 – – 27,990.40 100,668,181.17 – – 42,104.91 100,710,286.08
Nanzhao Muyuan Livestock Husbandry Co., Ltd. /H1118/H1118/H1118/H111830,000,000.00 – – 140,690.88 30,140,690.88 – – 73,514.12 30,214,205.00 – – 10,421.54 30,224,626.54 – – 8,564.85 30,233,191.39
Ruyang Muyuan Livestock Husbandry Co., Ltd. /H1118/H1118/H1118/H111810,000,000.00 – – – 10,000,000.00 – – – 10,000,000.00 – – – 10,000,000.00 – – – 10,000,000.00
Qiqihar Muchen Animal Husbandry Industry Development
Co., Ltd. /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118350,000,000.00 – – – 350,000,000.00 – – – 350,000,000.00 199,610,958.90 549,610,958.90 – – – – – –
Ruzhou Muyuan Livestock Husbandry Co., Ltd. /H1118/H1118/H1118/H1118210,000,000.00 300,000,000.00 – 1,959,047.83 511,959,047.83 – – 765,461.94 512,724,509.77 – – 38,710.88 512,763,220.65 – – 162,330.78 512,925,5 51.43
Fugou Muhua Animal Husbandry Industry Development
Co., Ltd. /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184,485,210.36 1,700,000,000.00 – 1,325,010.70 1,705,810,221.06 1,982,165,548.00 – 399,588.22 3,688,375,357.28 – – 71,465.00 3,688,446,822.28 – – 93,033.57 3,688,539,855.85
Zhecheng Muyuan Livestock Husbandry Co., Ltd. /H1118/H1118/H1118/H1118170,000,000.00 – – 339,459.00 170,339,459.00 – – 92,011.90 170,431,470.90 – – 8,933.02 170,440,403.92 – – 26,507.41 170,466,911.33
Jingzhou Jiangling Muyuan Livestock Husbandry Co., Ltd. /H1118 60,000,000.00 – – 580,647.66 60,580,647.66 – – 125,317.34 60,705,965.00 – – 28,884.62 60,734,849.62 – – 61,149.43 60,795,999.05
Huaxian Muhua Animal Husbandry Industry Development
Co., Ltd. /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,279,424.91 1,900,000,000.00 – 7,778,651.27 1,909,058,076.18 – – 732,434.25 1,909,790,510.43 3,309,740,000.00 – 541.62 5,219,531,052.05 – – 6 2,025.64 5,219,593,077.69
Shandong Linyi Muyuan Livestock Husbandry Co., Ltd. /H1118/H1118200,000,000.00 100,000,000.00 – 328,292.27 300,328,292.27 – – 67,229.18 300,395,521.45 – – 7,146.42 300,402,667.87 – – – 300,402,667.87
Shandong Gaotang Muyuan Livestock Husbandry Co., Ltd. /H1118 10,000,000.00 – – – 10,000,000.00 – – – 10,000,000.00 – – – 10,000,000.00 – – 12,882.98 10,012,882.98
Guangdong Zhanjiang Leizhou Muyuan Livestock Husbandry
Co., Ltd. /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,100,000,000.00 – – 5,766,394.98 1,105,766,394.98 200,000,000.00 – 2,214,809.49 1,307,981,204.47 – – 356,436.28 1,308,337,640.75 – – 527,628. 82 1,308,865,269.57
Nanyang Muyuan Maiming Industry Development Co., Ltd. /H1118 750,000,000.00 562,465,753.42 – – 1,312,465,753.42 – – – 1,312,465,753.42 – 1,312,465,753.42 – – – – – –
Nanyang Muyuan Swine Supply Support Co., Ltd. /H1118/H1118/H1118/H11182,500,000,000.00 – – – 2,500,000,000.00 – – – 2,500,000,000.00 1,254,601,601.70 3,754,601,601.70 – – – – – –
Qingfeng Muyuan Livestock Husbandry Co., Ltd. /H1118/H1118/H1118/H1118270,000,000.00 – – 509,203.56 270,509,203.56 – – 150,547.84 270,659,751.40 – – 18,462.16 270,678,213.56 – – 40,173.50 270,718,387.06
Ningling Muhua Animal Husbandry Industry Development
Co., Ltd. /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,786,527.67 1,500,000,000.00 – 5,904,920.61 1,507,691,448.28 – – 1,196,161.79 1,508,887,610.07 2,245,990,000.00 – 73,996.78 3,754,951,606. 85 – – 121,840.13 3,755,073,446.98
Puyang Muyuan Livestock Husbandry Co., Ltd. /H1118/H1118/H1118/H111850,000,000.00 – – 44,669.60 50,044,669.60 20,000,000.00 – 43,655.24 70,088,324.84 – – 2,977.98 70,091,302.82 – – 41,223.59 70,132,526.41
Gushi Muyuan Livestock Husbandry Co., Ltd. /H1118/H1118/H1118/H1118/H111860,000,000.00 60,000,000.00 – 252,362.14 120,252,362.14 – – 218,222.07 120,470,584.21 – – 34,243.52 120,504,827.73 – – 50,665.51 120,555,493.24
Shandong Dong’emuyuan Livestock Husbandry Co., Ltd. /H1118/H1118100,000,000.00 – – 76,381.38 100,076,381.38 – – – 100,076,381.38 – – – 100,076,381.38 – – 30,266.49 100,106,647.87
Zhenping Muyuan Livestock Husbandry Co., Ltd. /H1118/H1118/H1118/H111870,000,000.00 210,000,000.00 – 1,039,842.18 281,039,842.18 – – 868,412.31 281,908,254.49 – – 131,020.40 282,039,274.89 – – 148,522.70 282,187,7 97.59
Xixia Muyuan Livestock Husbandry Co., Ltd. /H1118/H1118/H1118/H1118/H111840,000,000.00 – – 281,403.50 40,281,403.50 – – 155,111.74 40,436,515.24 – – 10,125.30 40,446,640.54 – – 77,339.57 40,523,980.11
Neixiang Muyuan Modern Agricultural Complex Co., Ltd. /H11182,750,000,000.00 – – 7,524,923.05 2,757,524,923.05 – – 3,593,087.79 2,761,118,010.84 – – 322,028.29 2,761,440,039.13 – – 673,618.12 2,762,113,6 57.25
Haikou Muyuan Livestock Husbandry Co., Ltd. /H1118/H1118/H1118/H1118300,000,000.00 – – 672,674.93 300,672,674.93 – – 170,971.81 300,843,646.74 – – 58,662.54 300,902,309.28 – – 45,617.40 300,947,926.68
Guzhen Muyuan Livestock Husbandry Co., Ltd. /H1118/H1118/H1118/H1118260,000,000.00 – – 1,578,487.82 261,578,487.82 – – 443,946.19 262,022,434.01 – – 66,701.34 262,089,135.35 – – 147,901.14 262,237,036.49
Nanning Xixiangtang Muyuan Livestock Husbandry
Co., Ltd. /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118940,000,000.00 300,000,000.00 – 10,223,548.00 1,250,223,548.00 260,000,000.00 – 3,902,081.17 1,514,125,629.17 – – 357,197.24 1,514,482,826. 41 – – 915,148.87 1,515,397,975.28
Nanyang Musheng Hog Industry Development Co., Ltd. /H1118/H1118530,000,000.00 555,000,000.00 – – 1,085,000,000.00 – – – 1,085,000,000.00 – 1,085,000,000.00 – – – – – –
APPENDIX I ACCOUNTANTS’ REPORT
– I-190 –


--- page 669 ---
Subsidiary
Balance as at
1 January
2022 Increase Decrease
Other
Changes
Balance as at
31 December
2022 Increase Decrease
Other
Changes
Balance as at
31 December
2023 Increase Decrease
Other
Changes
Balance as at
31 December
2024 Increase Decrease
Other
Changes
Balance as at
30 September
2025
Guizhou Dushan Muyuan Livestock Husbandry Co., Ltd. /H1118/H1118180,000,000.00 150,000,000.00 – 577,520.65 330,577,520.65 70,000,000.00 – 429,836.46 401,007,357.11 – – 43,773.58 401,051,130.69 – – 112,365.0 6 401,163,495.75
Nanjing Jiangning Muyuan Livestock Husbandry Co., Ltd. /H11181,010,000,000.00 – – 19,093,282.47 1,029,093,282.47 1,000,000,000.00 – 9,005,987.80 2,038,099,270.27 350,000,000.00 – 1,069,168.87 2,389,16 8,439.14 – – 1,924,972.36 2,391,093,411.50
Neihuang Muyuan Livestock Husbandry Co., Ltd. /H1118/H1118/H1118/H1118730,000,000.00 – – 3,468,770.09 733,468,770.09 – – 1,639,129.88 735,107,899.97 – – 111,282.81 735,219,182.78 – – 314,951.81 735,534,134.59
Sichuan Muyuan Livestock Husbandry Co., Ltd. /H1118/H1118/H1118/H1118200,000,000.00 250,000,000.00 – 3,794,843.22 453,794,843.22 – – 1,363,806.64 455,158,649.86 – – 92,899.63 455,251,549.49 – – 198,857.87 455,450 ,407.36
Shandong Tancheng Muyuan Livestock Husbandry Co., Ltd. /H1118 320,000,000.00 – – 469,881.50 320,469,881.50 – – 562,189.51 321,032,071.01 – – 80,398.93 321,112,469.94 – – 71,768.55 321,184,238.49
Anxiang Muyuan Livestock Husbandry Co., Ltd. /H1118/H1118/H1118/H1118180,000,000.00 – – 716,453.04 180,716,453.04 – – 138,606.64 180,855,059.68 – – 33,053.96 180,888,113.64 – – 59,797.49 180,947,911.13
Nanchang Muyuan Livestock Husbandry Co., Ltd. /H1118/H1118/H1118/H1118100,000,000.00 150,000,000.00 – 1,787,536.74 251,787,536.74 50,000,000.00 – 765,398.48 302,552,935.22 – – (13,395.92) 302,539,539.30 – – 139,9 12.78 302,679,452.08
Beijing Fangshan Muyuan Livestock Husbandry Co., Ltd. /H1118/H1118185,000,000.00 50,000,000.00 – 733,846.57 235,733,846.57 150,000,000.00 – 442,687.88 386,176,534.45 – – 47,643.04 386,224,177.49 – – 36,339.60 386,260,517.09
Zaoyang Muyuan Livestock Husbandry Co., Ltd. /H1118/H1118/H1118/H1118150,000,000.00 – – 754,407.93 150,754,407.93 – – 363,690.68 151,118,098.61 – – 26,502.78 151,144,601.39 – – 65,547.06 151,210,148.45
Zhengzhou Muyuan Digital Technology Co., Ltd. /H1118/H1118/H1118/H111820,000,000.00 – – 2,305,605.95 22,305,605.95 – – 900,143.81 23,205,749.76 – – 44,307.48 23,250,057.24 – – 205,368.02 23,455,425.26
Chaohu Muyuan Livestock Husbandry Co., Ltd. /H1118/H1118/H1118/H1118510,000,000.00 130,000,000.00 – 6,901,725.37 646,901,725.37 – – 7,666,453.12 654,568,178.49 – – 1,062,667.70 655,630,846.19 4,798,467,736.55 – 899,083.30 5,454,997,666.04
Zaozhuang Taierzhuang Muyuan Livestock Husbandry
Co., Ltd. /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118100,000,000.00 50,000,000.00 – 186,257.44 150,186,257.44 – – 280,348.41 150,466,605.85 100,000,000.00 – 38,114.79 250,504,720.64 – – 58,139.44 250,562,860.08
Henan Muyuan Smart Technology Co., Ltd. /H1118/H1118/H1118/H1118/H1118/H1118200,000,000.00 – – 28,420,762.28 228,420,762.28 – – 11,543,703.97 239,964,466.25 – – 1,021,124.22 240,985,590.47 – – 1,035,911.28 242,021,501.7 5
Ruzhou Muyuan Modern Agricultural Complex Co., Ltd. /H1118/H1118150,000,000.00 500,000,000.00 – 1,818,320.19 651,818,320.19 150,000,000.00 – 1,862,243.27 803,680,563.46 – – 260,551.34 803,941,114.80 – – 453 ,800.06 804,394,914.86
Minquan Muyuan Livestock Husbandry Co., Ltd. /H1118/H1118/H1118/H111830,000,000.00 30,000,000.00 – 218,859.28 60,218,859.28 – – 123,321.36 60,342,180.64 – – 27,394.72 60,369,575.36 – – 25,736.63 60,395,311.99
Y ongcheng Muyuan Livestock Husbandry Co., Ltd. /H1118/H1118/H111820,000,000.00 100,000,000.00 – 159,012.66 120,159,012.66 130,000,000.00 – 338,268.21 250,497,280.87 – – 64,617.58 250,561,898.45 – – 79,276.92 250,641,175.37
Qingyuan Yingde Muyuan Livestock Husbandry Co., Ltd. /H1118/H1118 20,000,000.00 – – 241,203.60 20,241,203.60 – – 34,841.52 20,276,045.12 – – 7,742.56 20,283,787.68 – – – 20,283,787.68
Guangdong Heyuan Dongyuan Muyuan Livestock Husbandry
Co., Ltd. /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111820,000,000.00 – – – 20,000,000.00 – – – 20,000,000.00 – – – 20,000,000.00 – – – 20,000,000.00
Henan Muyuan Science and Technology Co., Ltd. /H1118/H1118/H1118/H111820,000,000.00 – – 120,595.70 20,120,595.70 – – 90,934.93 20,211,530.63 – – 8,039.72 20,219,570.35 – – 13,641.01 20,233,211.36
Huojia Muyuan Livestock Husbandry Co., Ltd. /H1118/H1118/H1118/H1118/H111820,000,000.00 – – – 20,000,000.00 – – – 20,000,000.00 – – – 20,000,000.00 – – 4,840.63 20,004,840.63
Y anjin Muyuan Livestock Husbandry Co., Ltd. /H1118/H1118/H1118/H1118/H111820,000,000.00 – – 105,410.50 20,105,410.50 – – 101,719.80 20,207,130.30 – – 11,612.92 20,218,743.22 – – 15,021.86 20,233,765.08
Fujian Zhangpu Muyuan Livestock Husbandry Co., Ltd. /H1118/H1118 20,000,000.00 – – 301,489.20 20,301,489.20 – – – 20,301,489.20 – – – 20,301,489.20 – – – 20,301,489.20
Nanchang Xinjian Muyuan Hog Industry Co., Ltd. /H1118/H1118/H1118/H111820,000,000.00 50,000,000.00 – 89,339.20 70,089,339.20 – – – 70,089,339.20 50,000,000.00 – – 120,089,339.20 – – – 120,089,339.20
Henan Muyuan Hog Breeding Co., Ltd. /H1118/H1118/H1118/H1118/H1118/H1118/H1118515,000,000.00 485,000,000.00 – 6,211,671.90 1,006,211,671.90 – – 3,511,589.92 1,009,723,261.82 – – 403,043.36 1,010,126,305.18 – – 1,393,622. 71 1,011,519,927.89
Tengzhou Muyuan Livestock Husbandry Co., Ltd. /H1118/H1118/H1118/H111820,000,000.00 20,000,000.00 – – 40,000,000.00 – – 72,207.46 40,072,207.46 – – 13,994.76 40,086,202.22 – – 18,412.77 40,104,614.99
Liaoning Muyuan Livestock Husbandry Co., Ltd. /H1118/H1118/H1118/H111820,000,000.00 – – 9,377,992.00 29,377,992.00 – – 7,208,324.27 36,586,316.27 – – 984,577.41 37,570,893.68 – – 672,093.15 38,242,986.83
Huaibei Muhua Animal Husbandry Industry Development
Co., Ltd. /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111854,999.36 1,800,000,000.00 – 557,472.73 1,800,612,472.09 – – 383,651.54 1,800,996,123.63 2,997,460,000.00 – 11,612.92 4,798,467,736.55 – 4,79 8,467,736.55 – –
Chongzuo Jiangzhou Muyuan Livestock Husbandry Co., Ltd. /H1118 – 20,000,000.00 – – 20,000,000.00 – – – 20,000,000.00 – – – 20,000,000.00 – – – 20,000,000.00
APPENDIX I ACCOUNTANTS’ REPORT
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--- page 670 ---
Subsidiary
Balance as at
1 January
2022 Increase Decrease
Other
Changes
Balance as at
31 December
2022 Increase Decrease
Other
Changes
Balance as at
31 December
2023 Increase Decrease
Other
Changes
Balance as at
31 December
2024 Increase Decrease
Other
Changes
Balance as at
30 September
2025
Henan Muyuan Cloud Computing Technology Co., Ltd. /H1118/H1118 – 100,000,000.00 – 117,478.19 100,117,478.19 – – 113,305.19 100,230,783.38 – – 5,955.94 100,236,739.32 – – 23,615.62 100,260,354.94
Henan Muyuan Ecology Environment Technology Co., Ltd. /H1118 – 10,000,000.00 – – 10,000,000.00 – – 540,760.28 10,540,760.28 90,000,000.00 – 58,957.88 100,599,718.16 – – 197,295.48 100,797,013.64
Changyuan Muyuan Livestock Husbandry Co., Ltd. /H1118/H1118/H1118 – – – – – 20,000,000.00 – – 20,000,000.00 – – – 20,000,000.00 – – 1,321.76 20,001,321.76
Henan Muyuan New Energy Industry Development Co., Ltd. /H1118 – – – – – 19,200,000.00 – – 19,200,000.00 80,800,000.00 – – 100,000,000.00 – – – 100,000,000.00
Henan Muyuan Synthetic Biotechnology Co., Ltd. /H1118/H1118/H1118/H1118 – – – – – 100,000,000.00 – – 100,000,000.00 – – – 100,000,000.00 – – 11,687.92 100,011,687.92
Zhengzhou Modern Livestock Husbandry Co., Ltd. /H1118/H1118/H1118 – – – – – – – – – 200,000,000.00 – – 200,000,000.00 300,000,000.00 – 542,990.79 500,542,990.79
Liaoning Fuxin Y uenong Feed Co., Ltd. /H1118/H1118/H1118/H1118/H1118/H1118/H1118 – – – – – – – – – 20,000,000.00 – – 20,000,000.00 – – 6,851.54 20,006,851.54
Hap Grain International Agricultural Trading Pte. Ltd. /H1118/H1118/H1118 – – – – – – – – – 3,668,099.09 – – 3,668,099.09 4,350,000.00 – – 8,018,099.09
Nanyang Wolong Y uenong Feed Co., Ltd. /H1118/H1118/H1118/H1118/H1118/H1118 – – – – – – – – – – – – – 215,643,264.09 – 18,375.78 215,661,639.87
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111841,975,803,329.23 18,506,408,618.56 – 633,484,258.89 61,115,696,206.68 11,400,519,755.27 10,000,000.00 264,524,347.39 72,770,740,309.34 21,123,594,178.0911,890,429,802.40 26,800,005.58 82,030,704,690.61 11,002,406,081.99 8,413,041,519.31 46,990,230.81 84,667,059,484.10
For information about the major subsidiaries of the Company, refer to Note VI.1.
APPENDIX I ACCOUNTANTS’ REPORT
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--- page 671 ---
(3) Investments in associates:
Name of investee
Y ear ended 31 December 2022
As at 1 January
Increase
in capital
Decrease
in capital
Investment
income/(losses)
recognised under
the equity method
Adjustments
to other
comprehensive
income
Other equity
movements
Declared
distribution of
cash dividends
or profits
Provision for
impairment Others
As at
31 December
Balance of
provision for
impairment as
at 31 December
Associates
Henan Longda Muyuan
Meat Co., Ltd. /H1118/H1118/H1118/H1118/H1118102,134,325.13 – – 23,241,990.08 –––– – 125,376,315.21 –
China Securities Jiaotong
Fund Management
Co., Ltd. /H1118/H1118/H1118/H1118/H1118/H1118/H111860,936,787.04 – – (1,138,012.60) –––– – 59,798,774.44 –
Guangdong Guangken
Muyuan Livestock
Husbandry Co., Ltd. /H1118/H111848,499,819.07 71,400,000.00 – 3,700,508.45 –––– – 123,600,327.52 –
Rongtong Nongfa Muyuan
(Chongzhou) Co., Ltd. /H1118 58,829,328.97 – – 13,948,840.86 –––– – 72,778,169.83 –
Rongtong Nongfa Muyuan
(Tangshan) Livestock
Husbandry Co., Ltd. /H1118/H111822,131,137.27 61,250,000.00 – 276,241.70 –––– – 83,657,378.97 –
Rongtong Nongfa Muyuan
(Jianyang) Co., Ltd. /H1118/H111814,710,866.53 44,100,000.00 – 464,598.15 –––– – 59,275,464.68 –
Zhongmu Muyuan (Henan)
Biological
Pharmaceutical
Co., Ltd. /H1118/H1118/H1118/H1118/H1118/H1118/H1118 – 57,600,000.00 – (282,191.95) –––– – 57,317,808.05 –
Henan Lianmu V eterinary
Medicine Co., Ltd. /H1118/H1118/H1118 – 2,000,000.00 – (70,992.55) –––– – 1,929,007.45 –
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118307,242,264.01 236,350,000.00 – 40,140,982.14 –––– – 583,733,246.15 –
APPENDIX I ACCOUNTANTS’ REPORT
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--- page 672 ---
Name of investee
Y ear ended 31 December 2023
As at 1 January
Increase
in capital
Decrease
in capital
Investment
income/(losses)
recognised under
the equity method
Adjustments
to other
comprehensive
income
Other equity
movements
Declared
distribution of
cash dividends
or profits
Provision for
impairment Others
As at
31 December
Balance of
provision for
impairment as
at 31 December
Associates
Henan Longda Muyuan
Meat Co., Ltd. /H1118/H1118/H1118/H1118/H1118125,376,315.21 – – (7,789,778.76) –––– – 1 17,586,536.45 –
China Securities Jiaotong
Fund Management
Co., Ltd. /H1118/H1118/H1118/H1118/H1118/H1118/H111859,798,774.44 – – (5,099,564.88) –––– – 54,699,209.56 –
Guangdong Guangken
Muyuan Livestock
Husbandry Co., Ltd. /H1118/H1118123,600,327.52 81,600,000.00 – (7,930,676.97) – – (960,262.02) – – 196,309,388.53 –
Rongtong Nongfa Muyuan
(Chongzhou) Co., Ltd. /H1118 72,778,169.83 – – (6,467,838.83) –––– – 66,310,331.00 –
Rongtong Nongfa Muyuan
(Tangshan) Livestock
Husbandry Co., Ltd. /H1118/H111883,657,378.97 – – 42,531.16 –––– – 83,699,910.13 –
Rongtong Nongfa Muyuan
(Jianyang) Co., Ltd. /H1118/H111859,275,464.68 – – 282,129.31 –––– – 59,557,593.99 –
Zhongmu Muyuan (Henan)
Biological
Pharmaceutical
Co., Ltd. /H1118/H1118/H1118/H1118/H1118/H1118/H111857,317,808.05 – – 8,168.77 –––– – 57,325,976.82 –
Henan Lianmu V eterinary
Medicine Co., Ltd. /H1118/H1118/H11181,929,007.45 12,000,000.00 – (505,619.71) –––– – 13,423,387.74 –
Nanyang Longyuan New
Energy Technology Co.,
Ltd. /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– 45,000,000.00 – 1,115,139.34 –––– – 46,115,139.34 –
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118583,733,246.15 138,600,000.00 – (26,345,510.57) – – (960,262.02) – – 695,027,473.56 –
APPENDIX I ACCOUNTANTS’ REPORT
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--- page 673 ---
Name of investee
Y ear ended 31 December 2024
As at 1 January
Increase
in capital
Decrease
in capital
Investment
income/(losses)
recognised under
the equity method
Adjustments
to other
comprehensive
income
Other equity
movements
Declared
distribution of
cash dividends
or profits
Provision for
impairment Others
As at
31 December
Balance of
provision for
impairment as
at 31 December
Associates
Henan Longda Muyuan
Meat Co., Ltd. /H1118/H1118/H1118/H1118/H1118117,586,536.45 – – (4,393,194.19) –––– – 1 13,193,342.26 –
China Securities Jiaotong
Fund Management
Co., Ltd. /H1118/H1118/H1118/H1118/H1118/H1118/H111854,699,209.56 – – 713,879.32 –––– – 55,413,088.88 –
Guangdong Guangken
Muyuan Livestock
Husbandry Co., Ltd. /H1118/H1118196,309,388.53 74,800,000.00 – 54,575,252.44 –––– – 325,684,640.97 –
Rongtong Nongfa Muyuan
(Chongzhou) Co., Ltd. /H1118 66,310,331.00 – – 3,318,951.75 –––– – 69,629,282.75 –
Rongtong Nongfa Muyuan
(Tangshan) Livestock
Husbandry Co., Ltd. /H1118/H111883,699,910.13 – – 57,445.81 –––– – 83,757,355.94 –
Rongtong Nongfa Muyuan
(Jianyang) Co., Ltd. /H1118/H111859,557,593.99 – – 106,256.03 –––– – 59,663,850.02 –
Zhongmu Muyuan (Henan)
Biological
Pharmaceutical
Co., Ltd. /H1118/H1118/H1118/H1118/H1118/H1118/H111857,325,976.82 – – 1,722,892.86 –––– – 59,048,869.68 –
Henan Lianmu V eterinary
Medicine Co., Ltd. /H1118/H1118/H111813,423,387.74 36,000,000.00 – (1,695,846.17) –––– – 47,727,541.57 –
Nanyang Longyuan New
Energy Technology
Co., Ltd. /H1118/H1118/H1118/H1118/H1118/H1118/H111846,115,139.34 – – 7,864,718.87 –––– – 53,979,858.21 –
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118695,027,473.56 110,800,000.00 – 62,270,356.72 –––– – 868,097,830.28 –
APPENDIX I ACCOUNTANTS’ REPORT
– I-195 –


--- page 674 ---
Name of investee
Nine months ended 30 September 2025
As at 1 January
Increase
in capital
Decrease
in capital
Investment
(losses)/income
recognised under
the equity method
Adjustments
to other
comprehensive
income
Other equity
movements
Declared
distribution of
cash dividends
or profits
Provision for
impairment Others
As at
30 September
Balance of
provision for
impairment as
at 30 September
Associates
Henan Longda Muyuan
Meat Co., Ltd. /H1118/H1118/H1118/H1118/H1118113,193,342.26 – – (7,575,341.10) –––– – 105,618,001.16 –
China Securities Jiaotong
Fund Management
Co., Ltd. /H1118/H1118/H1118/H1118/H1118/H1118/H111855,413,088.88 – – (1,289,951.85) –––– – 54,123,137.03 –
Guangdong Guangken
Muyuan Livestock
Husbandry Co., Ltd. /H1118/H1118325,684,640.97 – – 47,515,649.64 – – (42,432,549.71) – – 330,767,740.90 –
Rongtong Nongfa Muyuan
(Chongzhou) Co., Ltd. /H1118 69,629,282.75 – – 6,788,780.84 –––– – 76,418,063.59 –
Rongtong Nongfa Muyuan
(Tangshan) Livestock
Husbandry Co., Ltd. /H1118/H111883,757,355.94 – – 106,244.76 –––– – 83,863,600.70 –
Rongtong Nongfa Muyuan
(Jianyang) Co., Ltd. /H1118/H111859,663,850.02 – – 913,470.42 –––– – 60,577,320.44 –
Zhongmu Muyuan (Henan)
Biological
Pharmaceutical
Co., Ltd. /H1118/H1118/H1118/H1118/H1118/H1118/H111859,048,869.68 – – (1,307,095.42) –––– – 57,741,774.26 –
Henan Lianmu V eterinary
Medicine Co., Ltd. /H1118/H1118/H111847,727,541.57 – – (1,846,811.33) –––– – 45,880,730.24 –
Nanyang Longyuan New
Energy Technology
Co., Ltd. /H1118/H1118/H1118/H1118/H1118/H1118/H111853,979,858.21 – – 9,087,503.22 –––– – 63,067,361.43 –
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118868,097,830.28 – – 52,392,449.18 – – (42,432,549.71) – – 878,057,729.75 –
APPENDIX I ACCOUNTANTS’ REPORT
– I-196 –


--- page 675 ---
6 Fixed assets
Plant &
buildings
Machinery &
equipment Motor vehicles Others Total
Cost
As at 1 January 2022 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,406,150,871.39 365,608,057.96 110,498,307.28 143,096,416.99 2,025,353,653.62
Additions /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
- Purchases /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118308,714.50 13,479,705.12 700,529.83 10,257,339.65 24,746,289.10
- Transfers from construction in progress /H1118/H1118129,380,283.53 21,254,841.70 – 37,338,435.61 187,973,560.84
Decreases
- Disposals or written-offs /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111810,156,224.19 13,294,467.94 1,717,197.91 1,465,167.03 26,633,057.07
As at 31 December 2022 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,525,683,645.23 387,048,136.84 109,481,639.20 189,227,025.22 2,211,440,446.49
Additions
- Purchases /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118149,285.00 21,618,653.98 2,405,186.04 7,026,174.11 31,199,299.13
- Transfers from construction in progress /H1118/H1118163,451,444.08 75,591,285.04 – 2,236,999.33 241,279,728.45
Decreases
- Disposals or written-offs /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111830,821,826.63 13,037,332.24 4,376,468.61 2,217,609.38 50,453,236.86
- Others /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – 33,424,016.37 33,424,016.37
As at 31 December 2023 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,658,462,547.68 471,220,743.62 107,510,356.63 162,848,572.91 2,400,042,220.84
Additions
- Purchases /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111864,195.80 14,106,073.62 2,726,792.22 8,923,955.70 25,821,017.34
- Transfers from construction in progress /H1118/H111873,144,195.54 54,305,918.40 – 5,025,842.09 132,475,956.03
Decreases
- Disposals or written-offs /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11188,867,332.10 20,193,518.37 10,057,744.83 4,066,718.35 43,185,313.65
As at 31 December 2024 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,722,803,606.92 519,439,217.27 100,179,404.02 172,731,652.35 2,515,153,880.56
Additions
-Purchases /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118274,168,537.07 106,581,312.50 6,735,349.71 23,042,784.74 410,527,984.02
- Transfers from construction in progress /H1118/H111830,045,174.77 53,809,026.69 – 4,242,042.88 88,096,244.34
Decreases
- Disposals or written-offs /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,042,602.68 23,984,821.81 5,758,237.54 3,023,572.08 34,809,234.11
As at 30 September 2025 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,024,974,716.08 655,844,734.65 101,156,516.19 196,992,907.89 2,978,968,874.81---------- ---------- ---------- ---------- ----------
Accumulated depreciation
As at 1 January 2022 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118716,745,045.03 145,090,064.50 64,728,727.21 61,114,920.82 987,678,757.56
Additions
- Charge for the year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118122,891,496.16 36,126,187.30 11,647,078.16 24,888,027.05 195,552,788.67
- Others /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,083.69 214,379.50 2,045.44 37,921.77 256,430.40
Decreases
- Disposals or written-offs /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11187,659,295.90 8,485,572.93 1,553,337.66 1,108,884.47 18,807,090.96
As at 31 December 2022 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118831,979,328.98 172,945,058.37 74,824,513.15 84,931,985.17 1,164,680,885.67
Additions
- Charge for the year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118137,025,403.49 51,668,196.15 10,323,880.76 23,763,499.06 222,780,979.46
- Others /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11187,158.76 659,359.44 76,779.74 1,264,250.78 2,007,548.72
Decreases
- Disposals or written-offs /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111820,466,298.50 9,721,415.70 3,489,867.83 1,643,653.15 35,321,235.18
- Others /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – – 8,143,754.86 8,143,754.86
APPENDIX I ACCOUNTANTS’ REPORT
– I-197 –


--- page 676 ---
Plant &
buildings
Machinery &
equipment Motor vehicles Others Total
As at 31 December 2023 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118948,545,592.73 215,551,198.26 81,735,305.82 100,172,327.00 1,346,004,423.81
Additions
- Charge for the year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118148,504,318.05 50,761,415.21 8,667,035.67 22,491,572.87 230,424,341.80
- Others /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111813,125.77 283,537.12 48,691.47 142,762.45 488,116.81
Decreases
- Disposals or written-offs /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11185,150,839.16 14,186,166.69 9,420,057.26 3,621,160.67 32,378,223.78
As at 31 December 2024 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,091,912,197.39 252,409,983.90 81,030,975.70 119,185,501.65 1,544,538,658.64
Additions
- Charge for the period /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118112,239,115.90 43,536,769.07 5,974,590.86 19,055,786.23 180,806,262.06
- Others /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111871,978,445.32 30,690,090.85 1,424,851.74 8,376,130.38 112,469,518.29
Decreases
- Disposals or written-offs /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,373,237.38 20,413,518.59 5,306,462.60 2,437,971.17 29,531,189.74
As at 30 September 2025 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,274,756,521.23 306,223,325.23 83,123,955.70 144,179,447.09 1,808,283,249.25
Provision for impairment
As at 1 January 2022 and 31 December 2022,
2023 and 2024 and 30 September 2025 /H1118/H1118/H1118 –––––---------- ---------- ---------- ---------- ----------
Carrying amounts
As at 31 December 2022 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118693,704,316.25 214,103,078.47 34,657,126.05 104,295,040.05 1,046,759,560.82
As at 31 December 2023 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118709,916,954.95 255,669,545.36 25,775,050.81 62,676,245.91 1,054,037,797.03
As at 31 December 2024 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118630,891,409.53 267,029,233.37 19,148,428.32 53,546,150.70 970,615,221.92
As at 30 September 2025 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118750,218,194.85 349,621,409.42 18,032,560.49 52,813,460.80 1,170,685,625.56
7 Short-term loans
As at 31 December As at 30 September
2022 2023 2024 2025
Pledged loans /H1118/H1118/H1118/H1118/H1118341,497,363.88 536,893,347.25 511,539,452.71 126,433,241.80
Secured loans /H1118/H1118/H1118/H1118/H1118354,454,300.00 354,000,000.00 353,501,649.96 –
Guaranteed loans /H1118/H1118/H111812,211,494,115.12 23,179,916,351.00 20,750,061,572.32 22,110,776,127.26
Unsecured loans /H1118/H1118/H1118/H1118130,207,350.00 100,117,638.89 800,595,972.22 2,042,145,750.01
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111813,037,653,129.00 24,170,927,337.14 22,415,698,647.21 24,279,355,119.07
8 Bills payable
As at 31 December As at 30 September
2022 2023 2024 2025
Commercial
acceptance bills /H1118/H11181,448,477,963.98 253,624,379.34 417,775,874.36 –
Bank acceptance
bills /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118877,622,629.60 2,249,535,344.00 1,414,650,000.00 1,603,600,000.00
Letter of credit /H1118/H1118/H1118/H1118150,000,000.00 1,759,287,100.00 3,205,000,000.00 3,017,810,000.00
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,476,100,593.58 4,262,446,823.34 5,037,425,874.36 4,621,410,000.00
APPENDIX I ACCOUNTANTS’ REPORT
– I-198 –


--- page 677 ---
9 Accounts payable
As at 31 December As at 30 September
2022 2023 2024 2025
Payables for goods /H1118/H1118352,932,296.42 443,470,142.95 2,074,660,241.46 2,918,401,152.80
Payables for
construction and
equipment /H1118/H1118/H1118/H1118/H1118/H1118102,246,242.28 157,870,176.86 152,138,257.24 169,635,231.34
Others /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11182,982,456.26 13,895,634.59 36,392,498.61 11,101,397.08
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118458,160,994.96 615,235,954.40 2,263,190,997.31 3,099,137,781.22
10 Other payables
As at 31 December As at 30 September
Note 2022 2023 2024 2025
Dividends
payable /H1118/H1118/H1118 – – – 5,004,404,142.39
Other
payables /H1118/H1118XV .10(1) 74,469,910,811.60 58,266,939,051.17 63,127,896,615.42 78,596,870,428.32
Total /H1118/H1118/H1118/H1118/H1118/H111874,469,910,811.60 58,266,939,051.17 63,127,896,615.42 83,601,274,570.71
(1) Other payables
As at 31 December As at 30 September
2022 2023 2024 2025
Borrowings and
interest /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,000,000,000.00 1,900,000,000.00 – –
Deposits /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118533,424,208.61 617,297,099.89 601,615,696.15 640,732,647.99
Restricted shares
repurchase
obligation /H1118/H1118/H1118/H1118/H1118/H11181,951,628,547.10 772,137,238.85 – 1,048,427,078.64
Reverse factoring /H1118/H1118/H11183,412,867,912.57 5,256,595,474.37 5,273,926,224.89 3,711,357,581.33
Amounts due to
subsidiaries /H1118/H1118/H1118/H1118/H111867,564,513,944.11 49,712,914,979.60 57,243,800,909.59 73,151,108,329.90
Others /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11187,476,199.21 7,994,258.46 8,553,784.79 45,244,790.46
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111874,469,910,811.60 58,266,939,051.17 63,127,896,615.42 78,596,870,428.32
APPENDIX I ACCOUNTANTS’ REPORT
– I-199 –


--- page 678 ---
11 Non-current liabilities due within one year
Non-current liabilities due within one year by category are as follows:
As at 31 December As at 30 September
2022 2023 2024 2025
Long-term loans due
within one year /H1118/H1118/H1118929,376,497.64 1,054,081,570.48 2,110,087,828.46 3,517,082,621.25
Debentures payable
due within one
year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118281,939,281.77 28,787,116.42 43,297,338.18 44,477,759.62
Long-term payables
due within one
year /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118– – 16,131,129.24 16,143,341.15
Lease liabilities due
within one year /H1118/H1118/H111811,303,422.64 28,251,335.43 29,028,698.15 37,123,586.27
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11181,222,619,202.05 1,111,120,022.33 2,198,544,994.03 3,614,827,308.29
12 Long- term loans
As at 31 December As at 30 September
Note 2022 2023 2024 2025
Guaranteed
loans /H1118/H1118/H1118/H1118(i) 2,275,576,806.40 3,834,057,934.05 7,297,917,121.76 8,963,972,484.84
Unsecured
loans /H1118/H1118/H1118/H1118 54,481,247.51 43,033,309.64 – 790,114,111.11
Subtotal /H1118/H1118/H1118/H1118 2,330,058,053.91 3,877,091,243.69 7,297,917,121.76 9,754,086,595.95
Less: Long-
term loans
due within
one year /H1118/H1118 929,376,497.64 1,054,081,570.48 2,110,087,828.46 3,517,082,621.25
Total /H1118/H1118/H1118/H1118/H1118/H11181,400,681,556.27 2,823,009,673.21 5,187,829,293.30 6,237,003,974.70
Notes:
(i) The guaranteed loans were guaranteed by Mr. Qin Yinglin and Ms. Qian Ying. As at 31 December 2022,
2023 and 2024 and 30 September 2025, the range of interest rates of the guaranteed loans were 3.85%
— 5.23%, 3.20% — 4.98%, 3.13% — 4.63% and 2.25% — 3.15%, respectively.
APPENDIX I ACCOUNTANTS’ REPORT
– I-200 –


--- page 679 ---
13 Debentures payable
(1) Debentures payable
As at 31 December As at 30 September
2022 2023 2024 2025
20 Muyuan MTN001 /H1118 120,000,000.00 – – –
20 Muyuan MTN002 /H1118 140,000,000.00 – – –
25 Muyuan MTN001 /H1118 – – – 1,000,000,000.00
25 Muyuan MTN002 /H1118 – – – 500,000,000.00
25 Muyuan MTN003 /H1118 – – – 500,000,000.00
Convertible bonds
(Muyuan
convertible bonds) /H1118 9,543,909,100.00 9,543,554,900.00 9,543,193,500.00 9,543,035,900.00
Undue interest
payable /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111821,939,281.77 28,787,116.42 43,297,338.18 44,477,759.62
Interest adjustment /H1118/H1118(622,631,385.23) (336,754,091.92) (77,649,808.66) 95,162,917.00
Subtotal /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11189,203,216,996.54 9,235,587,924.50 9,508,841,029.52 11,682,676,576.62
Less: Debentures
payable due within
one year /H1118/H1118/H1118/H1118/H1118/H1118/H1118281,939,281.77 28,787,116.42 43,297,338.18 44,477,759.62
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11188,921,277,714.77 9,206,800,808.08 9,465,543,691.34 11,638,198,817.00
(2) Details of debentures payable (excluding other financial instruments classified as financial liabilities, such as
preference shares and perpetual bonds):
During the Track Record Period, basic information of debentures payable of the Company:
Debenture Face value Nominal interest rate
Issuance
date Issuance amount
Maturity
period
Poverty alleviation corporate
bonds (19 Muyuan 01) /H1118/H1118/H1118
800,000,000.00 7.00% 22 January
2019
792,964,000.00 3 years
20 Muyuan MTN001 /H1118/H1118/H1118/H1118/H1118500,000,000.00 The first year 4.11%
The second year 4.11%
The third year 4.50%
22 April
2020
496,250,000.00 2+1 years
20 Muyuan MTN002 /H1118/H1118/H1118/H1118/H1118300,000,000.00 4.50% 28 May
2020
298,920,000.00 2+1 years
Convertible bonds (Muyuan
convertible bonds) /H1118/H1118/H1118/H1118/H1118
9,550,000,000.00 The first year 0.20%
The second year 0.40%
The third year 0.80%
The fourth year 1.20%
The fifth year 1.50%
The sixth year 2.00%
16 August
2021
8,510,799,604.63 6 years
25 Muyuan MTN001 /H1118/H1118/H1118/H1118/H11181,000,000,000.00 2.40% 15 January
2025
995,900,000.00 2 years
25 Muyuan MTN002 /H1118/H1118/H1118/H1118/H1118500,000,000.00 2.30% 17 April
2025
498,200,000.00 2 years
25 Muyuan MTN003 /H1118/H1118/H1118/H1118/H1118500,000,000.00 2.15% 22 July
2025
498,400,000.00 2 years
APPENDIX I ACCOUNTANTS’ REPORT
– I-201 –


--- page 680 ---
During the Track Record Period, movement of debentures payable of the Company:
Y ear ended 31 December 2022
Debenture
As at
1 January
Interest at
face value
Amortisation of
discounts or
premium
Repayment
during the year
Conversion
during the
year
As at 31
December
Default
(Y/N)
Poverty alleviation
corporate bonds (19
Muyuan 01) /H1118/H1118/H1118/H1118/H1118853,592,490.57 1,886,695.92 563,613.51 856,042,800.00 – – N
20 Muyuan MTN001 /H1118/H1118 512,433,127.48 10,048,767.12 1,811,119.16 400,550,000.00 – 123,743,013.76 N
20 Muyuan MTN002 /H1118/H1118 307,510,131.27 9,125,753.46 626,855.00 173,500,000.00 – 143,762,739.73 N
Convertible bonds
(Muyuan convertible
bonds) /H1118/H1118/H1118/H1118/H1118/H1118/H11188,632,982,867.38 26,309,925.56 301,607,117.24 19,097,767.13 6,090,900.00 8,935,711,243.05 N
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111810,306,518,616.70 47,371,142.06 304,608,704.91 1,449,190,567.13 6,090,900.00 9,203,216,996.54
Y ear ended 31 December 2023
Debenture
As at
1 January
Interest at
face value
Amortisation of
discounts or
premium
Repayment
during the year
Conversion
during the
year
As at 31
December
Default
(Y/N)
20 Muyuan MTN001 /H1118/H1118 123,743,013.76 1,656,986.24 – 125,400,000.00 – – N
20 Muyuan MTN002 /H1118/H1118 143,762,739.73 2,537,260.27 – 146,300,000.00 – – N
Convertible bonds
(Muyuan convertible
bonds) /H1118/H1118/H1118/H1118/H1118/H1118/H11188,935,711,243.05 52,528,691.47 285,856,676.64 38,174,418.40 334,268.26 9,235,587,924.50 N
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11189,203,216,996.54 56,722,937.98 285,856,676.64 309,874,418.40 334,268.26 9,235,587,924.50
Y ear ended 31 December 2024
Debenture
As at
1 January
Interest at
face value
Amortisation of
discounts or
premium
Repayment
during the year
Conversion
during the
year
As at 31
December
Default
(Y/N)
Convertible bonds
(Muyuan convertible
bonds) /H1118/H1118/H1118/H1118/H1118/H1118/H11189,235,587,924.50 90,859,141.86 259,098,467.82 76,347,552.00 356,952.66 9,508,841,029.52 N
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11189,235,587,924.50 90,859,141.86 259,098,467.82 76,347,552.00 356,952.66 9,508,841,029.52
Nine months ended 30 September 2025
Debenture As at 1 January
Issuance during
the period
Interest at
face value
Amortisation of
discounts or
premium
Repayment
during the
period
Conversion
during the
period
As at
30 September
Default
(Y/N)
25 Muyuan MTN001 /H1118/H1118/H1118/H1118/H1118 – 995,900,000.00 18,000,000.00 1,537,499.97 – – 1,015,437,499.97 N
25 Muyuan MTN002 /H1118/H1118/H1118/H1118/H1118 – 498,200,000.00 5,749,999.98 450,000.00 – – 504,399,999.98 N
25 Muyuan MTN003 /H1118/H1118/H1118/H1118/H1118 – 498,400,000.00 2,687,500.00 200,000.00 – – 501,287,500.00 N
Convertible bonds (Muyuan
convertible bonds) /H1118/H1118/H1118/H1118/H11189,508,841,029.52 – 89,265,784.05 178,120,830.47 114,522,713.45 153,353.92 9,661,551,576.67 N
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11189,508,841,029.52 1,992,500,000.00 115,703,284.03 180,308,330.44 114,522,713.45 153,353.92 11,682,676,576.62
APPENDIX I ACCOUNTANTS’ REPORT
– I-202 –


--- page 681 ---
14 Revenue and operating costs
(1) Revenue and operating costs
Y ear ended 31 December Nine months ended 30 September
2022 2023 2024 2024 2025
Income Cost Income Cost Income Cost Income Cost Income Cost
(unaudited) (unaudited)
Principal activities /H1118/H1118/H1118/H1118/H11187,403,855,956.51 6,739,622,421.76 4,662,641,761.90 4,453,371,912.52 3,418,200,704.87 2,635,983,351.77 2,394,593,702.18 1,877,228,978.4 2 2,517,914,342.82 2,006,512,794.70
Other operating activities /H1118/H11181,118,685,390.58 535,026,471.65 583,311,815.38 577,343,823.08 254,580,176.16 250,976,540.53 247,661,572.71 245,272,451.86 21,851,379.85 15,549,903.26
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11188,522,541,347.09 7,274,648,893.41 5,245,953,577.28 5,030,715,735.60 3,672,780,881.03 2,886,959,892.30 2,642,255,274.89 2,122,501,430.2 8 2,539,765,722.67 2,022,062,697.96
Including:
Revenue from contracts
with customers /H1118/H1118/H1118/H1118/H11188,522,541,347.09 7,274,648,893.41 5,245,953,577.28 5,030,715,735.60 3,672,780,881.03 2,886,959,892.30 2,642,255,274.89 2,122,501,430.2 8 2,539,765,722.67 2,022,062,697.96
Other income /H1118/H1118/H1118/H1118/H1118/H1118/H1118 ––––––––––
APPENDIX I ACCOUNTANTS’ REPORT
– I-203 –


--- page 682 ---
15 Investment income
Y ear ended 31 December Nine months ended 30 September
2022 2023 2024 2024 2025
(unaudited)
Income from long-term
equity investments
accounted for using the
cost method /H1118/H1118/H1118/H1118/H1118/H1118/H11184,198,797,788.27 4,436,516,872.51 5,216,609,407.81 2,442,179,489.67 9,159,622,757.68
Income/(losses) from long-
term equity investments
accounted for using the
equity method /H1118/H1118/H1118/H1118/H1118/H111840,140,982.14 (26,345,510.57) 62,270,356.72 28,036,220.98 52,392,449.18
Others /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(208,545.78) 14,999,586.01 27,179,833.96 11,736,995.53 24,431,349.41
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11184,238,730,224.63 4,425,170,947.95 5,306,059,598.49 2,481,952,706.18 9,236,446,556.27
XVI. EXTRAORDINARY GAINS AND LOSSES
Y ear ended 31 December Nine months ended 30 September
2022 2023 2024 2024 2025
(unaudited)
Disposal gains or losses of
non-current assets /H1118/H1118/H1118/H1118/H1118(205,535,819.86) (388,083,149.81) (949,101,528.54) (724,536,975.43) (865,997,643.43)
Government grants
recognised in profit or loss
(other than government
grants closely related to
the business of the
Company, and in a fixed
or quantified amount in
conformity with the
common standards of the
government) /H1118/H1118/H1118/H1118/H1118/H1118/H1118399,789,050.00 175,768,051.24 188,334,829.64 127,732,692.28 96,314,869.06
Changes in fair value of
financial assets and
liabilities held for trading,
and disposal of financial
assets and liabilities held
for trading, other than
those held for effective
hedging related to normal
operations /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118981,964.72 15,590,657.97 27,646,661.79 3,334,170.07 39,559,831.51
Other non-operating income
and expenses other than
the items above /H1118/H1118/H1118/H1118/H1118/H111854,447,383.86 (60,218,581.23) (159,120,373.63) (169,153,560.49) 15,505,175.38
Other items that qualify as
extraordinary gains and
losses /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H11188,343,696.62 12,393,003.69 7,707,941.33 5,446,652.84 6,435,659.90
Sub-total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118258,026,275.34 (244,550,018.14) (884,532,469.41) (757,177,020.73) (708,182,107.58)
Less: Tax effect /H1118/H1118/H1118/H1118/H1118/H1118/H111814,564,794.73 5,518,033.14 3,640,822.99 2,205,724.06 4,884,461.30
Effect on non-controlling
interests after taxation /H1118/H1118 6,628,017.78 (13,050,150.45) (22,578,106.28) (19,840,017.18) (18,593,973.61)
Total /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118236,833,462.83 (237,017,900.83) (865,595,186.12) (739,542,727.61) (694,472,595.27)
APPENDIX I ACCOUNTANTS’ REPORT
– I-204 –


--- page 683 ---
XVII. RETURN ON EQUITY AND EARNINGS PER SHARE
In accordance with Guidelines on the Compilation of Information Disclosure Documents by Companies that
Offer Securities to the Public No. 9 — Calculation and Disclosure of Return on Equity and Earnings Per Share (2010
revised) issued by the CSRC and relevant accounting standards, the Group’s return on equity and earnings per share
are calculated as follows:
Y ear ended 31 December 2022
Weighted average
return on equity (%)
Basic earnings
per share
Diluted earnings
per share
Net profit attributable to the Company’s
ordinary shareholders /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111821.01% 2.49 2.45
Net profit excluding extraordinary gains
and losses attributable to the Company’s
ordinary shareholders /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111820.63% 2.44 2.40
Y ear ended 31 December 2023
Weighted average
return on equity (%)
Basic earnings
per share
Diluted earnings
per share
Net profit attributable to the Company’s
ordinary shareholders /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(6.38)% (0.79) (0.79)
Net profit excluding extraordinary gains
and losses attributable to the Company’s
ordinary shareholders /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118(6.03)% (0.75) (0.75)
Y ear ended 31 December 2024
Weighted average
return on equity (%)
Basic earnings
per share
Diluted earnings
per share
Net profit attributable to the Company’s
ordinary shareholders /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111825.10% 3.30 3.24
Net profit excluding extraordinary gains
and losses attributable to the Company’s
ordinary shareholders /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111826.31% 3.46 3.40
Nine months ended 30 September 2025
Weighted average
return on equity (%)
Basic earnings
per share
Diluted earnings
per share
Net profit attributable to the Company’s
ordinary shareholders /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111819.26% 2.74 2.69
Net profit excluding extraordinary gains
and losses attributable to the Company’s
ordinary shareholders /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111820.16% 2.87 2.82
Nine months ended 30 September 2024 (unaudited)
Weighted average
return on equity (%)
Basic earnings
per share
Diluted earnings
per share
Net profit attributable to the Company’s
ordinary shareholders /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111815.36% 1.94 1.91
Net profit excluding extraordinary gains
and losses attributable to the Company’s
ordinary shareholders /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111816.44% 2.07 2.04
SUBSEQUENT FINANCIAL STATEMENTS
No audited financial statements have been prepared by the Company and its subsidiaries in respect of any
period subsequent to 30 September 2025.
APPENDIX I ACCOUNTANTS’ REPORT
– I-205 –


--- page 684 ---
The following information does not form part of the Accountants’ Report received from ଭ
ה(౷ஷΥྫ) (KPMG Huazhen LLP), the Company’ s reporting
accountants, as set out in Appendix I to this prospectus, and is included herein for illustrative
purposes only. The unaudited pro forma financial information should be read in conjunction
with the section headed “Financial Information” in this prospectus and the Accountants’
Report set out in Appendix I to this prospectus.
A. UNAUDITED PRO FORMA STATEMENT OF ADJUSTED CONSOLIDATED NET
TANGIBLE ASSETS
The following unaudited pro forma statement of adjusted consolidated net tangible assets
of the Group is prepared in accordance with Rule 4.29 of the Listing Rules and is set out below
to illustrate the effect of the offering by the Company of its H Shares (the “Global Offering”)
on the consolidated net tangible assets attributable to shareholders of the Company as at
30 September 2025 as if the Global Offering had taken place on 30 September 2025.
This unaudited pro forma statement of adjusted consolidated net tangible assets has been
prepared for illustrative purposes only and because of its hypothetical nature, it may not give
a true picture of the financial position of the Group had the Global Offering been completed
as at 30 September 2025 or at any future date.
Consolidated net
tangible assets
attributable to
shareholders of
the Company as
of 30 September
2025 (1)
Estimated net
proceeds from
the Global
Offering
(2) (4)
Unaudited pro
forma adjusted
consolidated net
tangible assets
attributable to
shareholders of
the Company
Unaudited pro forma
adjusted consolidated net
tangible assets per Share (3)
RMB RMB RMB RMB HK$ (4)
Based on an offer price of
HK$39 per H Share /H1118/H1118/H111875,708,907,799.31 9,391,301,643.29 85,100,209,442.60 15.02 16.73
Notes:
(1) The consolidated net tangible assets attributable to shareholders of the Company as at 30 September
2025 is arrived at after (i) deducting intangible assets of RMB1,205,944,342.61; and (ii) adjusting the
share of intangible assets attributable to non-controlling interests of RMB44,521,394.51 from the
consolidated total equity attributable to shareholders of the Company of RMB76,870,330,747.41 as at
30 September 2025, which is extracted from the Accountants’ Report set out in Appendix I to this
prospectus.
(2) The estimated net proceeds from the Global Offering are based on the offer prices of HK$39 per H
Share, and the issuance of 273,951,400 H Shares, after deduction of the underwriting fees and other
related expenses paid or payable by the Company (excluding the listing expenses charged to profit or
loss during the Track Record Period), and do not take into account any H Shares which may be issued
upon the exercise of the Over-allotment Option.
APPENDIX II UNAUDITED PRO FORMA FINANCIAL INFORMATION
– II-1 –


--- page 685 ---
(3) The unaudited pro forma adjusted consolidated net tangible assets per Share is arrived at after
adjustments referred to in the preceding paragraphs and on the basis that 5,667,135,906 Shares (being
5,462,771,029 Shares in issue as at 30 September 2025, deducting 69,586,523 treasury shares held by
the Company as at 30 September 2025 and adding 273,951,400 H Shares to be issued pursuant to the
Global Offering) were in issue immediately following the completion of the Global Offering, but do not
take into account any H Shares which may be issued upon the exercise of the Over-allotment Option.
(4) The estimated net proceeds from the Global Offering and the unaudited pro forma adjusted consolidated
net tangible assets per Share are converted from or into Hong Kong dollars (the “HK$”) with the PBOC
rate of RMB1 to HK$1.1138 prevailing on the Latest Practicable Date. No representation is made that
HK$ amounts have been, could have been or may be converted into RMB, or vice versa, at that rate or
at any other rate.
(5) No adjustment has been made to reflect any trading result or other transactions of our Group entered into
subsequent to 30 September 2025.
APPENDIX II UNAUDITED PRO FORMA FINANCIAL INFORMATION
– II-2 –


--- page 686 ---
B. REPORT OF THE UNAUDITED PRO FORMA FINANCIAL INFORMATION
The following is the text of a report received from the reporting accountants,ࣈ
ה(౷ஷΥྫ) (KPMG Huazhen LLP), in respect of the Group’ s pro forma
financial information for the purpose in this prospectus.
INDEPENDENT REPORTING ACCOUNTANTS’ ASSURANCE REPORT ON THE
COMPILATION OF PRO FORMA FINANCIAL INFORMATION
To the Directors of Muyuan Foods Co., Ltd.
We have completed our assurance engagement to report on the compilation of pro forma
financial information of Muyuan Foods Co., Ltd. (ʮ̡) (the “Company”)
and its subsidiaries (collectively the “Group”) by the directors of the Company (the
“Directors”) for illustrative purposes only. The unaudited pro forma financial information
consists of the unaudited pro forma statement of adjusted consolidated net tangible assets as
at 30 September 2025 and related notes as set out in Part A of Appendix II to the prospectus
dated 29 January 2026 (the “Prospectus”) issued by the Company. The applicable criteria on
the basis of which the Directors have compiled the pro forma financial information are
described in Part A of Appendix II to the Prospectus.
The pro forma financial information has been compiled by the Directors to illustrate the
impact of the proposed offering of the H Shares of the Company (the “Global Offering”) on
the Group’s financial position as at 30 September 2025 as if the Global Offering had taken
place at 30 September 2025. As part of this process, information about the Group’s financial
position as at 30 September 2025 has been extracted by the Directors from the Group’s
historical financial information included in the Accountants’ Report as set out in Appendix I
to the Prospectus.
Directors’ Responsibilities for the Pro Forma Financial Information
The Directors are responsible for compiling the pro forma financial information in
accordance with paragraph 4.29 of the Rules Governing the Listing of Securities on The Stock
Exchange of Hong Kong Limited (the “Listing Rules”) and with reference to Accounting
Guideline 7 “Preparation of Pro Forma Financial Information for Inclusion in Investment
Circulars” (“AG 7”) issued by the Hong Kong Institute of Certified Public Accountants
(“HKICPA”).
Our Independence and Quality Management
We have complied with the independence and other ethical requirements of the Code of
Ethics for Professional Accountants issued by the HKICPA, which is founded on fundamental
principles of integrity, objectivity, professional competence and due care, confidentiality and
professional behaviour.
APPENDIX II UNAUDITED PRO FORMA FINANCIAL INFORMATION
– II-3 –


--- page 687 ---
Our firm applies Hong Kong Standard on Quality Management 1 “Quality Management
for Firms that Perform Audits or Reviews of Financial Statements, or Other Assurance or
Related Services Engagements”, which requires the firm to design, implement and operate a
system of quality management including policies or procedures regarding compliance with
ethical requirements, professional standards and applicable legal and regulatory requirements.
Reporting Accountants’ Responsibilities
Our responsibility is to express an opinion, as required by paragraph 4.29(7) of the
Listing Rules, on the pro forma financial information and to report our opinion to you. We do
not accept any responsibility for any reports previously given by us on any financial
information used in the compilation of the pro forma financial information beyond that owed
to those to whom those reports were addressed by us at the dates of their issue.
We conducted our engagement in accordance with Hong Kong Standard on Assurance
Engagements (“HKSAE”) 3420 “Assurance Engagements to Report on the Compilation of Pro
Forma Financial Information Included in a Prospectus” issued by the HKICPA. This standard
requires that the reporting accountants plan and perform procedures to obtain reasonable
assurance about whether the Directors have compiled the pro forma financial information in
accordance with paragraph 4.29 of the Listing Rules, and with reference to AG 7 issued by the
HKICPA.
For purpose of this engagement, we are not responsible for updating or reissuing any
reports or opinions on any historical financial information used in compiling the pro forma
financial information, nor have we, in the course of this engagement, performed an audit or
review of the financial information used in compiling the pro forma financial information.
The purpose of pro forma financial information included in an investment circular is
solely to illustrate the impact of a significant event or transaction on unadjusted financial
information of the Group as if the event had occurred or the transaction had been undertaken
at an earlier date selected for purposes of the illustration. Accordingly, we do not provide any
assurance that the actual outcome of events or transactions as at 30 September 2025 would
have been as presented.
A reasonable assurance engagement to report on whether the pro forma financial
information has been properly compiled on the basis of the applicable criteria involves
performing procedures to assess whether the applicable criteria used by the Directors in the
compilation of the pro forma financial information provide a reasonable basis for presenting
the significant effects directly attributable to the event or transaction, and to obtain sufficient
appropriate evidence about whether:
 the related pro forma adjustments give appropriate effect to those criteria; and
 the pro forma financial information reflects the proper application of those
adjustments to the unadjusted financial information.
APPENDIX II UNAUDITED PRO FORMA FINANCIAL INFORMATION
– II-4 –


--- page 688 ---
The procedures selected depend on the reporting accountants’ judgement, having regard
to the reporting accountants’ understanding of the nature of the Group, the event or transaction
in respect of which the pro forma financial information has been compiled, and other relevant
engagement circumstances.
The engagement also involves evaluating the overall presentation of the pro forma
financial information.
We believe that the evidence we have obtained is sufficient and appropriate to provide a
basis for our opinion.
Our procedures on the pro forma financial information have not been carried out in
accordance with attestation standards or other standards and practices generally accepted in the
United States of America, auditing standards of the Public Company Accounting Oversight
Board (United States) or any overseas standards and accordingly should not be relied upon as
if they had been carried out in accordance with those standards and practices.
We make no comments regarding the reasonableness of the amount of net proceeds from
the issuance of the Company’s shares, the application of those net proceeds, or whether such
use will actually take place as described in the section headed “Future Plans and Use of
Proceeds” in the Prospectus.
Opinion
In our opinion:
(a) the pro forma financial information has been properly compiled on the basis stated;
(b) such basis is consistent with the accounting policies of the Group, and
(c) the adjustments are appropriate for the purposes of the pro forma financial information as
disclosed pursuant to paragraph 4.29(1) of the Listing Rules.
KPMG Huazhen LLP
8th Floor, KPMG Tower
Oriental Plaza
1 East Chang An Avenue
Beijing, China
29 January 2026
APPENDIX II UNAUDITED PRO FORMA FINANCIAL INFORMATION
– II-5 –


--- page 689 ---
The estimate of the consolidated net profit for the year ended December 31, 2025 is set
out in this appendix and in the paragraph headed “Profit estimate for the year ended December
31, 2025” under the section headed “Financial information” in this prospectus.
A. PROFIT ESTIMATE FOR THE YEAR ENDED DECEMBER 31, 2025
The Directors have prepared the estimate of the consolidated net profit for the year ended
December 31, 2025 (the “Profit Estimate”) based on the audited consolidated results of our
Group for the nine months ended September 30, 2025, the unaudited consolidated results based
on the management accounts of our Group for the three months ended December 31, 2025. The
Profit Estimate has been prepared on a basis consistent in all material respects with the
accounting policies currently adopted by the Group as set out in Note II to the Accountants’
Report set out in Appendix I to this prospectus.
We have prepared the following profit estimate for the year ended December 31, 2025.
Estimated consolidated net profit for the
year ended December 31, 2025 /H1118/H1118/H1118/H1118/H1118/H1118/H1118
Not less than RMB15.1 billion
APPENDIX IIA PROFIT ESTIMATE
– IIA-1 –


--- page 690 ---
B. LETTER FROM THE REPORTING ACCOUNTANTS
The following is the text of a letter, prepared for the inclusion in this prospectus, received
from KPMG Huazhen LLP , the reporting accountants of our Company, in relation to our
Group’s profit estimate for the year ended December 31, 2025.
8th Floor
KPMG Tower
Oriental Plaza
1 East Chang An Avenue
Beijing
29 January 2026
The Board of Directors
Muyuan Foods Co., Ltd.
Morgan Stanley Asia Limited
CITIC Securities (Hong Kong) Limited
Goldman Sachs (Asia) L.L.C
Dear Sirs,
Muyuan Foods Co., Ltd. (“the Company”)
Profit Estimate for Y ear Ended 31 December 2025
We refer to the estimate of consolidated net profit for the year ended 31 December 2025
(“the Profit Estimate”) set forth in the section headed “Appendix IIA — Profit Estimate” in the
prospectus of the Company dated 29 January 2026 (“the Prospectus”).
Directors’ Responsibilities
The Profit Estimate has been prepared by the directors of the Company based on the
audited consolidated results of the Company and its subsidiaries (collectively referred to as
“the Group”) for the nine months ended 30 September 2025, the unaudited consolidated results
based on the management accounts of the Group for the three months ended 31 December
2025.
The Company’s directors are solely responsible for the Profit Estimate.
APPENDIX IIA PROFIT ESTIMATE
– IIA-2 –


--- page 691 ---
Our Independence and Quality Management
We have complied with the independence and other ethical requirements of the Code of
Ethics for Professional Accountants issued by the Hong Kong Institute of Certified Public
Accountants (“HKICPA”), which is founded on fundamental principles of integrity, objectivity,
professional competence and due care, confidentiality and professional behaviour.
Our firm applies Hong Kong Standard on Quality Management (HKSQM) 1 “Quality
Management for Firms that Perform Audits or Reviews of Financial Statements, or Other
Assurance or Related Services Engagements”, which requires the firm to design, implement
and operate a system of quality management including policies or procedures regarding
compliance with ethical requirements, professional standards and applicable legal and
regulatory requirements.
Reporting Accountants’ Responsibilities
Our responsibility is to express an opinion on the accounting policies and calculations of
the Profit Estimate based on our procedures. We conducted our engagement in accordance with
Hong Kong Standard on Investment Circular Reporting Engagements 500 “Reporting on Profit
Forecasts, Statements of Sufficiency of Working Capital and Statements of Indebtedness” and
with reference to Hong Kong Standard on Assurance Engagements 3000 (Revised) “Assurance
Engagements Other Than Audits or Reviews of Historical Financial Information” issued by the
HKICPA. Those standards require that we plan and perform our work to obtain reasonable
assurance as to whether, so far as the accounting policies and calculations are concerned, the
Company’s directors have properly compiled the Profit Estimate in accordance with the bases
adopted by the directors and as to whether the Profit Estimate is presented on a basis consistent
in all material respects with the accounting policies normally adopted by the Group. Our work
is substantially less in scope than an audit conducted in accordance with Hong Kong Standards
on Auditing issued by the HKICPA. Accordingly, we do not express an audit opinion.
Opinion
In our opinion, so far as the accounting policies and calculations are concerned, the Profit
Estimate has been properly compiled in accordance with the bases adopted by the directors as
set out in Appendix IIA of the Prospectus and is presented on a basis consistent in all material
respects with the accounting policies normally adopted by the Group as set out in our
accountants’ report dated 29 January 2026, the text of which is set out in Appendix I of the
Prospectus.
Y ours faithfully,
KPMG Huazhen LLP
APPENDIX IIA PROFIT ESTIMATE
– IIA-3 –


--- page 692 ---
C. LETTER FROM THE JOINT SPONSORS
The Board of Directors
Muyuan Foods Co., Ltd. (ʮ̡)
January 29, 2026
Dear Sirs,
We refer to the profit estimate of the net profit of Muyuan Foods Co., Ltd. (the
“Company ”) and its subsidiaries (collectively, the “ Group ”) for the year ended December 31,
2025 (the “ Profit Estimate ”) set forth in the section headed “Financial Information — Profit
Estimate for the Y ear Ended December 31, 2025” in the prospectus of the Company dated
January 29, 2026 (the “ Prospectus ”).
The Profit Estimate, for which you as the Directors of the Company are solely responsible
for, has been prepared by the Directors of the Company based on the audited consolidated
results of the Group for the nine months ended September 30, 2025, the unaudited consolidated
results based on the management accounts of the Group for the three months ended December
31, 2025.
We have discussed with you the bases made by the Directors of the Company as set forth
in Appendix IIA to the Prospectus, upon which the Profit Estimate has been made. We have also
considered, and relied upon, the letter dated January 29, 2026 addressed to you and us from
KPMG Huazhen LLP , the reporting accountants of the Company (the “ Reporting
Accountants ”), regarding the accounting policies and calculations upon which the Profit
Estimate has been made.
On the basis of the information comprising the Profit Estimate and on the basis of the
accounting policies and calculations adopted by you and reviewed by the Reporting
Accountants, we are of the opinion that the Profit Estimate, for which you as the Directors of
the Company are solely responsible for, has been made after due and careful enquiry.
Y ours faithfully,
For and on behalf of
Morgan Stanley Asia
Limited
For and on behalf of
CITIC Securities
(Hong Kong) Limited
For and on behalf of
Goldman Sachs (Asia)
L.L.C.
APPENDIX IIA PROFIT ESTIMATE
– IIA-4 –


--- page 693 ---
TAXATION ON HOLDERS OF SECURITIES
Income tax and capital gains tax of holders of the H Shares is subject to the laws and
practices of the PRC and of jurisdictions in which holders of the H Shares are resident or
otherwise subject to tax. The following summary of certain relevant taxation provisions is
based on current laws and practices, has not taken into account the expected change or
amendment to the relevant laws or policies and does not constitute any opinion or advice. Such
discussion does not deal with all possible tax consequences relating to an investment in the
H Shares, nor considers specific circumstances of any particular investor, as some of such
circumstances may be subject to special rules. Accordingly, you should consult your own tax
adviser regarding the tax consequences of investing in the H Shares. Such discussion is based
on laws and relevant interpretations in effect as of the Latest Practicable Date, such laws and
relevant interpretations may change and may have retrospective effect.
The discussion does not address any inland taxation aspects of the PRC other than income
tax, capital gains tax and profits tax, sales tax/V A T, stamp duty and estate duty. Prospective
investors are urged to consult their financial advisers regarding the tax consequences of owning
and disposing of the H Shares in the PRC and other regions.
INLAND TAXATION OF THE PRC
Dividend Tax
Individual Investors
Pursuant to the Individual Income Tax Law of the PRC (੻೼
)( “ Individual Income Tax Law ”), which was most recently amended by the NPCSC on
August 31, 2018 and became effective on January 1, 2019, and the Implementation Regulations
of Individual Income Tax Law of the PRC (ૢԷ),
which was most recently amended by the State Council on December 18, 2018 and became
effective on January 1, 2019, dividends distributed by PRC enterprises to individual investors
are subject to individual income tax levied at the flat rate of 20%. Pursuant to the Notice on
Relevant Issues Regarding Differentiated Individual Income Tax Policies for Listed
Companies’ Dividends and Bonuses (ഄϞᗫਪ
) promulgated on September 7, 2015, shares of listed companies acquired by an
individual through public offering and transfer in the market with a holding period of more than
one year will be temporarily exempted from individual income tax; with a holding period of
not more than one month, the entire amount of dividends will be subject to individual income
tax; with a holding period of more than one month but not more than one year, 50% of the
amount of dividends will be subject to individual income tax; and individual income tax will
be levied at a uniform tax rate of 20% on the income mentioned above.
APPENDIX III TAXATION AND FOREIGN EXCHANGE
– III-1 –


--- page 694 ---
Pursuant to the Arrangement between the Mainland of China and the Hong Kong Special
Administrative Region for the Avoidance of Double Taxation and the Prevention of Fiscal
Evasion with respect to Taxes on Income (ᅄ೼
τર) (the “ Arrangement for the Avoidance of Double Taxation and the
Prevention of Fiscal Evasion with respect to Taxes on Income ”) signed between Mainland
China and Hong Kong on August 21, 2006, the PRC government may levy on dividends paid
by a PRC company to a Hong Kong resident (including natural person and legal entity), but the
amount of tax shall not exceed 10% of the total amount of dividends payable. If a Hong Kong
resident directly holds 25% or more of equity interest in a PRC company and the Hong Kong
resident is the beneficial owner of the dividends and meets other conditions, such tax shall not
exceed 5% of the total amount of dividends payable by the PRC company. The Fifth Protocol
to the Arrangement between the Mainland of China and the Hong Kong Special Administrative
Region for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with
Respect to Taxes on Income (ᅄ೼ձԣ˟ਊ
ࣣ֛the “ Fifth Protocol ”) issued by the SA T and became effective on
December 6, 2019 provides that such provisions shall not apply to arrangements or transactions
made for one of the primary purposes of obtaining such tax benefits.
Enterprise Investors
Pursuant to the Enterprise Income Tax Law of the PRC (੻೼
) last amended by NPCSC on December 29, 2018 and became effective on the same date
and the Implementation Regulations of the Enterprise Income Tax Law of the PRC ( ʕശɛ
ૢԷ) last amended by the State Council on December 6, 2024
and became effective on January 20, 2025 (the “ Implementation Regulations of Enterprise
Income Tax Law ”), if a non-resident enterprise does not have an establishment or premise in
the PRC or has an establishment or premise in the PRC but its PRC-sourced income has no real
connection with such establishment or premise, it is generally subject to a lower enterprise
income tax rate at 10% on PRC-sourced income (including dividends distributed by the shares
of a PRC resident enterprise issued and listed in Hong Kong). The aforesaid income tax
payable by non-resident enterprises are deducted at source, where the payer of the income shall
have the obligation to withhold the income tax from the amount payable to the non-resident
enterprise. Such withholding tax may be reduced or exempted pursuant to an applicable treaty
for the avoidance of double taxation.
Pursuant to the Circular of the State Administration of Tax on Issues Relating to the
Withholding and Remitting of Enterprise Income Tax by PRC Resident Enterprises
on Dividends Distributed to Overseas Non-Resident Enterprise Shareholders of H Shares
(͏ΆุΣྤ̮ Hஷ
) issued by the SA T on November 6, 2008 and became effective on the same date, a
PRC-resident enterprise must withhold enterprise income tax at a uniform rate of 10% on the
dividends paid to non-PRC resident enterprise holders of overseas listed H Shares when
distributing dividends for the years of 2008 and beyond. The Approval Reply on Issues
Concerning Enterprise Income Tax Levied on Dividends Paid by B Shares acquired by
Non-resident Enterprises (͏Άุ՟੻ Bҭ
APPENDIX III TAXATION AND FOREIGN EXCHANGE
– III-2 –


--- page 695 ---
ᔧ) issued by the SA T on July 24, 2009 and became effective on the same date further
provided that when a PRC-resident enterprise with shares issued by public offering and listed
overseas (A Shares, B Shares and overseas shares) distributes dividends for the years of 2008
and beyond to non-PRC resident enterprises, it must withhold enterprise income tax at a
uniform rate of 10%. The above tax rate may be further modified in accordance with tax
treaties or agreements (if applicable) entered into between the PRC and the relevant countries
or regions.
Pursuant to the Arrangement for the Avoidance of Double Taxation and the Prevention of
Fiscal Evasion with respect to Taxes on Income, the PRC government may levy on dividends
paid by a PRC company to a Hong Kong resident (including natural person and legal entity),
but such tax shall not exceed 10% of the total amount of dividends payable. If a Hong Kong
resident directly holds 25% or more of equity interest in a PRC company and the Hong Kong
resident is the beneficial owner of the dividends and meets other conditions, such tax shall not
exceed 5% of the total amount of dividends payable by the PRC company. The Fifth Protocol
provides that such provisions shall not apply to arrangements or transactions made for one of
the primary purposes of obtaining such tax benefits.
In accordance with applicable regulations, we intend to withhold tax at the rate of 10%
on dividends paid to non-PRC resident enterprise shareholders of H Shares, including the
HKSCC Nominees. Non-PRC resident enterprises that are entitled to preferential tax rates for
tax reduction or exemption under applicable income tax treaties are required to apply to the tax
authorities in the PRC for a refund of the amount of the withholding tax in excess of the
applicable treaty rate, and such refunds are subject to verification by the tax authorities of the
PRC.
Taxation of Gains on Share Transfer
Individual Investors
Pursuant to the Individual Income Tax Law and its Implementation Regulations,
individuals who disposes of equity interest in a PRC resident enterprise are subject to
individual income tax levied on the gains on disposal at the tax rate of 20%. According to the
Circular on Individual Income Tax Continues to be Temporarily Exempted over Income of
Individuals from the Transfer of Shares (ٙ
) issued by the MOF and the SA T on March 30, 1998, with effect from January 1, 1997,
income of individuals derived from transfer of the shares of listed companies continues to be
exempted from individual income tax. Pursuant to the Announcement on the List of Individual
Income Tax Preferential Policies Continues To Be Effective issued by the MOF and the SA T
(ʮѓ) on December
29, 2018, the Circular on Individual Income Tax Continues to be Temporarily Exempted over
Income of Individuals from the Transfer of Shares shall continue to be effective.
APPENDIX III TAXATION AND FOREIGN EXCHANGE
– III-3 –


--- page 696 ---
Enterprise Investors
According to the Enterprise Income Tax Law and its Implementation Regulations, if a
non-PRC resident enterprise does not have an establishment or premise in the PRC or has an
establishment or premise in the PRC but its PRC-sourced income has no real connection with
such establishment or premise, it is generally subject to enterprise income tax at the lower tax
rate of a 10% on PRC-sourced income, including gains derived from the disposal of equity
interests in a PRC resident enterprise. Such income tax payable by the non-resident enterprise
will be deducted at source, where the payer of the income shall have the obligation to withhold
income tax from each payment or amount payable to the non-resident enterprise. Such
withholding tax may be reduced or exempted pursuant to relevant tax treaties or agreements on
avoidance of double taxation.
Shenzhen-Hong Kong Stock Connect Tax Policies
Pursuant to the Notice Regarding the Relevant Tax Policies for the Pilot Program of the
Shenzhen-Hong Kong Stock Connect (݁
) which became effective on December 5, 2016, for dividends and bonuses received
by Mainland individual investors from investing in H Shares listed on the Hong Kong Stock
Exchange through the Shenzhen-Hong Kong Stock Connect, the H-share companies shall make
an application to the China Securities Depository and Clearing Corporation (“ CSDC ”) so that
the register of Mainland individual investors will be provided by CSDC for the H-share
companies shall withhold individual income tax at the rate of 20% for those investors.
Pursuant to the Announcement on the Relevant Individual Income Tax Policies for
Continuing the Implementation of Stock Connect Mechanisms in Shanghai-Hong Kong and
Shenzhen-Hong Kong Stock Markets and the Mutual Recognition of Funds between the
Mainland and Hong Kong (ʝᑌʝஷዚՓձʫήၾ
ʮѓ) which became effective on August 21, 2023, the
income of Mainland individual investors derived from the price differences on transfer of
shares listed on the Hong Kong Stock Exchange through the Shenzhen-Hong Kong Stock
Connect will continue to be temporarily exempted from individual income tax.
Pursuant to the Notice Regarding the Relevant Tax Policies for the Pilot Program of the
Shenzhen-Hong Kong Stock Connect, the income of Mainland enterprise investors derived
from the price differences on transfer of shares listed on the Hong Kong Stock Exchange
through the Shenzhen-Hong Kong Stock Connect will be included in their total revenue and
subject to enterprise income tax in accordance with the law. The income derived from
dividends and bonuses received by Mainland enterprise investors from investing in shares
listed on the Hong Kong Stock Exchange through the Shenzhen-Hong Kong Stock Connect will
be included in their total revenue and subject to enterprise income tax in accordance with the
law. However, if the Mainland resident enterprise receives the income of dividends and
bonuses after holding the H Shares continuously for at least 12 months, the relevant income tax
shall be exempted in accordance with the law. Regarding the aforesaid income derived from
dividends and bonuses received by Mainland enterprise investors, the H-share companies will
not withhold income tax on dividends and bonuses for Mainland enterprise investors, the
Mainland enterprise investors shall report and pay the income tax by themselves.
APPENDIX III TAXATION AND FOREIGN EXCHANGE
– III-4 –


--- page 697 ---
Stamp Duty
According to the Stamp Duty Law of the PRC ()
promulgated by the NPCSC on June 10, 2021 and became effective on July 1, 2022, the
provisions of the Stamp Duty Law of the PRC are not applicable to non-PRC domestic
investors when they purchase and dispose of H Shares offshore.
Estate Duty
As of today, no estate duty is levied in Mainland China under the PRC laws.
PRINCIPAL TAXATION OF THE COMPANY IN THE PRC
Enterprise Income Tax
Pursuant to the Enterprise Income Tax Law of the PRC (੻೼
) promulgated by the NPC on March 16, 2007 and last amended by the NPCSC and became
effective on December 29, 2018 and the Implementation Regulations of the Enterprise Income
Tax Law of the PRC (ૢԷ) issued by the State Council
on December 6, 2007 and last amended on December 6, 2024, enterprises are divided into
resident enterprises and non-resident enterprises. The PRC resident enterprises are required to
pay enterprise income tax at the tax rate of 25%. Income of enterprises engaging in livestock
and poultry raising and preliminary processing of agricultural products are exempted from
enterprise income tax. Enterprises qualified as “High and New Technology Enterprises” are
entitled to a reduced enterprise income tax rate of 15%.
Value-added Tax (V AT)
Pursuant to the Provisional Regulations of the PRC on V alue-added Tax ( ʕശɛ͏΍
೼ᅲБૢԷ) (promulgated by the State Council on December 13, 1993, last
amended and implemented on November 19, 2017), the Notice of the MOF and the SA T on
Adjusting the V A T Rate ()
(promulgated by the MOF and the SA T on April 4, 2018 and became effective on May 1, 2018),
and the Announcement on the Relevant Policies for Deepening the V alue-added Tax Reform
(ʮѓ) published by the MOF, SA T and the GACC (issued
on March 20, 2019 and became effective on April 1, 2019), companies being general taxpayers
are subject to V A T rates of 13%, 9%, 6% and 0% respectively, depending on their businesses,
among which the self-produced agricultural products sold by agricultural producers are
exempted from V A T.
APPENDIX III TAXATION AND FOREIGN EXCHANGE
– III-5 –


--- page 698 ---
Pursuant to the Circular on the Issues of Exemption of V A T for Feed Products from the
MOF and the SA T ()
(promulgated by the MOF and the SA T on July 12, 2001 and implemented on August 1, 2001),
single bulk feed, mixed feed, formulated feed, compound premix and feed concentrate products
are exempted from V A T.
FOREIGN EXCHANGE ADMINISTRATION
The lawful currency of the PRC is Renminbi. The State Administration of Foreign
Exchange (“SAFE”) is responsible for the administration of all matters relating to foreign
exchange, including the enforcement of foreign exchange regulations.
Pursuant to the Administrative Regulations on Foreign Exchange of the PRC ( ʕശɛ
͏΍ձ਷̮ි၍ଣૢԷ) last amended by the State Council on August 5, 2008 and became
effective on the same date, subject to compliance with certain procedural rules, payment for
current account items with foreign exchange (such as trading items of goods, services and
recurrent transfers) are not required to obtain prior approval from SAFE. On the contrary,
conversion of Renminbi under capital account items into foreign currencies and remittance
outward from the PRC, such as repayment of loans denominated in foreign currencies or
remittance of foreign currencies into the PRC under capital account items, or offshore entities
provide capital contribution or foreign currency loans to PRC entities, are required to obtain
approval or registration by the competent administrative authority.
According to the Regulations for the Administration of Settlement, Sale and Payment of
Foreign Exchange () promulgated by the People’s Bank of
China (“PBOC”) on June 20, 1996 and became effective on July 1, 1996, the remaining
restrictions on foreign exchange convertibility under current account items are removed, but
the existing restrictions on foreign exchange transactions under capital account items are
retained.
According to the relevant laws and regulations in the PRC, PRC enterprises (including
foreign investment enterprises) which need foreign exchange for current account item
transactions may, without the approval of the foreign exchange administrative authorities,
effect payment through foreign exchange accounts opened at the designated foreign exchange
bank, on the strength of valid transaction receipts and proof. Foreign investment enterprises
which need foreign exchange for the distribution of profits to their shareholders and PRC
enterprises which, in accordance with regulations, are required to pay fixed dividends to their
shareholders in foreign exchange may, on the strength of resolutions of the board of directors
on the distribution of profits, effect payment from their foreign exchange accounts or effect
exchange and payment at the designated foreign exchange bank.
APPENDIX III TAXATION AND FOREIGN EXCHANGE
– III-6 –


--- page 699 ---
According to the Decisions of the State Council on the Matters of Canceling and
Adjusting a Batch of Administrative Approval Items (ᄲҭ
) promulgated by the State Council on October 23, 2014 and became
effective on the same date, the administrative approval requirement of the SAFE and its
branches for the remittance and settlement of the proceeds raised from the overseas listing into
RMB domestic accounts have been cancelled.
According to the Notice of the State Administration of Foreign Exchange on Issues
Concerning the Foreign Exchange Administration of Overseas Listing (׵
) promulgated by the SAFE on December 26, 2014, a
domestic company shall, within 15 business days from the date of the end of its overseas listing
and offering, register the overseas listing with the local branch office of state administration
of foreign exchange at the place of its establishment. The proceeds raised from an overseas
listing of a domestic company may be remitted to the domestic account or deposited in an
overseas account, but the use of the proceeds shall be consistent with the content of the
prospectus and other public disclosure documents.
Pursuant to the Circular on Further Simplifying and Improving the Foreign Exchange
Administration Policies for Direct Investment (݁
) promulgated by the SAFE in February 2015 and further amended in December
2019, eligible banks may, on behalf of the SAFE, directly handle the foreign exchange
registration of overseas direct investment transactions, while the SAFE and its branches will,
through the banks, exercise indirect supervision over the foreign exchange registration of direct
investments.
According to the Notice of the State Administration of Foreign Exchange of the PRC on
Revolutionizing and Regulating the Administrative Policies for Foreign Exchange Settlement
of Capital Account Items ()
promulgated and implemented by the SAFE on June 9, 2016 and amended in December 2023,
voluntary foreign exchange settlement of foreign exchange income from capital account items
refer to the relevant policies where voluntary foreign exchange settlement have been clearly
implemented on the foreign exchange income from capital account items (including the
repatriation of foreign exchange capital funds, foreign debt principal amounts and proceeds of
capital raised by overseas listing), the foreign exchange settlement of which may be handled
at banks according to the actual needs of domestic institutions. The ratio of voluntary foreign
exchange settlement of foreign exchange income from capital account items of domestic
institutions is 100% for the time being, the above ratio may be adjusted by SAFE in a timely
manner according to the international receipts and payments conditions.
APPENDIX III TAXATION AND FOREIGN EXCHANGE
– III-7 –


--- page 700 ---
This Appendix summarizes the principal PRC laws, regulations and policies which are
relevant to the Company’s operations and business. Laws and regulations relating to taxation
in the PRC are discussed separately in “Appendix III — Taxation and Foreign Exchange”. The
principal objective of this summary is to provide potential investors with an overview of the
principal laws and regulatory provisions applicable to the Company. This summary is not
intended to include all data which is important to the potential investors. For a discussion of
laws and regulations which are relevant to the Company’s business, see section headed
“Regulatory Overview” in this document.
THE PRC LEGAL SYSTEM
The PRC legal system is based on the PRC Constitution () (the
“Constitution ”), which was last amended and came into effect on March 11, 2018, and is made
up of written laws, administrative regulations, local regulations, autonomous regulations,
separate regulations, rules and regulations of departments of the State Council, rules and
regulations of local governments, special administrative region law and international treaties
and other regulatory documents signed by the PRC government. Court decisions do not
constitute legally binding precedents, although they are used for the purposes of judicial
reference and guidance.
According to the Constitution and the Legislation Law of the PRC ( ʕശɛ͏΍ձ਷ͭ
) (the “ Legislation Law ”), which was last amended on March 13, 2023 and became
effective on March 15, 2023, the NPC and the NPCSC are empowered to exercise the
legislative power of the State. The NPC has the power to formulate and amend basic laws
governing state organs, criminal and civil matters, and other matters. The NPCSC is
empowered to formulate and amend laws other than those required to be enacted by the NPC
and to supplement and amend any parts of laws enacted by the NPC during the adjournment
of the NPC, provided such supplements and amendments are not in conflict with the basic
principles of such laws.
The State Council is the highest organ of state administration and has the power to
formulate administrative regulations based on the Constitution and laws. The people’s
congresses of provinces, autonomous regions and municipalities and their respective standing
committees may formulate local regulations based on the specific circumstances and actual
needs of their respective administrative areas, provided that such local regulations do not
contravene any provision of the Constitution, laws or administrative regulations. The people’s
congresses of cities divided into districts and their standing committees may formulate local
regulations on matters such as urban and rural construction and management, ecological
civilization construction, historical and cultural protection, grassroots governance based on the
specific circumstances and actual needs of such cities, provided that such local regulations do
not contravene any provision of the Constitution, laws, administrative regulations and local
regulations of such provinces or autonomous regions. Where laws have other stipulations on
matters of local regulations formulated by cities divided into districts, such stipulations shall
prevail. Such local regulations will become enforceable after being reported to and approved
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--- page 701 ---
by the standing committees of the people’s congresses of the relevant provinces or autonomous
regions. The standing committees of the people’s congresses of the provinces or autonomous
regions examine the legality of local regulations submitted for approval, and such approval
should be granted within four months if they are not in conflict with the Constitution, laws,
administrative regulations and local regulations of such provinces or autonomous regions.
People’s congresses of national autonomous areas have the power to enact autonomous
regulations and separate regulations in light of the political, economic and cultural
characteristics of the ethnic groups in the areas concerned.
The ministries, commissions of the State Council, PBOC, NAO and institutions with
administrative functions directly under the State Council, and other institutions stipulated by
law may formulate rules and regulations within the jurisdiction of their respective departments
based on the laws and the administrative regulations, decisions and rulings of the State
Council.
The Constitution has supreme legal authority and no laws, administrative regulations,
local regulations, autonomous regulations or separate regulations or rules may contravene the
Constitution. The authority of laws is greater than that of administrative regulations, local
regulations and rules. The authority of administrative regulations is greater than that of local
regulations and rules. The authority of the rules enacted by the people’s governments of the
provinces and autonomous regions is greater than that of the rules enacted by the people’s
governments of the cities divided into districts within their respective administrative regions.
The NPC has the power to alter or annul any inappropriate laws enacted by its standing
committee, and to annul any autonomous regulations and separate regulations which have been
approved by the NPCSC but which contravene the Constitution and the Legislation Law; the
NPCSC has the power to annul administrative regulations that contravene the Constitution and
laws, to annul local regulations that contravene the Constitution, laws and administrative
regulations, and to annul autonomous regulations and separate regulations which have been
approved by the standing committees of the people’s congresses of the relevant provinces,
autonomous regions or municipalities directly under the Central Government, but which
contravene the Constitution and the Legislation Law; the State Council has the power to alter
or annul any inappropriate ministerial rules and rules of local governments; the people’s
congresses of provinces, autonomous regions and municipalities directly under the Central
Government have the power to alter or annul any inappropriate local regulations enacted or
approved by their respective standing committees; the standing committees of the local
people’s congresses have the power to annul inappropriate rules enacted by the people’s
governments at the corresponding level; the people’s governments of provinces and
autonomous regions have the power to alter or annul any inappropriate rules enacted by the
people’s governments at a lower level.
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According to the Decision of the NPCSC Regarding the Strengthening of Interpretation
of Laws (Ӕᙄ) passed on June 10,
1981, issues related to the further clarification or supplement of laws or decrees should be
interpreted by the NPCSC or provided by with decrees, issues related to the application of laws
in a court trial should be interpreted by the Supreme People’s Court, issues related to the
application of laws in a prosecution process should be interpreted by the Supreme People’s
Procuratorate, and the application of other laws in matters other than those involved in court
trial or prosecution process should be interpreted by the State Council and the competent
authorities. At the regional level, the power to interpret local laws and regulations is vested in
the local legislative and administrative authorities which promulgate such laws and
regulations.
PRC JUDICIAL SYSTEM
According to the Constitution and the Law of the PRC of Organization of the People’s
Courts () which was last amended by the NPCSC on
October 26, 2018 and became effective on January 1, 2019, the PRC People’s Court is made
up of the Supreme People’s Court, local people’s courts at all levels and special people’s
courts. The local people’s courts are divided into three levels, namely the basic people’s courts,
the intermediate people’s courts and the higher people’s courts. The basic people’s courts may
set up certain people’s tribunals based on the status of the region, population and cases. The
Supreme People’s Court shall be the highest judicial organ of the state. The Supreme People’s
Court shall supervise the administration of justice by the local people’s courts at all levels and
by the special people’s courts. The people’s courts at a higher level shall supervise the judicial
work of the people’s courts at lower levels.
According to The Constitution and the Law of Organization of the People’s Procuratorate
of the PRC () which was last revised by NPCSC on
October 26, 2018 and became effective on January 1, 2019, the People’s Procuratorate is the
law supervision organ of the state. The People’s Procuratorate is made up of the Supreme
People’s Procuratorate, local people’s procuratorates at all levels and special people’s
procuratorates such as military procuratorates. The Supreme People’s Procuratorate shall be the
highest procuratorial organ. The Supreme People’s Procuratorate shall direct the work of the
local people’s procuratorates at all levels and of the special people’s procuratorates; the
people’s procuratorates at higher levels shall direct the work of those at lower levels.
The people’s courts employ a two-tier appellate system, i.e., judgments or rulings of the
second instance at the people’s courts are final. A party may appeal against the judgement or
ruling of the first instance of a local people’s courts. The people’s procuratorate may present
a protest to the people’s courts at the next higher level in accordance with the procedures
stipulated by the laws. In the absence of any appeal by the parties and any protest by the
people’s procuratorate within the stipulated period, the judgments or rulings of the people’s
courts are final. Judgments or rulings of the second instance of the intermediate people’s
courts, the higher people’s courts and the Supreme People’s Court and those of the first
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--- page 703 ---
instance of the Supreme People’s Court are final. However, if the Supreme People’s Court or
the people’s courts at the next higher level finds any definite errors in a legally effective
judgement, ruling or mediation document of the local people’s courts at any levels or the
people’s court at a lower level, it has the right to review or order the people’s court at a lower
level to conduct a retrial. If the president of the people’s court at any level finds any definite
errors in a legally effective judgement, ruling or mediation document of that court and believes
that a retrial is necessary, he or she shall submit the matter to the judicial committee for
discussion and decision.
The PRC Civil Procedure Law (), which was last
amended on September 1, 2023 and took effect on January 1, 2024, sets forth the requirements
for instituting a civil action, the jurisdiction of the people’s courts, the procedures to be
followed for conducting a civil action and the procedures for enforcement of a civil judgement
or order. All parties to a civil action conducted within the PRC must comply with the PRC Civil
Procedure Law. Civil cases are generally heard by the people’s courts where the defendants are
located. The parties to a dispute over a contract or other property rights may agree in writing
to choose the jurisdiction of a people’s court at the plaintiff’s place of residence, the
defendant’s place of residence, the place of performance of the contract, the place where the
contract is signed or the location of the subject-matter that has an actual connection with the
dispute, provided that this shall not be in contravention of the provisions of this law on
hierarchical jurisdiction and exclusive jurisdiction.
A foreign individual, a person without nationality, a foreign-invested enterprise or a
foreign organisation must have the same litigation rights and obligations as a PRC citizen, legal
person or other organizations when initiating or defending any proceedings at a people’s court.
If a foreign court limits the litigation rights of PRC citizens and enterprises, the PRC court may
apply the same limitations to the civil action rights of citizens and enterprises of such foreign
country. A foreign individual, a person without nationality, a foreign-invested enterprise or a
foreign organization must engage a PRC lawyer if such person needs to engage a lawyer in
initiating or defending any proceedings at a people’s court. Under an international treaty or the
principle of reciprocity concluded or acceded to by the PRC, the people’s court and foreign
courts may require each other to act on their behalf to serve documents, conduct investigations,
collect evidence and take other actions on behalf of each other. If the request by a foreign court
would result in the violation of the PRC’s sovereignty, security or public interest, the people’s
court shall decline the request.
All parties must comply with legally effective civil judgments and rulings. If any party
to a civil action refuse to comply with a judgement or ruling made by a people’s court or an
award made by an arbitration tribunal in the PRC, the other party may apply to the people’s
court for enforcement of relevant judgement or ruling within two years and may also apply for
a postponement of enforcement or revocation. The law on the suspension or interruption of the
statute of limitations shall apply to the suspension or interruption of the statute of limitations
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--- page 704 ---
of the action for which enforcement is sought. If, within the prescribed period of time, the party
has not complied with the obligations established by the legal instrument in accordance with
the notice of enforcement, the court may take appropriate enforcement measures.
When a party applies to a people’s court for enforcing a legally effective judgement or
ruling by a people’s court against a party who is not located within the territory of the PRC or
whose property is not within the PRC, the party may directly apply to a foreign court with
jurisdiction for recognition and enforcement of the judgement or ruling. The people’s court
may also request a foreign court for recognition and enforcement in accordance with the
provisions of international treaties concluded or acceded to by the PRC or in accordance with
the principle of reciprocity. Similarly, if a legally effective judgment or ruling by a foreign
court needs to be recognized and enforced by a people’s court, the party may directly apply to
the intermediate people’s court with jurisdiction for recognition and enforcement, or the
foreign court may request the people’s court for recognition and enforcement in accordance
with the provisions of an international treaty concluded or acceded to by that country and the
PRC, or on the principle of reciprocity. However, if the judgment or ruling violates the basic
principles of Chinese law or national sovereignty, security, or social public interests, it shall
not be recognized and enforced.
THE PRC COMPANY LA W, TRIAL MEASURES AND GUIDELINES FOR ARTICLES
OF ASSOCIATION
A joint stock limited company incorporated in the PRC seeking a listing on the Hong
Kong Stock Exchange is mainly subject to the following laws and regulations of the PRC.
The PRC Company Law was adopted by the NPCSC on December 29,1993 and came into
effect on July 1, 1994, and was subsequently amended on December 25, 1999, August 28, 2004,
October 27 2005, December 28, 2013, October 26, 2018 and December 29, 2023, and came into
effect on July 1, 2024.
The Trial Administrative Measures of Overseas Securities Offering and Listing by
Domestic Companies and five supporting guidelines (the “ Trial Measures ”), which were
promulgated by the CSRC on February 17, 2023 and took effect on March 31, 2023, are
applicable to domestic enterprises that directly or indirectly issue securities overseas or list
their securities for trading overseas.
The Guidelines for Articles of Association of Listed Companies (the “ Guidelines for the
Articles of Association ”), which were last revised by the CSRC on March 28, 2025 and took
effect on the same day, provide guidance for organizational articles of association. According
to the Trial Measures, where a domestic company directly offering and listing overseas, it shall
formulate its articles of association in line with the Guidelines for the Articles of Association
and other relevant regulations of the CSRC on corporate governance to regulate corporate
governance.
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--- page 705 ---
Set out below is a summary of the major provisions of the Company Law, the Trial
Measures and the Guidelines for Articles of Association which are applicable to the Company
General Provisions
A joint stock limited company is a corporate legal person incorporated in China under the
Company Law who has independent legal person properties and enjoys legal person property
rights and whose registered capital is divided into shares of equal par value. A company is
liable for the debts of the company with all its property. The shareholders of a joint stock
company are liable to the company to the extent of the shares subscribed by them.
When engaging in business activities, a company shall abide by laws and regulations,
observe social morality and business ethics, be honest and trustworthy, and accept supervision
from the government and the public. A company may invest in other enterprises. If the law
stipulates that a company shall not become an investor who bears joint and several liability for
the debts of the invested enterprise, such provisions shall apply.
Incorporation
A joint stock limited company may be established by promotion or subscription. A joint
stock limited company may be established by a minimum of one but not more than 200
promoters, and at least half of the promoters must have residence within the PRC.
Where a joint stock limited company is established by way of promotion, the promoters
shall subscribe for the full number of shares that the company shall issue at the time of
establishment as stipulated in the company’s articles of association. Where a joint stock limited
company is established by way of subscription, the shares subscribed by the promoters shall
not be less than 35% of the total number of shares that the company shall issue at the time of
establishment as stipulated in the company’s articles of association; provided, however, that
where otherwise provided by laws or administrative regulations, such provisions shall apply.
The promoters of a joint stock company established by subscription shall convene an
inaugural meeting of the company within thirty days from the date when the shares that the
company shall issue at the time of establishment are fully paid up. The promoters shall notify
the subscribers of the date of the meeting or make a public announcement fifteen days prior to
the date of the meeting. The inaugural meeting shall be held only if the subscribers holding
more than half of the voting rights are present. The convening and voting procedures of the
inaugural meeting of a joint stock limited company established by promotion shall be
stipulated in the articles of association of the company or the promoters’ agreement. The board
of directors shall authorize its representative to apply to the company registration authority for
establishment registration within 30 days after the conclusion of the inaugural meeting. The
Company is formally established with the status of a legal person after obtaining the approval
for registration and the issuance of a business license by the relevant company registration
authority.
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--- page 706 ---
Share capital
The shareholders may make capital contributions in cash, or alternatively may make
capital contributions with such valuated non-monetary property as physical items, intellectual
property rights, land-use rights, equity and creditor’s rights that may be valued in monetary
term and may be transferred in accordance with the law. Nevertheless, the property shall not
be used for capital contribution as stipulated by laws and administrative regulations. The
non-monetary property used as capital contribution shall be appraised and verified.
All issuance of shares shall be based on the principles of equality and fairness. The same
class of shares must carry equal rights. Shares of the same class issued on the same occasion
shall be issued on the same terms and at the same price per share. The subscriber shall pay the
same price for each share he/she/it subscribes for. The issue price of par value shares may be
at par value or at a premium, but may not be below the par value.
Domestic enterprises issued and listed overseas shall file with the CSRC in accordance
with the Trial Measures, submit filing reports, legal opinions and other relevant materials, and
truthfully, accurately and completely explain shareholder information and other information.
According to the Trial Measures, unless it complies with the provisions of the Trial Measures
or is otherwise stipulated by the country, the target of overseas issuance and listing of domestic
enterprises shall be overseas investors.
Increase of Share Capital
According to the Company Law, when a company issues new shares, resolutions shall be
passed by a shareholders’ general meeting, approving the following: the class and number of
the new shares, the issue price of the new shares, the commencement and end of the new share
issuance and the class and amount of new shares to be issued to existing shareholders. When
the company launches a public issuance of new shares with the approval of the securities
regulatory authorities of the State Council, it shall publish the prospectus. After the new share
issuance has been paid up, an announcement shall be made.
Reduction of Share Capital
If a company reduces its registered capital, it shall prepare a balance sheet and an
inventory of its assets. The company shall notify creditors within 10 days of the date when the
shareholders’ meeting adopts the resolution to reduce the registered capital, and make an
announcement in a newspaper or on the national enterprise credit information publicity system
within 30 days. The creditors shall have the right to demand the company to settle their debts
or provide corresponding guarantees within 30 days from the date of receipt of the notice, or
within 45 days from the date of the announcement for those who fail to receive the notice. The
company shall apply to the relevant company registration authority for the modification
registration for the reduction of registered capital.
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--- page 707 ---
Where a company reduces its registered capital, the amount of capital contribution or
shares shall be reduced in proportion to the capital contributed or the shares held by the
shareholders, unless it is otherwise provided by law, as otherwise agreed by all the shareholders
of a limited liability company or the articles of association of the joint stock limited company.
Repurchase of Shares
A company shall not repurchase its own shares except in the following circumstances:
(1) reduction of the registered capital of the company;
(2) merger with another company that holds its shares;
(3) use of its shares for carrying out an employee stock ownership plan or equity
incentive plan;
(4) request from shareholders who object to a resolution of a shareholders’ general
meeting on merger or division of the company to acquire their shares by the
company;
(5) use of shares for conversion of convertible corporate bonds issued by the listed
company; and
(6) it is necessary for a listed company to maintain its company value and protect its
shareholders’ equity.
The company’s acquisition of the shares of the company due to the circumstances
stipulated in items (1) and (2) above shall be subject to a resolution of the general meeting. The
company’s acquisition of the shares of the company due to the circumstances stipulated in
items (3), (5) and (6) above may, pursuant to the articles of association or the authorization of
the general meeting, be subject to a resolution of a board meeting at which more than
two-thirds of directors are present.
Under the circumstance stipulated in item (1), the shares of the company so acquired shall
be cancelled within ten days from the date of acquisition; under the circumstances stipulated
in either item (2) or item (4) above, the shares of the company so acquired shall be transferred
or cancelled within six months; under the circumstances stipulated in item (3), (5) or (6), the
total shares of the company held by the company shall not exceed 10% of the company’s total
outstanding shares, and shall be transferred or cancelled within 3 years.
Listed companies making a share buyback shall perform their obligation of information
disclosure according to the provisions of the Securities Law. If the share buyback is made
under any of the circumstances stipulated in (3), (5) or (6) hereof, centralized trading shall be
adopted publicly.
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--- page 708 ---
The company shall not accept the shares of the company as the subject matter of pledge.
Transfer of Shares
Shares held by shareholders of a joint stock limited company may be transferred in
accordance with the relevant laws and regulations. Pursuant to the Company Law, transfer of
shares by shareholders shall be carried out at a legally established securities exchange or in
other ways stipulated by the State Council. The transfer of shares shall be effected by the
shareholder’s endorsement or in other ways as required by laws and administrative regulations;
after the transfer, the company shall record the name and address of the transferee in the
register of shareholders. The register of shareholders shall not be changed within 20 days
before the shareholders’ meeting or within 5 days before the base date on which the company
decides to distribute dividends. If any laws, administrative regulations or the securities
regulatory authority under the State Council provide otherwise for the alteration of the register
of shareholders of a listed company, such provisions shall prevail.
Under the Company Law, shares issued prior to the public issuance of shares shall not be
transferred within one year from the date of the joint stock limited company’s listing on a stock
exchange. If any laws, administrative regulations or the securities regulatory authority under
the State Council provide otherwise for the shareholders or actual controllers of listed
companies to transfer their shares of the company, such provisions shall prevail. Directors,
supervisors and senior management of the company shall declare to the company the shares of
the company held by them and their changes, and the shares transferred each year during the
term of office determined at the time of taking office shall not exceed 25% of the total shares
of the company held by them; The shares of the company held by them may not be transferred
within one year from the date of listing and trading of the shares of the Company. The
above-mentioned personnel shall not transfer the shares of the Company held by them within
six months after their resignation. The Articles of Association may contain other restrictions on
the transfer of shares of the company held by the directors, supervisors and senior management
of the company.
If the shares are pledged within the transfer restriction period as prescribed by laws and
administrative regulations, the pledgee may not exercise the pledge right during the transfer
restriction period.
Shareholders
Under the Company Law and the Guidelines for the Articles of Association, the rights of
shareholders of a company include:
(1) receive dividends and other types of interest distributed in proportion to the number
of shares held;
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--- page 709 ---
(2) convene, call, preside over, attend or appoint shareholder proxies to attend
shareholders’ meetings in accordance with the law, and exercise corresponding
voting rights;
(3) supervise the operation of the company and make suggestions or make enquiries
(4) transfer, gift or pledge shares in accordance with laws, administrative regulations
and provisions of the articles of association;
(5) access and copy the articles of association, register of shareholders, minutes of
shareholders’ meetings, resolutions of board meetings, financial and accounting
reports, and qualified shareholders may refer to the company’s accounting books and
accounting vouchers;
(6) in the event of the termination or liquidation of the company, the right to participate
in the distribution of residual properties of the company in proportion to the number
of shares held;
(7) shareholders who object to the resolution on merger or division of the company
passed at the general meeting to request the company to acquire their shares; and
(8) other rights granted by laws, administrative regulations, other regulatory documents
and the company’s articles of association.
The obligations of a shareholder include the obligation to abide by laws, administrative
regulations and provisions of the articles of association, to pay the subscription moneys in
respect of the shares subscribed for and in accordance with the form of making capital
contributions, to be liable for the company’s debts and liabilities to the extent of the amount
of his or her subscribed shares and any other shareholders’ obligation specified in the
company’s articles of association.
Shareholders’ meetings
The shareholders’ meeting is the organ of authority of the company, which exercises its
powers in accordance with the Company Law. The shareholders’ meeting exercises the
following principal powers:
(1) to elect or remove the directors and supervisors and to decide on matters relating to
the remuneration of directors and supervisors;
(2) to examine and approve reports of the board of directors;
(3) to examine and approve reports of the board of supervisors;
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--- page 710 ---
(4) to examine and approve the company’s proposals for profit distribution plans and
loss recovery plans;
(5) to decide on any increase or reduction of the company’s registered capital;
(6) to decide on the issue of bonds by the company;
(7) to decide on issues such as merger, division, dissolution, liquidation of the company,
change of corporate form of the company and other matters;
(8) to amend the articles of association; and
(9) other powers as provided for in the articles of association.
Shareholders’ meetings are required to be held once every year. An extraordinary meeting
is required to be held within two months after the occurrence of any of the following:
(1) the number of directors is less than the number stipulated by the Company Law or
less than two thirds of the number specified in the articles of association;
(2) the aggregate losses of the company which are not recovered reach one-third of the
company’s total share capital;
(3) when shareholders alone or in aggregate holding 10% or more of the company’s
shares request the convening of an extraordinary meeting;
(4) whenever the board of directors deems necessary;
(5) when the board of supervisors so requests; or
(6) other circumstances as provided for in the articles of associations.
Shareholders’ meetings shall be convened by the board of directors, and presided over by
the chairman of the board of directors. In the event that the chairman is incapable of performing
or does not perform his duties, the meeting shall be presided over by the vice chairman. In the
event that the vice chairman is incapable of performing or not performing his duties, a director
nominated by more than half of directors shall preside over the meeting. Where the board of
directors is incapable of performing or not performing its duties of convening the shareholders’
meeting, the board of supervisors shall convene and preside over such meeting in a timely
manner. In case the board of supervisors fails to convene and preside over such meeting,
shareholders alone or in aggregate holding more than 10% of the company’s shares for 90 days
consecutively may unilaterally convene and preside over such meeting.
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--- page 711 ---
Under the Company Law, notice of shareholders’ meeting shall state the time and venue
of and matters to be considered at the meeting and shall be given to all shareholders 20 days
before the meeting. Notice of extraordinary meetings shall be given to all shareholders 15 days
prior to the meeting.
Under the Company Law, shareholders present at shareholders’ meeting have one vote for
each share they hold, except for shareholders of non-ordinary shares. However, shares held by
the company do not carry voting rights.
Pursuant to the provisions of the articles of association or a resolution of the
shareholders’ meeting, the accumulative voting system may be adopted for the election of
directors and supervisors at the shareholders’ meeting. Under the accumulative voting system,
each share shall be entitled to vote equivalent to the number of directors or supervisors to be
elected at the shareholders’ meeting and shareholders may consolidate their voting rights when
casting a vote.
Pursuant to the Company Law and the Guidelines for the Articles of Association,
resolutions of the shareholders’ meeting shall be adopted by more than half of the voting rights
held by the shareholders present at the meeting. However, resolutions of the shareholders’
meeting regarding the matters of amendments to the articles of association, the increase or
decrease of registered capital, the merger, division, dissolution, liquidation or change in the
form of the company shall be adopted by more than two-thirds of the voting rights held by the
shareholders present at the meeting.
Meeting minutes shall be prepared in respect of decisions on matters discussed at the
shareholders’ meeting. The host of the meeting and directors attending the meeting shall sign
to endorse such minutes. The minutes shall be kept together with the shareholders’ attendance
register and the proxy forms.
Board of directors
A joint stock limited company shall have a board of directors, which shall consist of three
or more members. The term of a director shall be stipulated in the articles of association, but
no term of office shall last for more than three years. Directors may serve consecutive terms
if re-elected. A director shall continue to perform his duties in accordance with the laws,
administrative regulations and articles of association until a duly re-elected director takes
office, if re-election is not conducted in a timely manner upon the expiry of his term of office,
or if the resignation of directors results in the number of directors being less than the quorum.
Under the Company Law, the board of directors mainly exercises the following powers:
(1) to convene the shareholders’ meetings and report on its work to the shareholders’
meetings;
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--- page 712 ---
(2) to implement the resolutions passed in shareholders’ meetings;
(3) to decide on the company’s business plans and investment proposals;
(4) to formulate the company’s profit distribution proposals and loss recovery
proposals;
(5) to formulate proposals for the increase or reduction of the company’s registered
capital and the issuance of corporate bonds;
(6) to prepare plans for the merger, division, dissolution and change in the form of the
company;
(7) to decide on the set-up of internal management organization of the company;
(8) to decide on appointments or dismissal of company managers and their
remuneration, and decide on appointments or dismissal of deputy managers and
person in charge of finance of the company based on the nomination by the
managers and their remuneration;
(9) to formulate the company’s basic management system; and
(10) to exercise any other power under the articles of association or granted by the
shareholders’ meeting.
Under the Company Law, meetings of the board of directors shall be convened at least
twice a year. Notice of meeting shall be given to all directors and supervisors 10 days before
the meeting. Interim board meetings may be proposed to be convened by shareholders
representing more than 10% of voting rights or more than one-third of the directors or
supervisors. The chairman shall convene and preside over such meeting within 10 days after
receiving such proposal. When convening an interim meeting, the board of directors may
specify alternative methods and timelines for issuing the meeting notice. Meetings of the board
of directors shall be held only if half or more of the directors are present. Resolutions of the
board of directors shall be passed by more than half of all directors. Each director shall have
one vote for resolutions to be approved by the board of directors. Directors shall attend board
meetings in person. If a director is unable to attend a board meeting, he may appoint another
director by a written power of attorney specifying the scope of the authorization to attend the
meeting on his behalf.
If a resolution of the board of directors violates the laws, administrative regulations or the
articles of association, resolutions of shareholders’ meeting and as a result of which the
company sustains serious losses, the directors participating in the resolution are liable to
APPENDIX IV SUMMARY OF PRINCIPAL LEGAL AND
REGULATORY PROVISIONS
– IV-13 –


--- page 713 ---
compensate the company. However, if it can be proved that a director expressly objected to the
resolution when the resolution was voted on, and that such objection was recorded in the
minutes of the meeting, such director may be released from that liability.
The Company Law provides that the following persons may not serve as a director: (i) a
person who is unable or has limited ability to undertake any civil liabilities; (ii) a person who
has been convicted of an offense of bribery, corruption, embezzlement or misappropriation of
property, or the destruction of socialist market economy order; or who has been deprived of his
political rights due to his crimes, in each case where less than five years have elapsed since the
date of completion of the sentence, or in the case of a suspended sentence, two years have not
elapsed since the probation period was completed; (iii) a person who has been a former
director, factory manager or manager of a company or an enterprise that has entered into
insolvent liquidation and who was personally liable for the insolvency of such company or
enterprise, where less than three years have elapsed since the date of the completion of the
bankruptcy and liquidation of the company or enterprise; (iv) a person who has been a legal
representative of a company or an enterprise that has had its business license revoked due to
violations of the law and has been ordered to close down by law and the person was personally
responsible, where less than three years have elapsed since the date of revocation of business
license or shutdown order; or (v) a person identified as a subject of enforcement for breach of
trust by the people’s court for failure to repay a significant amount of overdue debts.
Any election or appointment of directors in violation of the foregoing shall be invalid. If
a director falls under the aforesaid circumstances during his or her term of office, the company
shall remove him from his position.
Under the Company Law, the board of directors shall appoint a chairman and may appoint
a vice chairman.
The chairman and the vice chairman are elected with approval of more than half of all the
directors. The chairman shall convene and preside over board meetings and examine the
implementation of board resolutions. The vice chairman shall assist the work of the chairman.
In the event that the chairman is incapable of performing or not performing his duties, the
duties shall be performed by the vice chairman. In the event that the vice chairman is incapable
of performing or not performing his duties, a director nominated by more than half of the
directors shall perform his duties.
Board of Supervisors
Under the Company Law, a joint stock limited company shall have a board of supervisors
composed of more than three members. The board of supervisors is made up of representatives
of the shareholders and an appropriate proportion of representatives of the employees of the
company. The actual proportion shall be stipulated in the articles of association, provided that
the proportion of representatives of the employees shall not be less than one third of the
APPENDIX IV SUMMARY OF PRINCIPAL LEGAL AND
REGULATORY PROVISIONS
– IV-14 –


--- page 714 ---
supervisors. Representatives of the employees of the company in the board of supervisors shall
be democratically elected by the employees at the employees’ representative assembly,
employees’ general meeting or otherwise. The directors and senior management may not act
concurrently as supervisors.
Each term of office of a supervisor is three years and he or she may serve consecutive
terms if re-elected. A supervisor shall continue to perform his duties in accordance with the
laws, administrative regulations and articles of association until a duly re-elected supervisor
takes office, if re-election is not conducted in a timely manner upon the expiry of his term of
office, or if the resignation of supervisors results in the number of supervisors being less than
the quorum.
The board of supervisors exercises the following powers:
(1) to review the company’s financial position;
(2) to supervise the directors and senior management in their performance of their
duties and to propose the removal of directors and senior management who have
violated laws, regulations, the articles of association or the resolutions of
shareholders’ meeting;
(3) when the acts of directors and senior management are harmful to the company’s
interests, to require correction of those acts;
(4) to propose the convening of extraordinary shareholders’ general meetings and to
convene and preside over shareholders’ general meetings when the board of
directors fails to perform the duty of convening and presiding over shareholders’
general meeting under the Company Law;
(5) to initiate proposals for resolutions to shareholders’ general meeting;
(6) to initiate proceedings against directors and senior management under the relevant
provisions of the Company Law; and
(7) other powers specified in the articles of association.
Supervisors may attend board meetings and make enquiries or proposals in respect of
board resolutions. The board of supervisors may initiate investigations into any irregularities
identified in the operation of the company and, where necessary, may engage an accounting
firm to assist their work at the company’s expense.
APPENDIX IV SUMMARY OF PRINCIPAL LEGAL AND
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– IV-15 –


--- page 715 ---
The board of supervisors shall appoint a chairman and may appoint a vice chairman. The
chairman and the vice chairman of the board of supervisors are elected with approval of more
than half of all the supervisors. The chairman of the board of supervisors shall convene and
preside over the meetings of the board of supervisors. In the event that the chairman of the
board of supervisors is incapable of performing or not performing his duties, the vice chairman
of the board of supervisors shall convene and preside over the meetings of the board of
supervisors. In the event that the vice chairman of the board of supervisors is incapable of
performing or not performing his duties, a supervisor nominated by more than half of the
supervisors shall convene and preside over the meetings of the board of supervisors.
A joint stock limited company may, in accordance with the provisions of the Articles of
Association, establish the Audit Committee composed of directors within the Board to exercise
the authorities of the supervisory committee as stipulated by the Company Law, instead of
establishing the supervisory committee or Supervisors.
Pursuant to the Guidelines for the Articles of Association, the Board of Directors has set
up the Audit Committee to exercise the powers of the Supervisory Committee as stipulated in
the Company Law.
On December 27, 2024, the CSRC promulgated the Transitional Arrangements for the
Implementation of Supporting Rules under the New Company Law (ࢁ
ᗫཀನಂτર), requiring listed companies to include provisions in their
articles of association for establishing an audit committee under the Board to perform the
original duties of the supervisory committee and to abolish the supervisory committee or
supervisors, in accordance with the Company Law, the Provisions of the State Council on the
Implementation of the Registration Management System for Registered Capital under the
Company Law of the PRC (݄<ج>ൗ̅༟͉೮া၍ଣՓ
) , and the supporting rules of the CSRC by January 1, 2026. Before a listed
company adjusts the setup of its internal supervisory body, the board of supervisors or
supervisors shall continue to abide by the provisions in the original systems and rules of the
CSRC.
Manager and senior management
Under the Company Law, a joint stock limited company shall have a manager who shall
be appointed or removed by the board of directors. The manager shall report to the board of
directors and exercise functions and powers as specified in the articles of association or as
authorized by the board of directors. The manager shall attend meetings of the board of
directors as a non-voting attendee.
According to the Company Law, senior management shall mean the manager, deputy
manager(s), person-in-charge of finance, board secretary (in case of a listed company) of a
company and other personnel as stipulated in the articles of association.
APPENDIX IV SUMMARY OF PRINCIPAL LEGAL AND
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--- page 716 ---
Duties of directors, supervisors and senior management
Directors, supervisors and senior management of the company are required under the
Company Law to comply with the relevant laws, regulations and the articles of association, and
have fiduciary and diligent duties to the company.
Directors and senior management are prohibited from:
(1) misappropriation of the company’s property and capital;
(2) depositing the company’s capital into accounts under his own name or the name of
other individuals;
(3) Abuse of power to accept bribes or any other illegal income
(4) accept and possess commissions paid by a third party for transactions conducted
with the company;
(5) unauthorized divulgence of confidential business information of the company; or
(6) other acts in violation of their fiduciary duty to the company.
If any director, supervisor or senior management directly or indirectly concludes a
contract or conducts a transaction with the company, he/she should report the matters relating
to the conclusion of the contract or transaction to the board of directors or the shareholders’
meeting, subject to the approval of the board of directors or the shareholders’ meeting
according to the articles of association. The provisions of the preceding paragraph shall apply
if any near relatives of the directors, supervisors or senior management, or any of the
enterprises directly or indirectly controlled by the directors, supervisors or senior management
or any of their near relatives, or any related parties with any other related-party relationship
with the directors, supervisors or senior management, concludes a contract or conducts a
transaction with the company.
Neither director, supervisor or senior management may take advantage of his/her position
to seek any business opportunity that belongs to the company for himself/herself or any other
person except under any of the following circumstances:
(1) where he/she has reported to the board of directors or the shareholders’ meeting and
has been approved by a resolution of the board of directors or the shareholders’
meeting according to the articles of association; or
(2) where the company cannot make use of the business opportunity as stipulated by
laws, administrative regulations or the articles of association.
APPENDIX IV SUMMARY OF PRINCIPAL LEGAL AND
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– IV-17 –


--- page 717 ---
Where any director, supervisor or senior management fails to report to the board of
directors or the shareholders’ meeting and obtain an approval by resolution of the board of
directors or the shareholders’ meeting according to the articles of association, he/she may not
engage in any business that is similar to that of the company where he/she holds office for
himself/herself or for any other person.
The income obtained by directors, supervisors and senior management in violation of the
above provisions shall belong to the company.
A director, supervisor or senior management who contravenes any law, regulation or the
company’s articles of association in the performance of his duties resulting in any loss to the
company shall be personally liable for the damages to the company.
Finance and Accounting
A company shall establish financial and accounting systems according to laws,
administrative regulations and the regulations of the financial department of the State Council
and shall at the end of each financial year prepare a financial and accounting report which shall
be audited by an accounting firm as required by law. The company’s financial and accounting
report shall be prepared in accordance with provisions of the laws, administrative regulations
and the regulations of the financial department of the State Council.
The financial and accounting reports of a joint stock limited company available at the
company for inspection by the shareholders at least 20 days before the convening of an annual
general meeting of shareholders. A joint stock limited company which has issued shares to the
public must also publish its financial and accounting reports.
The premium received through issuance of shares at prices above par value, amount of
proceeds from the issuance of no-par value shares not included in the registered capital and
other incomes required by the financial department of the State Council to be allocated to the
capital reserve fund shall be allocated to the company’s capital reserve fund. The company’s
reserve fund shall be applied to make up losses of the company, expand its business operations
or be converted to increase the registered capital of the company. When utilizing reserves to
offset the company’s losses, the discretionary reserve and statutory reserve shall be applied
first. If the losses remain insufficiently covered, the capital reserve may be used in accordance
with applicable regulations. Upon the conversion of statutory common reserve fund into
capital, the balance of the statutory common reserve fund shall not be less than 25% of the
registered capital of the company before such conversion.
The company shall have no other accounting books except the statutory accounting books.
Its assets shall not be deposited in any accounts opened in the name of any individual.
APPENDIX IV SUMMARY OF PRINCIPAL LEGAL AND
REGULATORY PROVISIONS
– IV-18 –


--- page 718 ---
Appointment and Retirement of Accounting Firms
Pursuant to the Company Law, the appointment or dismissal of accounting firms
responsible for the auditing of the company shall be determined by shareholders’ general
meeting, board of directors or the supervisory committee in accordance with provisions of
articles of association. The accounting firm should be allowed to make representations when
the shareholders’ general meeting or board of directors conducts a vote on the dismissal of the
accounting firm. The company should provide true and complete accounting evidences, books,
financial and accounting reports and other accounting data to the accounting firm it employs
without any refusal, withholding and misrepresentation.
According to the Articles of Association, the appointment and dismissal of an accounting
firm by a company shall be decided by the shareholders’ meeting. The board of directors shall
not appoint an accounting firm before the decision of the shareholders’ meeting. The audit fee
of an accounting firm shall be decided by the shareholders’ meeting.
Distribution of Profits
Pursuant to the Company Law, when distributing the after-tax profits for the current year,
the company shall retain ten percent of the profits as the company’s statutory reserve fund. The
company does not need to retain the profits when the accumulated amount of the company’s
statutory reserve fund has reached over fifty percent of the Company’s registered capital. If the
statutory reserve fund is not sufficient to offset the losses of the previous year, the company
shall off-set the losses with the relevant year’s profits before retaining the statutory reserve
fund as mentioned above. The company may further retain discretionary reserve fund from the
after-tax profits pursuant to the resolution of the shareholders’ meeting after having retained
the statutory reserve fund from the after-tax profits. The remaining post-tax profit after the
company has made up for losses and extracted surplus reserves shall be distributed by the joint
stock limited company in proportion to the shares held by the shareholders, unless otherwise
provided in the company’s articles of association. Profits attributable for the shares held by the
Company shall not be distributed to the company.
Where a company distributes profits to shareholders in violation of the provisions of the
Company Law, the shareholders shall refund the profits distributed to the company, and the
shareholders and directors, supervisors, and senior management who are responsible for
causing losses to the company shall bear compensation liability.
If the shareholders’ meeting adopts a resolution on distributing profits, the board of
directors shall make the distribution within six months from the date on which the resolution
is passed at the shareholders’ meeting.
APPENDIX IV SUMMARY OF PRINCIPAL LEGAL AND
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– IV-19 –


--- page 719 ---
Amendments to Articles of Association
Pursuant to the Company Law, a resolution to amend the articles of association of a
company shall be passed by a shareholders’ meeting, which shall be passed by more than
two-thirds of the voting rights held by the shareholders present at the meeting.
According to the Guidelines for the Articles of Association, a company will revise the
articles of association under any of the following circumstances: (1) after the Company Law
or relevant laws and administrative regulations are amended, the matters stipulated in the
articles of association conflict with the provisions of the amended laws or administrative
regulations; (2) the circumstances of the company change and are inconsistent with the matters
recorded in the articles of association; (3) the shareholders’ meeting decides to amend the
articles of association.
Dissolution and liquidation
According to the Company Law, a company is dissolved for the following reasons:
(1) the business term prescribed by the company’s articles of association expires or
other grounds for dissolution prescribed by the company’s articles of association
occur;
(2) dissolution by resolution of the shareholders’ meeting;
(3) dissolution due to company merger or division;
(4) the company has its business license revoked, ordered to close down or is revoked
according to law;
(5) where the company encounters serious difficulties in its operation and management
and its continuance shall cause a significant loss in the interest of shareholders, and
where this cannot be resolved through other means, shareholders who hold more
than 10% of the total shareholders’ voting rights of the company may present a
petition to a people’s court for the dissolution of the company.
If the company encounters the reasons for dissolution as prescribed in the preceding
paragraph, it shall publicize the reasons for dissolution through the national enterprise credit
information publicity system within ten days.
If a company is in any of the circumstances described in (1) and (2) above and has not
yet distributed any property to its shareholders, it may continue to exist by amending its
articles of association or by resolution of a shareholders’ meeting. If the articles of association
APPENDIX IV SUMMARY OF PRINCIPAL LEGAL AND
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– IV-20 –


--- page 720 ---
of the company are amended in accordance with the foregoing provisions or by resolution of
a shareholders’ meeting, the approval of a joint stock company with two-thirds or more of the
voting rights held by the shareholders present at the shareholders’ meeting shall be obtained.
If a company is dissolved due to the provisions of (1), (2), (4) and (5) above, it shall be
liquidated. The directors are the persons responsible for liquidation of the company and shall
form a liquidation committee to carry out liquidation within 15 days from the date when the
cause for dissolution occurs. The liquidation committee shall consist of directors, unless it is
otherwise provided for in the articles of association of the company or another person is elected
by resolution of the shareholders’ meeting. If the person with liquidation obligations fails to
perform his/her liquidation obligations in a timely manner and causes losses to the company
or creditors, he/she shall bear liability for compensation. If a liquidation committee is not
established for liquidation within the time limit, or the liquidation committee is not established
for liquidation, the interested party may apply to the People’s Court to designate relevant
personnel to form a liquidation committee for liquidation. The People’s Court shall accept the
application and promptly organize a liquidation committee for liquidation.
The liquidation committee shall exercise the following powers during the liquidation
period:
(1) to liquidate the assets of the company and prepare the balance sheet and a property
inventory;
(2) to inform creditors by notice or announcement;
(3) to deal with the outstanding businesses of the company relating to liquidation;
(4) to settle the owed taxes and taxes incurred in the course of liquidation;
(5) to settle creditor’s rights and debts;
(6) to dispose of the remaining assets of the company after repayment of debts;
(7) to represent the company in civil proceedings.
The liquidation committee shall notify the creditors within ten days of its establishment,
and make an announcement in the newspapers or the national enterprise credit information
publicity system within sixty days.
APPENDIX IV SUMMARY OF PRINCIPAL LEGAL AND
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– IV-21 –


--- page 721 ---
The creditors shall declare their creditors’ rights to the liquidation committee within 30
days after receiving the notice, or within 45 days from the date of the announcement if they
have not received the notice. When declaring its claims, a creditor shall explain the relevant
matters of the claim and provide supporting materials. The liquidation committee shall register
the claims. During the period of claiming creditors’ rights, the liquidation committee shall not
make any payment to creditors.
After liquidation of the company’s properties and preparation of the balance sheet and
property inventory by the liquidation committee, the committee shall formulate a liquidation
plan and report it to the shareholders’ meeting or the People’s Court for confirmation. The
remaining properties of the company shall be distributed among the shareholders of a joint
stock company according to the proportion of shares held by the shareholders after payment of
the liquidation expenses, the salaries of employees, social insurance premiums and statutory
compensations, the payment of overdue taxes and the repayment of the debts of the company.
During the liquidation period, the company shall continue to exist but shall not carry out any
business activities unrelated to the liquidation. Properties of the company shall not be
distributed to the shareholders until its debt has been settled in accordance with the aforesaid
provisions.
If the liquidation team finds that the company’s properties are insufficient to pay off its
debts after liquidating the company’s properties and preparing the balance sheet and property
inventory, it shall apply to the People’s Court for bankruptcy and liquidation. After the People’s
Court accepts the bankruptcy application, the liquidation team shall transfer the liquidation
matters to the bankruptcy administrator designated by the People’s Court.
Upon completion of the liquidation of the company, the liquidation committee shall
prepare a liquidation report, which shall be submitted to the shareholders’ meeting or the
People’s Court for confirmation and be submitted to the company registry to apply for
deregistration of the company. The members of the liquidation committee shall perform the
liquidation duties and bear the duties of fiduciary duties and diligence. If a member of the
liquidation committee neglects to perform the liquidation duties and causes losses to the
company, he/she shall be liable for compensation; if any member of the liquidation committee
causes losses to creditors due to intentional or gross negligence, he/she shall be liable for
compensation.
Where a company is declared bankrupt in accordance with the laws, it shall be bankrupted
and liquidated in accordance with the laws in respect of enterprise bankruptcy.
Where a company has its business license revoked, is ordered to close down or is revoked,
and fails to apply to the company registry for deregistration of the company for three years, the
company registry may make an announcement through the National Enterprise Credit
Information Publicity System for a period of not less than 60 days. If there is no objection after
the expiration of the announcement period, the company registry may cancel the registration
of the company.
APPENDIX IV SUMMARY OF PRINCIPAL LEGAL AND
REGULATORY PROVISIONS
– IV-22 –


--- page 722 ---
Overseas Listing
According to the Trial Measures, an issuer that conducts an overseas initial public
offering or listing shall file with the CSRC within three working days after the overseas
submission of the application documents for offering and listing. If an issuer offers securities
on the same overseas market after its overseas offering and listing, it shall file with the CSRC
within three working days after the completion of the offering. After the issuer’s overseas
offering and listing, any offering and listing on other overseas markets shall be filed in
accordance with the aforesaid requirements.
Loss of Share Certificate
Pursuant to the Company Law, if a share certificate is stolen, lost or perished, a
shareholder may request the People’s Court to declare the share certificate invalid in
accordance with the procedures of public notice of demand as stipulated in the Civil Procedure
Law of the PRC. Upon declaration of invalidity of the share certificate by the People’s Court,
the shareholder may apply to the company for a replacement share certificate.
Suspension and termination of listing
The provisions relating to suspension and termination of listing have been deleted from
the Company Law. The listing suspension has also been removed from the Securities Law. If
the listed securities are subject to termination of listing as required by a stock exchange, the
stock exchange shall terminate their listing and trading in accordance with its business rules.
Pursuant to the Trial Measures, if an issuer voluntarily terminates the listing or is subject
to mandatory termination of listing after the overseas offering and listing, it shall report the
specific situation to the CSRC within three working days from the date of the relevant issue
and announcement.
Merger and Demerger
In the event of a company merger, the parties to the merger shall enter into a merger
agreement and prepare a balance sheet and an inventory of assets and liabilities. The company
shall notify its creditors within 10 days from the resolution of the merger and make an
announcement in a newspaper or on the National Enterprise Credit Information Publicity
System within 30 days. The creditors may, within 30 days from the date of receipt of the notice,
or within 45 days from the date of the announcement if the creditor fails to receive the notice,
request the company to settle the debts or provide corresponding guarantees. In the event of a
company merger, the creditors’ rights and debts of the parties to the merger shall be inherited
by the subsisting company or the newly established company after the merger.
APPENDIX IV SUMMARY OF PRINCIPAL LEGAL AND
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– IV-23 –


--- page 723 ---
Where there is a division of the Company, its assets shall be divided accordingly and a
balance sheet and a list of assets shall be prepared. The Company shall notify the creditors
within ten days from the date of the resolution and publish an announcement in a newspaper
or the National Enterprise Credit Information Publicity System within 30 days. The entities
after the division of the Company shall be jointly and severally liable for the pre-division debts
of the Company, unless provided otherwise in a written agreement pertaining to the payment
of debts between the Company and its creditors prior to the division.
THE PRC SECURITIES LA WS AND REGULATIONS
In October 1992, the State Council established the Securities Committee and the CSRC.
The Securities Committee is responsible for coordinating the drafting of securities regulations,
formulating securities-related policies, planning the development of securities markets,
directing, coordinating and supervising all securities related institutions in the PRC and
administering the CSRC. The CSRC is the regulatory arm of the Securities Committee and is
responsible for the drafting of regulatory provisions of securities markets, supervising
securities companies, regulating public offering of securities by PRC companies in the PRC or
overseas, regulating the trading of securities, compiling securities related statistics and
undertaking relevant research and analysis. In April 1998, the State Council consolidated the
above two departments and reformed the CSRC.
On April 22, 1993, the State Council promulgated the Interim Provisional Regulations on
the Administration of Share Issuance and Trading (၍ଣᅲБૢԷ)
stipulates the public offerings of equity securities, trading in equity securities, the acquisition
of listed companies, deposit, clearing and transfer of listed equity securities, the disclosure of
information with respect to a listed company, investigation, penalties and dispute settlement.
On December 25, 1995, the State Council promulgated the Regulations of the State
Council Concerning Domestic Listed Foreign Shares of Joint Stock Limited Companies ( ਷
). These regulations principally govern the
issue, subscription, trading and declaration of dividends and other distributions of domestic
listed foreign shares and disclosure of information of joint stock limited companies having
domestic listed foreign shares.
The Securities Law was promulgated by the NPCSC on December 29, 1998 and came into
effect on July 1, 1999, and was amended on August 28, 2004, October 27, 2005, June 29, 2013,
August 31, 2014 and December 28, 2019 and came into effect on March 1, 2020, respectively),
is divided into 14 chapters and 226 articles, it regulates, among other things, the issuance and
trading of securities, the listing of securities, takeovers of listed companies, the duties of stock
exchanges, securities companies, securities registration and clearing organisations and
securities regulatory bodies.
APPENDIX IV SUMMARY OF PRINCIPAL LEGAL AND
REGULATORY PROVISIONS
– IV-24 –


--- page 724 ---
Pursuant to the Securities Law, domestic enterprises which, directly or indirectly, issue
securities or list and trade their securities outside the PRC shall comply with the relevant
regulations of the State Council. The specific measures for subscription and trading of shares
of domestic companies in foreign currencies shall be separately formulated by the State
Council. Currently, the issue and trading of foreign issued securities (including H shares) are
principally governed by the regulations and rules promulgated by the State Council and the
CSRC.
ARBITRATION AND ENFORCEMENT OF ARBITRAL A W ARD
The Arbitration Law of the PRC () (the “ PRC Arbitration
Law”) was enacted by the NPCSC on August 31, 1994, which became effective on September
1, 1995 and was amended on August 27, 2009 and September 1, 2017, respectively. It is
applicable to, among other matters, economic disputes involving foreign where all parties have
entered into a written agreement to resolve disputes by arbitration before an arbitration
committee constituted in accordance with the PRC Arbitration Law. The PRC Arbitration Law
provides that an arbitration committee may, before the promulgation of arbitration regulations
by the PRC Arbitration Association, formulate interim arbitration rules in accordance with the
PRC Arbitration Law and the Civil Procedure Law of the PRC. Where the parties shall
voluntarily reach an arbitration agreement on the use of arbitration to resolve disputes. If the
parties reach an arbitration agreement and one party sues the people’s court, the people’s court
will refuse to handle a legal proceeding, unless the arbitration agreement is invalid.
Under the PRC Arbitration Law, an arbitral award is final and binding on the parties. If
a party fails to comply with an award, the other party to the award may apply to the people’s
court for enforcement. The award shall not be enforced upon examination and verification by
an arbitration tribunal of the people’s court if the arbitration procedure is incompliant with the
laws (including but not limited to irregularity in the composition of the arbitration committee,
procedural irregularity, the giving of an award beyond the scope of the arbitration agreement
or the jurisdiction of the arbitration commission).
Where a party applies for enforcement of a legally effective arbitral award made in the
PRC, and the opposite party or his property is not within the territory of the PRC, the applicant
may directly apply to a foreign court with jurisdiction for recognition and enforcement of the
arbitral award. Likewise, where a legally effective arbitral award made outside the PRC needs
to be recognized and enforced by the people’s court of the PRC, the people’s court may handle
the matter in accordance with the provisions of international treaties to which the PRC is a
signatory or in which the PRC is a participant or the principle of reciprocity.
APPENDIX IV SUMMARY OF PRINCIPAL LEGAL AND
REGULATORY PROVISIONS
– IV-25 –


--- page 725 ---
According to the Arrangement of the Supreme People’s Court on Mutual Enforcement of
Arbitral Awards between the Mainland and the Hong Kong Special Administrative Region
(τર) promulgated by the
Supreme People’s Court on January 24, 2000 and effective on February 1, 2000, and the
Supplementary Arrangement of the Supreme People’s Court on Mutual Enforcement of Arbitral
Awards between the Mainland and the Hong Kong Special Administrative Region ( ௰৷ɛ
໾̂τર) promulgated by the
Supreme People’s Court on November 26, 2020, awards made by arbitral authorities in
mainland China can be applied for enforcement in Hong Kong, and Hong Kong arbitration
awards can also be applied for enforcement in the mainland China.
JUDICIAL JUDGMENT AND ITS ENFORCEMENT
According to the Arrangement on Mutual Recognition and Enforcement of Judgments in
Civil and Commercial Matters by the Courts of the Mainland China and of the Hong Kong
Special Administrative Region Pursuant to Agreed Jurisdiction by Parties Concerned ( ௰৷
΁кӔ
τર) (the “ Arrangement ”) promulgated by the Supreme People’s Court on July 3, 2008
and implemented on August 1, 2008, in the case of final judgment, defined with payment
amount and enforcement power, made between the People’s court of China and the court of the
Hong Kong Special Administrative Region in a civil and commercial case with written
jurisdiction agreement, any party concerned may apply to the People’s Court of China or the
court of the Hong Kong Special Administrative Region for recognition and enforcement based
on the Arrangement. “Choice of court agreement in written” refers to a written agreement
defining the exclusive jurisdiction of either the People’s Court of China or the court of the
Hong Kong Special Administrative Region in order to resolve dispute with particular legal
relation occurred or likely to occur by the party concerned. Therefore, the party concerned may
apply to the People’s Court of China or the court of the Hong Kong Special Administrative
Region to recognize and enforce the final judgment made in China or Hong Kong that meet
certain conditions of the aforementioned regulations. Arrangement on Reciprocal Recognition
and Enforcement of Judgements in Civil and Commercial Matters by the Courts of the
Mainland and of the Hong Kong Special Administrative Region (݁
τર) (the “ New Arrangement ”) was effective on
January 29, 2024 and replaced the Arrangement. However, any “Choice of court agreement in
written” concluded under the Arrangement before January 29, 2024 remains applicable. The
New Arrangement seeks to establish a clearer and more comprehensive mechanism for the
recognition and enforcement of a wider range of civil and commercial judgments between the
Hong Kong Special Administrative Region and the Mainland.
APPENDIX IV SUMMARY OF PRINCIPAL LEGAL AND
REGULATORY PROVISIONS
– IV-26 –


--- page 726 ---
This appendix is mainly to provide investors with an overview of the Articles of
Association. As the following information is a summary, it may not set out all the information
that may be material to potential investors.
ISSUANCE OF SHARES
The shares of the Company shall be in the form of share certificates.
The issuance of shares by the Company shall follow the principles of openness, fairness
and impartiality. Each share of the same class shall carry the same rights.
For shares of the same class issued in the same offering, the conditions and price per share
shall be the same. Individual subscribing for such shares shall pay the same price per share.
INCREASE, REDUCTION, REPURCHASE AND TRANSFER OF SHARES
Increase and Reduction of Shares
The Company may, based on its business and development needs and in accordance with
laws and regulations, increase its capital by resolution of the shareholders’ general meetings
through any of the following methods:
(i) issuance of shares to the general public;
(ii) issuance of shares to specific investors;
(iii) distribution of bonus shares to existing shareholders;
(iv) conversion of capital reserve into share capital;
(v) other methods as prescribed by laws, administrative regulations and the CSRS.
The Company may reduce its registered capital. Any reduction of registered capital of the
Company shall be carried out in accordance with the procedures stipulated in the Company
Law, other relevant regulations, and the Articles of Association.
APPENDIX V SUMMARY OF THE ARTICLES OF ASSOCIATION
– V-1 –


--- page 727 ---
Repurchase of Shares
The Company shall not repurchase its own shares, except under any of the following
circumstances:
(i) to reduce its registered capital;
(ii) to merge with another company holding shares of the Company;
(iii) to use the shares for employee stock ownership plans or equity incentives;
(iv) when Shareholders object to resolutions of the shareholders’ general meetings
regarding mergers or demergers of the Company and request the Company to
repurchase their shares;
(v) to use the shares for converting corporate bonds issued by the Company that are
convertible into shares;
(vi) when it is necessary for the Company to safeguard its value and Shareholders’
interests.
Subject to the applicable securities regulatory rules of the place where the Company’s
share certificates are listed, the Company may repurchase its own shares through public
centralized trading or other means as permitted by laws, administrative regulations, and the
securities regulatory authority of the place where the shares are listed.
Where the Company repurchases its shares pursuant to items (iii), (v) or (vi) above, it
shall do so by means of public centralized bidding or tender offer.
Where the Company repurchases its shares pursuant to items (i) or (ii) above, such
repurchase shall be subject to a resolution of the shareholders’ general meetings; where the
repurchase is carried out pursuant to items (iii), (v) or (vi), it shall be subject to a resolution
passed at a Board meeting attended by more than two-thirds of the directors. Where the
Company repurchases its shares under item (i), the shares shall be cancelled within 10 days
from the date of repurchase. Where the repurchase falls under items (ii) or (iv), the shares shall
be transferred or cancelled within 6 months. Where the repurchase falls under items (iii), (v)
or (vi), the aggregate number of shares held by the Company shall not exceed 10% of the total
number of issued shares of the Company and shall be transferred or cancelled within 3 years.
Where the Company repurchases shares under item (vi), it may, upon fulfilling the
obligation of prior disclosure and in accordance with the conditions and procedures prescribed
by the stock exchange, sell such shares through centralized bidding.
APPENDIX V SUMMARY OF THE ARTICLES OF ASSOCIATION
– V-2 –


--- page 728 ---
Transfer of Shares
Shares of the Company shall be transferred in accordance with the law.
Shares issued before the public offering of the Company’s shares shall not be transferred
within one year from the date on which the Company’s shares are listed and traded on a stock
exchange.
Directors and senior management personnel of the Company shall report their
shareholdings in the Company and any changes thereto. During their terms of office, the
number of shares they may transfer each year determined upon assumption of office shall not
exceed 25% of the total number of shares of the same class they hold in the Company. Shares
held by them shall not be transferred within one year from the date of the Company’s listing.
Such individuals shall not transfer their shares within six months after resignation. Directors
and senior management personnel who resign before the expiration of their term of office shall
continue to comply with the share disposal restrictions under the Company Law and the
securities regulatory rules of the place where the Company’s shares are listed during their
originally determined term and for six months thereafter.
Where any director, senior management personnel, or shareholder holding 5% or more of
the Company’s shares sells the Company’s shares or other equity securities within six months
after purchase or purchases such shares or securities within six months after selling them, any
gains from such transactions shall belong to the Company, and the Board of Directors shall
recover such gains. However, this shall not apply to securities companies holding 5% or more
of the Company’s shares as a result of underwriting and acquiring unsold shares, or in other
circumstances as prescribed by the CSRS.
Shares or other equity securities held by the Directors, senior management personnel or
individual shareholders mentioned above shall include those held by their spouses, parents and
children, as well as those held through accounts in the name of others.
If the Board of Directors fails to act in accordance with the first paragraph, shareholders
shall have the right to request the Board to act within 30 days. If the Board fails to do so within
the above period, shareholders shall have the right, in the interests of the Company, to bring
a lawsuit directly in the People’s Court in their own name.
Where the Board of Directors fails to act in accordance with the provisions of the first
paragraph, the responsible directors shall bear joint and several liability in accordance with the
law.
APPENDIX V SUMMARY OF THE ARTICLES OF ASSOCIATION
– V-3 –


--- page 729 ---
SHAREHOLDERS AND SHAREHOLDERS’ GENERAL MEETINGS
Shareholders
The Company shall establish a register of shareholders based on the documentation
provided by the securities registration and settlement institution and in accordance with the
applicable laws, regulations, normative documents, and the Hong Kong Listing Rules. The
register of shareholders shall constitute conclusive evidence of shareholders’ ownership of
shares in the Company. The principal register of holders of H Shares shall be maintained in
Hong Kong and made available for shareholders’ inspection. The Company may suspend the
registration of shareholders in accordance with applicable laws, regulations, and the securities
regulatory rules of the place where the Company’s shares are listed. Any shareholder whose
name is recorded in the register of shareholders, or any person who requests to have their name
entered in the register of shareholders, may apply to the Company for a replacement share
certificate if their share certificate is lost. In the case of lost H share certificates, shareholders
may apply for replacement in accordance with the laws of the jurisdiction where the principal
register of holders of H Shares is maintained, the rules of the relevant stock exchange, or other
applicable regulations. Shareholders shall enjoy rights and bear obligations according to the
class of shares they hold. Shareholders holding the same class of shares shall enjoy equal rights
and bear the equal obligations.
Rights and Obligations of Shareholders
Shareholders of the Company shall enjoy the following rights:
(i) to receive dividends and other forms of distribution based on the proportion of
shares held;
(ii) to request the convening or calling of, to preside over, to attend, or to appoint
shareholder proxies to attend the shareholders’ general meeting and exercise
corresponding voting rights in accordance with the law;
(iii) to supervise the operations of the Company and make proposals or inquiries;
(iv) to transfer, gift or pledge their shares in accordance with the law, administrative
regulations, securities regulatory rules of the place where the Company’s shares are
listed, the requirements of the relevant regulatory authorities, and the Articles of
Association;
(v) to inspect and copy the Articles of Association, register of shareholders, minutes of
shareholders’ general meetings, resolutions of the board of directors, and financial
accounting reports. Eligible shareholders may inspect the Company’s accounting
books and vouchers;
APPENDIX V SUMMARY OF THE ARTICLES OF ASSOCIATION
– V-4 –


--- page 730 ---
(vi) to participate in the distribution of the Company’s remaining assets in proportion to
the shares held in the event of termination or liquidation of the Company;
(vii) to request the Company to repurchase their shares if they object to resolutions on
mergers or demergers adopted at the shareholders’ general meeting;
(viii) other rights provided by laws, administrative regulations, departmental rules,
securities regulatory rules of the place where the Company’s shares are listed, or the
Articles of Association.
Where the contents of resolutions passed by the shareholders’ general meeting or the
board of directors violate laws or administrative regulations, shareholders have the right to
request the People’s Court to declare such resolutions invalid. If the convening procedures or
voting methods of the shareholders’ general meeting or the board of directors violate laws,
administrative regulations or the Articles of Association, or if the contents of the resolutions
violate the Articles of Association, shareholders shall have the right to request the People’s
Court to revoke such resolutions within 60 days from the date of the resolution. However, this
shall not apply where the defects in the meeting convening procedures or voting methods of
the shareholders’ general meeting or the board of directors are merely minor and have not
produced any substantive impact on the resolutions.
Shareholders of the Company shall undertake the following obligations:
(i) to comply with laws, administrative regulations and the Articles of Association;
(ii) to pay the subscription amounts in accordance with the number of shares subscribed
and the method of subscription;
(iii) not to withdraw their share capital unless otherwise permitted by laws and
regulations;
(iv) not to abuse shareholders’ rights to harm the interests of the Company or other
shareholders, and not to abuse the Company’s independent legal person status and
the limited liability of shareholders to harm the interests of the Company’s creditors;
(v) other obligations provided by laws, administrative regulations, securities regulatory
rules of the place where the Company’s shares are listed, the requirements of the
relevant regulatory authorities, and the Articles of Association.
Where shareholders abuse their rights and cause losses to the Company or other
shareholders, they shall bear liability for compensation in accordance with the law.
APPENDIX V SUMMARY OF THE ARTICLES OF ASSOCIATION
– V-5 –


--- page 731 ---
If shareholders abuse the Company’s independent legal person status and the limited
liability of shareholders to evade debts and seriously damage the interests of the Company’s
creditors, they shall bear joint and several liability for the Company’s debts.
General Provisions of the Shareholders’ General Meetings
The shareholders’ general meeting of the Company shall be composed of all shareholders.
The shareholders’ general meeting is the Company’s authority organ and shall, in accordance
with the law, exercise the following powers:
(i) electing and replacing directors, and deciding on matters relating to the
remuneration of directors;
(ii) reviewing and approving the report of the Board of Directors;
(iii) reviewing and approving the Company’s profit distribution plan and loss recovery
plan;
(iv) passing resolutions on increasing or reducing the registered capital of the Company;
(v) passing resolutions on the issuance of corporate bonds;
(vi) passing resolutions on the merger, division, dissolution, liquidation, or change of
corporate form of the Company;
(vii) amending the Articles of Association;
(viii) passing resolutions on the engagement or dismissal of the accounting firm;
(ix) reviewing and approving the guarantee matters prescribed in Article 42;
(x) reviewing matters relating to the purchase or sale of major assets by the Company
within one year, where the transaction value exceeds 30% of the Company’s most
recent audited total assets;
(xi) reviewing and approving changes in the use of proceeds from fundraisings;
(xii) reviewing equity incentive plans and employee share ownership plans;
(xiii) reviewing other matters that shall be decided by the shareholders’ general meeting
under laws, administrative regulations, departmental rules, securities regulatory
rules of the place where the Company’s shares are listed, or the Articles of
Association.
APPENDIX V SUMMARY OF THE ARTICLES OF ASSOCIATION
– V-6 –


--- page 732 ---
The Company may, by a resolution of the shareholders’ general meeting, or by a
resolution of the Board as authorized by the Articles of Association or the shareholders’ general
meeting, issue shares or corporate bonds convertible into shares. The issue and implementation
thereof shall comply with the applicable laws and administrative regulations, the securities
regulatory rules of the place where the Company’s shares are listed, and the requirements of
the relevant regulatory authorities.
Save as otherwise provided in laws, administrative regulations or departmental rules, the
above powers of the shareholders’ general meeting shall not be exercised by the Board of
Directors or any other institution or individual by way of delegation.
The following guarantees to be provided by the Company shall be reviewed and approved
by the shareholders’ general meeting:
(i) any single guarantee where the amount exceeds 10% of the Company’s most recent
audited net assets;
(ii) any guarantee provided after the total external guarantees of the Company and its
controlling subsidiaries exceed 50% of the Company’s most recent audited net
assets;
(iii) guarantees provided to parties whose asset-liability ratio exceeds 70%;
(iv) where the total amount of guarantees in the past twelve months exceeds 30% of the
Company’s most recent audited total assets;
(v) any guarantee provided after the total external guarantees of the Company and its
controlling subsidiaries exceed 30% of the most recent audited total assets;
(vi) guarantees provided to shareholders, actual controllers, and their related parties;
(vii) other guarantee circumstances as prescribed by the stock exchange or the Articles of
Association.
Guarantees under item (iv) above shall be approved by more than two-thirds of the voting
rights held by shareholders present at the shareholders’ general meeting.
The meeting of shareholders consists of annual general meetings and extraordinary
general meetings. An annual general meeting shall be held once a year and within 6 months
after the end of the preceding financial year.
APPENDIX V SUMMARY OF THE ARTICLES OF ASSOCIATION
– V-7 –


--- page 733 ---
Under any of the following circumstances, the Company shall convene an extraordinary
general meeting within two months from the date of occurrence:
(i) when the number of directors falls below the statutory minimum or less than
two-thirds of the number required by the Articles of Association;
(ii) when the Company’s accumulated losses reach one-third of the total share capital;
(iii) when shareholders individually or collectively holding 10% or more of the
Company’s shares so request;
(iv) when the Board of Directors deems it necessary;
(v) when the Audit Committee proposes to convene the meeting;
(vi) other circumstances as prescribed by laws, administrative regulations, departmental
rules, or the Articles of Association.
Convocation of the Shareholders’ General Meetings
Upon approval by a majority of all independent directors, independent directors shall
have the right to propose to the Board of Directors the convening of an extraordinary general
meeting. Upon receiving such a proposal from the independent directors, the Board shall, in
accordance with laws, administrative regulations and the Articles of Association, provide a
written response stating whether it agrees or disagrees to convene the extraordinary general
meeting within 10 days. If the Board agrees, it shall issue a notice of the shareholders’ general
meeting within 5 days after the resolution is passed. If the Board disagrees, it shall state the
reasons and make an announcement.
The Audit Committee shall have the right to propose to the Board of Directors the
convening of an extraordinary general meeting and shall submit its proposal in writing. The
Board shall, in accordance with laws, administrative regulations and the Articles of
Association, provide a written response within 10 days stating whether it agrees or disagrees
to convene the meeting. If the Board agrees, it shall issue a notice of the shareholders’ general
meeting within 5 days after the resolution is passed. Any changes to the original proposal must
be approved by the Audit Committee. If the Board disagrees or fails to respond within 10 days,
it shall be deemed that the Board is unable or refuses to fulfill its duty to convene the
shareholders’ general meeting, and the Audit Committee may convene and preside over the
meeting on its own.
APPENDIX V SUMMARY OF THE ARTICLES OF ASSOCIATION
– V-8 –


--- page 734 ---
Shareholders individually or collectively holding 10% or more of the Company’s shares
(including preference shares with restored voting rights) may request the Board of Directors to
convene an extraordinary general meeting and shall submit the request in writing. The Board
shall, in accordance with laws, administrative regulations and the Articles of Association,
provide a written response within 10 days stating whether it agrees or disagrees to convene the
extraordinary general meeting.
If the Board agrees to convene an extraordinary general meeting, it shall issue a notice
of the meeting within 5 days after the resolution is passed. Any changes to the original request
must be approved by the relevant shareholders. If the Board disagrees or fails to respond within
10 days, the shareholders individually or collectively holding 10% or more of the Company’s
shares may request the Audit Committee in writing to convene the extraordinary general
meeting.
If the Audit Committee agrees to convene an extraordinary general meeting, it shall issue
the notice of the shareholders’ general meeting within 5 days upon receipt of the request. Any
changes to the original request must be approved by the relevant shareholders. If the Audit
Committee fails to issue the notice within the specified period, it shall be deemed that the Audit
Committee does not convene or preside over the meeting, and the shareholders who
individually or collectively hold 10% or more of the shares (including preference shares with
restored voting rights) for 90 consecutive days or more may convene and preside over the
meeting on their own.
Where the Audit Committee or shareholders decide to convene the general meeting on
their own, they shall notify the Board of Directors in writing and file with the stock exchange.
The Audit Committee and convening shareholders shall submit relevant supporting materials
to the stock exchange when issuing the notice and announcing the resolutions of the
shareholders’ general meeting.
Prior to the announcement of a shareholders’ general meeting resolution, the proportion
of shares held by convening shareholders (including preference shares with restored voting
rights) shall not be less than 10%.
For shareholders’ general meeting convened by the Audit Committee or shareholders, the
Board of Directors and the Board Secretary shall provide assistance. The Board shall provide
the register of shareholders as of the shareholding record date. If the Board fails to provide
such register, the conveners may apply to the securities registration and clearing institution for
it by presenting the relevant announcement of the shareholders’ general meeting notice. The
shareholder register obtained by the conveners shall not be used for purposes other than
convening the shareholders’ general meeting.
APPENDIX V SUMMARY OF THE ARTICLES OF ASSOCIATION
– V-9 –


--- page 735 ---
All necessary expenses incurred for shareholders’ general meeting convened by the Audit
Committee or shareholders shall be borne by the Company.
Proposals and Notices of the Shareholders’ General Meetings
The content of proposals submitted to the shareholders’ general meeting shall fall within
the scope of authority of the shareholders’ general meeting, have clear topics and specific
resolution matters, and comply with applicable laws, administrative regulations, the securities
regulatory rules of the place where the Company’s shares are listed, and the Articles of
Association.
When convening a shareholders’ general meeting, the Board of Directors, the Audit
Committee, and shareholders individually or collectively holding 1% or more of the
Company’s shares (including preference shares with restored voting rights) shall have the right
to submit proposals to the Company. Shareholders individually or collectively holding 1% or
more of the shares (including preference shares with restored voting rights) may submit interim
proposals in writing to the convener no later than 10 days prior to the shareholders’ general
meeting. The convener shall issue a supplemental notice within 2 days upon receipt of such
proposals to announce the content of the interim proposals and submit such proposals to the
shareholders’ general meeting for consideration. However, this shall not apply if the
extraordinary proposal violates laws, administrative regulations, or the Articles of Association,
or if it falls outside the authority of the shareholders’ general meeting. If the shareholders’
general meeting must be postponed due to the issuance of such supplemental notice in
accordance with the securities regulatory rules of the place where the Company’s shares are
listed, the shareholders’ general meeting shall be postponed accordingly.
Except under the aforementioned circumstances, once a notice of the shareholders’
general meeting has been issued, the convener shall not modify the proposals listed therein or
add new proposals. Proposals not listed in the notice or not in compliance with the Articles of
Association shall not be voted on or resolved at the shareholders’ general meeting.
The convener shall notify all shareholders of the annual general meeting in writing
(including by announcement) at least 21 days before the meeting, and notify all shareholders
of an extraordinary general meeting in writing (including by announcement) at least 15 days
before the meeting. The day of the meeting shall not be included in the notice period.
The notice of the shareholders’ general meeting shall include the following:
(i) the time, venue, and duration of the meeting;
(ii) matters and proposals to be submitted for consideration at the meeting;
APPENDIX V SUMMARY OF THE ARTICLES OF ASSOCIATION
– V-10 –


--- page 736 ---
(iii) a clear statement that all holders of ordinary shares (including holders of preference
shares with restored voting rights) and shareholders holding shares with special
voting rights are entitled to attend the shareholders’ general meeting and may
appoint a proxy in writing to attend and vote at the meeting on their behalf, and such
proxy need not be a shareholder of the Company;
(iv) the shareholding record date for shareholders entitled to attend the shareholders’
general meeting;
(v) the name and telephone number of the regular contact person for meeting affairs;
(vi) the time and procedures for voting via the internet or other means.
The notice and supplemental notice of the shareholders’ general meeting shall fully and
completely disclose the specific content of all proposals. The interval between the shareholding
record date and the date of the meeting shall not exceed seven working days. Once the
shareholding record date is confirmed, it shall not be changed.
Convening of the Shareholders’ General Meetings
All holders of ordinary shares registered on the shareholding record date (including
holders of preference shares with restored voting rights) and shareholders holding shares with
special voting rights or their proxies shall be entitled to attend the shareholders’ general
meeting, speak at the meeting, and exercise their voting rights in accordance with applicable
laws, regulations, and the Articles of Association (unless certain shareholders are required to
abstain from voting on specific matters under the securities regulatory rules of the place where
the Company’s shares are listed).
Shareholders may attend the shareholders’ general meeting in person or appoint one or
more proxies to attend, speak, and vote on their behalf. The proxy need not be a shareholder
of the Company.
Individual shareholders attending the meeting in person shall present their identity card
or other valid identification documents. A person attending the meeting on behalf of another
shall provide their valid identification documents and a written proxy authorization.
A corporate shareholder shall be represented by its legal representative or a proxy
appointed by the legal representative. If the legal representative attends the meeting, they shall
present their identity card and valid documents proving their legal representative status. A
person attending the meeting on behalf of another shall present their identity card and a written
proxy authorization duly issued by the legal representative (except where the shareholder is a
recognized clearing house (“Recognized Clearing House”), as defined by the applicable laws
of Hong Kong or the securities regulatory rules of the place where the Company’s shares are
listed, or its proxy).
APPENDIX V SUMMARY OF THE ARTICLES OF ASSOCIATION
– V-11 –


--- page 737 ---
The proxy authorization issued by a shareholder to attend a shareholders’ general meeting
shall include the following:
(i) the name of the appointing shareholder and the class and number of shares held;
(ii) the name of the proxy;
(iii) the shareholder’s specific instructions, including instructions on how to vote (for,
against, or abstain) on each of the proposals listed on the agenda of the shareholders’
general meeting;
(iv) date of issuance and validity period of the proxy authorization;
(v) signature (or seal) of the shareholder. If the shareholder is a corporate entity, the
proxy authorization must be affixed with the company seal or signed by an
authorized representative.
Where a proxy authorization is signed by someone authorized by the shareholder, the
power of attorney or other authorization documents shall be notarized. The notarized
documents, along with the proxy authorization, shall be kept at the Company’s registered office
or another location specified in the meeting notice on or before the date of the meeting.
If the shareholder is a recognized clearing house (or its proxy), it may authorize one or
more persons as it deems appropriate to act as its representative at any shareholders’ general
meeting or creditors’ meeting. Where more than one person is appointed, the authorization
shall specify the number and type of shares represented by each individual, and the
authorization must be signed by authorized personnel of the clearing house. The authorized
persons may exercise the rights of the clearing house (or its proxy) without presenting share
certificates, notarized authorization or other evidence of their authority, and shall enjoy the
same statutory rights as other shareholders, including the rights to speak and vote, as if they
were individual shareholders of the Company.
Where the shareholders’ general meeting requests the attendance of directors or senior
management, such directors or senior management shall attend and respond to questions from
the shareholders.
The shareholders’ general meeting shall be presided over by the Chairman of the Board.
If the Chairman is unable or unwilling to perform such duties, the Vice Chairman shall preside.
If the Vice Chairman is unable or unwilling to perform such duties, a director jointly elected
by more than half of the directors shall preside. Where the Audit Committee convenes the
shareholders’ general meeting, it shall be presided over by the convener of the Audit
Committee. If the convener of the Audit Committee is unable or unwilling to perform such
duties, a member of the Audit Committee jointly elected by more than half of the members of
the Audit Committee shall preside. If shareholders convene the shareholders’ general meeting
themselves, the convener or a representative elected by the conveners shall preside.
APPENDIX V SUMMARY OF THE ARTICLES OF ASSOCIATION
– V-12 –


--- page 738 ---
Where the meeting chairperson violates the Articles of Association or the relevant rules
of procedure, rendering the shareholders’ general meeting unable to proceed, the shareholders’
general meeting may, with the consent of shareholders representing more than half of the
voting rights present, elect another person to preside over the meeting and continue its
proceedings.
Voting and Resolutions at the Shareholders’ General Meetings
Resolutions at the shareholders’ general meeting shall be classified into ordinary
resolutions and special resolutions. An ordinary resolution shall be passed by more than half
of the voting rights held by shareholders (including proxies) present at the shareholders’
general meeting. A special resolution shall be passed by more than 2/3 of the voting rights held
by shareholders (including proxies) present at the shareholders’ general meeting.
The following matters shall be passed by ordinary resolutions of the shareholders’ general
meeting:
(i) work reports of the Board of Directors;
(ii) profit distribution plans and loss recovery plans proposed by the Board of Directors;
(iii) appointment or removal of members of the Board of Directors, and their
remuneration and payment methods;
(iv) other matters not required by laws, administrative regulations, securities regulatory
rules of the place where the Company’s shares are listed, or the Articles of
Association to be adopted by special resolutions.
The following matters shall be passed by special resolutions of the shareholders’ general
meeting:
(i) increase or reduction of the Company’s registered capital;
(ii) division, spin-off, merger, dissolution, liquidation;
(iii) amendments to the Articles of Association;
(iv) the purchase or sale of significant assets, or provision of guarantees to others, by the
Company within one year where the amount exceeds 30% of the Company’s most
recent audited total assets;
(v) equity incentive plans;
APPENDIX V SUMMARY OF THE ARTICLES OF ASSOCIATION
– V-13 –


--- page 739 ---
(vi) other matters as required by laws, administrative regulations, securities regulatory
rules of the place where the Company’s shares are listed, or the Articles of
Association, or those that are deemed by ordinary resolution of the shareholders’
general meeting to have a material impact on the Company and therefore require a
special resolution.
Shareholders (including proxies) shall exercise their voting rights based on the number of
voting shares they represent, with one vote for each share, except for shareholders of
non-ordinary shares. When casting votes, shareholders (including proxies) holding two or more
votes are not required to cast all votes in favor, against, or abstain.
When the shareholders’ general meeting deliberates on significant matters affecting the
interests of minority investors, the votes of such minority investors shall be counted separately,
and the result shall be promptly disclosed.
Shares held by the Company do not carry voting rights and shall not be included in the
total number of voting shares present at the shareholders’ general meeting. Pursuant to
applicable laws and the Hong Kong Listing Rules, if any shareholder is required to abstain
from voting on certain resolutions or is restricted to vote only for or against a resolution, any
votes cast by such shareholder or their proxy in violation of such requirement or restriction
shall not be counted toward the total number of voting shares.
Where shareholders acquire voting shares in the Company in violation of Article 63(1) or
(2) of the Securities Law, the excess portion shall not carry voting rights within thirty-six
months from the date of acquisition, and shall not be included in the total number of voting
shares present at the shareholders’ general meeting.
The Board of Directors, independent directors, shareholders holding more than 1% of the
voting shares, or investor protection institutions established in accordance with laws,
administrative regulations or regulations of the CSRS, may publicly solicit shareholders’
voting rights. In soliciting shareholders’ voting rights, the soliciting party shall fully disclose
to the shareholders concerned the specific voting intentions and other relevant information.
Solicitation of voting rights for consideration or in any disguised form of consideration is
prohibited. Except as required by law, the Company shall not impose a minimum shareholding
threshold for the solicitation of voting rights.
When the shareholders’ general meeting deliberates on related party transactions, related
shareholders shall abstain from voting, and the voting shares they represent shall not be
counted in the total number of valid votes. The announcement of the shareholders’ general
meeting resolution shall fully disclose the voting results of non-related shareholders.
APPENDIX V SUMMARY OF THE ARTICLES OF ASSOCIATION
– V-14 –


--- page 740 ---
DIRECTORS AND THE BOARD
Directors
The directors of the Company may include executive directors, non-executive directors,
and independent directors. Directors shall be elected or replaced by the shareholders’ general
meeting and may be removed by an ordinary resolution of the shareholders’ general meeting
before the expiration of their term of office. However, such removal shall not affect the
director’s right to claim damages in accordance with any contract. Each term of office for a
director shall be three years and may be renewed upon re-election in accordance with the
securities regulatory rules of the place where the Company’s shares are listed.
The term of a director shall commence on the date of assumption of office and shall end
upon the expiry of the term of the current Board. Where a director is not re-elected in a timely
manner upon the expiration of their term, the original director shall continue to perform their
duties in accordance with applicable laws, administrative regulations, departmental rules,
securities regulatory rules of the place where the Company’s shares are listed, and the Articles
of Association until the new director takes office.
One director on the Board of Directors of the Company shall be an employee
representative, elected through the employees’ representative congress, employees’ meeting, or
other democratic means. Directors may concurrently hold senior management positions, but the
total number of directors who are also senior management or employee representatives shall
not exceed half of the total number of directors.
A director may resign before the expiration of their term. A written resignation report
shall be submitted to the Company. A director’s resignation shall take effect on the date the
Company receives the resignation report, and the Company shall disclose the relevant
information within two trading days. If a resignation causes the number of directors to fall
below the statutory minimum, or if the resignation of an independent director causes the
number or proportion of independent directors on the Board or its committees to no longer
comply with applicable laws, regulations, securities regulatory rules of the place where the
Company’s shares are listed, or the Articles of Association, or results in the absence of an
independent director with accounting or financial expertise, the resigning director shall
continue to perform their duties in accordance with applicable regulations and the Articles of
Association until a new director takes office.
Directors shall comply with laws, administrative regulations, the securities regulatory
rules of the place where the Company’s shares are listed, and the Articles of Association. They
owe a duty of fiduciary to the Company, shall take measures to avoid conflicts between their
own interests and the interests of the Company, and shall not use their powers to seek improper
personal gain.
APPENDIX V SUMMARY OF THE ARTICLES OF ASSOCIATION
– V-15 –


--- page 741 ---
Directors owe the following fiduciary duties to the Company:
(i) Directors shall not misappropriate the Company’s property or embezzle its funds;
(ii) Directors shall not deposit Company funds in accounts opened in their own name or
in the name of another individual;
(iii) Directors shall not use their position to bribe others or receive other unlawful
income;
(iv) Without reporting to the Board of Directors or shareholders’ general meeting and
obtaining approval in accordance with these Articles of Association, directors shall
not, directly or indirectly, enter into contracts or transactions with, the Company;
(v) Directors shall not use their position to secure business opportunities belonging to
the Company for themselves or others, except where the Board of Directors or
shareholders’ general meeting has been informed and approved, or the Company,
under laws, administrative regulations, or these Articles of Association, is unable to
pursue such opportunity;
(vi) Directors shall not operate, or assist others to operate, businesses similar to the
Company’s without reporting to the Board of Directors or shareholders’ general
meeting and obtaining approval from the shareholders’ general meeting;
(vii) Directors shall not accept commissions from third parties in transactions with the
Company for their own benefit;
(viii) Directors shall not disclose the Company’s confidential information without
authorization;
(ix) Directors shall not use their connected relationships to harm the Company’s
interests;
(x) Directors shall perform other fiduciary duties as required by laws, administrative
regulations, departmental rules, the securities regulatory rules of the place where the
Company’s shares are listed, and these Articles of Association.
Any income obtained by a director in violation of these provisions shall belong to the
Company. Directors shall be liable to compensate the Company for any losses caused.
APPENDIX V SUMMARY OF THE ARTICLES OF ASSOCIATION
– V-16 –


--- page 742 ---
Directors shall comply with laws, administrative regulations, and these Articles of
Association and owe fiduciary duties to the Company. In performing their duties, they shall
exercise the reasonable care and attention that a prudent manager would exercise for the best
interests of the Company. Directors owe the following duties of diligence:
(i) to exercise the powers granted by the Company with due care, diligence, and
prudence to ensure the Company’s business complies with national laws,
administrative regulations, and economic policies, and remains within the scope of
business stipulated in the business license;
(ii) to treat all shareholders fairly;
(iii) to stay informed about the Company’s business operations and management;
(iv) to sign written confirmations on the Company’s periodic reports and ensure the
information disclosed by the Company is truthful, accurate, and complete;
(v) to provide accurate information and data to the Audit Committee and not to obstruct
the Audit Committee from performing their duties;
(vi) other duties of diligence as provided by laws, administrative regulations,
departmental rules, securities regulatory rules of the place where the Company’s
shares are listed, and the Articles of Association.
Board of Directors
The Company shall establish a Board of Directors. The Board shall consist of seven
directors, including three independent directors. The Board shall have one Chairman and one
Vice Chairman.
The Board of Directors shall exercise the following powers:
(i) convening the shareholders’ general meeting and reporting to it;
(ii) implementing resolutions of the shareholders’ general meeting;
(iii) determining the Company’s business plan and investment proposals;
(iv) formulating the Company’s profit distribution and loss recovery plans;
(v) formulating proposals for increasing or decreasing registered capital, issuing bonds
or other securities, and listing;
(vi) preparing proposals for significant acquisitions, share repurchases, mergers,
demergers, dissolution, or changes in corporate form;
APPENDIX V SUMMARY OF THE ARTICLES OF ASSOCIATION
– V-17 –


--- page 743 ---
(vii) within the scope authorized by the shareholders’ general meeting, deciding on
external investments, acquisition or disposal of assets, asset pledges, external
guarantees, entrusted wealth management, related party transactions, and charitable
donations;
(viii) determining the internal management structure of the Company;
(ix) appointing or removing the President, Board Secretary, and other senior
management personnel, and determining their remuneration and disciplinary
matters; and, based on the nomination of the President, appointing or removing
Executive Vice Presidents, Vice Presidents, the Chief Financial Officer, and other
senior management personnel, and determining their remuneration and disciplinary
matters;
(x) formulating the Company’s fundamental management systems;
(xi) drafting amendments to the Articles of Association;
(xii) managing matters related to information disclosure;
(xiii) proposing the appointment or replacement of the accounting firm responsible for
auditing the Company to the shareholders’ general meeting;
(xiv) hearing reports by the President and reviewing their performance;
(xv) other powers granted by laws, administrative regulations, departmental rules, the
securities regulatory rules of the place where the Company’s shares are listed, the
Articles of Association, and the shareholders’ general meeting.
The Board shall establish clear decision-making authority and stringent review and
approval procedures for matters such as external investments, acquisition or disposal of assets,
asset pledges, entrusted wealth management, related party transactions, and donations. Major
investment projects shall be reviewed by relevant experts or professionals and submitted to the
shareholders’ general meeting for approval.
The Board shall have one Chairman and one Vice Chairman, both elected by a majority
of all directors.
The Chairman shall exercise the following powers:
(i) presiding over shareholders’ general meeting and convening and presiding over
Board meetings;
(ii) supervising and inspecting the implementation of Board resolutions;
APPENDIX V SUMMARY OF THE ARTICLES OF ASSOCIATION
– V-18 –


--- page 744 ---
(iii) signing documents of the Board of Directors;
(iv) under emergency circumstances such as natural disasters or other force majeure
events, exercising special decision-making powers that comply with the law and are
in the best interest of the Company, and reporting to the Board and shareholders’
general meeting afterward;
(v) exercising the powers under items (ii), (xiii), and (xv) of Article 107 of the Articles
of Association during the recess of the Board.
The above powers shall not include matters which, under the Company Law, other laws
and regulations, or the securities regulatory rules of the place where the Company’s shares are
listed, must be reviewed and approved by the Board or the shareholders’ general meeting.
The Board of Directors shall hold at least four regular meetings each year. Meetings shall
be convened by the Chairman, with written notice provided to all directors at least 14 days
prior. Shareholders holding more than 1/10 of the voting rights, more than 1/3 of the directors,
or the Audit Committee may propose to convene an interim Board meeting. Upon receiving
such proposal, the Chairman shall convene and preside over the meeting within 10 days.
A Board meeting may be held only if more than half of the directors are present. A
resolution of the Board must be passed by more than half of all directors. Each director shall
have one vote when voting on Board resolutions.
Any director who has a connected relationship with any enterprise or individual involved
in a resolution of the Board of Directors shall promptly report the relationship in writing to the
Board of Directors. Such director shall abstain from voting and shall not act as proxy for other
directors in voting. The Board meeting may proceed if attended by more than half of the
disinterested directors, and the resolution shall be passed by a majority of such disinterested
directors. If there are fewer than three disinterested directors present, the matter shall be
submitted to the shareholders’ general meeting for consideration. If any laws, regulations, or
securities regulatory rules of the place where the Company’s shares are listed impose additional
restrictions on the participation or voting rights of directors in Board meetings, such rules shall
prevail.
Special Committees of the Board of Directors
The Board of Directors of the Company shall establish special committees, including the
Strategy Committee, Audit Committee, Nomination Committee, Remuneration and Appraisal
Committee, and Sustainability Committee. All members of these committees shall be directors.
For the Audit Committee, Nomination Committee, and Remuneration and Appraisal
Committee, independent directors shall constitute a majority, and the convener shall be an
independent director. The Audit Committee shall have three members, two of whom shall be
APPENDIX V SUMMARY OF THE ARTICLES OF ASSOCIATION
– V-19 –


--- page 745 ---
independent directors, with at least one independent director being an accounting professional.
Members of the Audit Committee shall be directors who do not hold senior management
positions in the Company, and the convener shall be the independent director with accounting
expertise.
President and Other Senior Management Personnel
The Company shall appoint one President, who shall be hired or dismissed by the Board
of Directors. Each term of the President shall be three years and may be renewed upon
reappointment. The President shall be accountable to the Board of Directors and shall exercise
the following powers:
(i) presiding over the Company’s production and operational management, organizing
the implementation of Board resolutions, and reporting to the Board;
(ii) organizing the implementation of the Company’s annual business plan and
investment proposals;
(iii) formulating proposals for the internal management structure of the Company;
(iv) drafting the Company’s basic management systems;
(v) formulating the Company’s specific rules and regulations;
(vi) proposing to the Board the appointment or dismissal of Executive Vice Presidents,
Vice Presidents, the Chief Financial Officer, and other senior management
personnel;
(vii) deciding on the appointment or dismissal of management personnel not subject to
the decision of the Board;
(viii) other powers conferred by the Articles of Association or granted by the Board of
Directors.
The President shall attend meetings of the Board of Directors.
The Company shall appoint one Executive Vice President, and several Vice Presidents and
other senior management personnel. These individuals shall be nominated by the President and
appointed or dismissed by the Board of Directors. The Executive Vice President, Vice
Presidents, and other senior management personnel shall report directly to the President and
fulfill their responsibilities according to the internal organizational structure of the Company.
APPENDIX V SUMMARY OF THE ARTICLES OF ASSOCIATION
– V-20 –


--- page 746 ---
The Company shall appoint a Board Secretary, who shall be responsible for preparing
shareholders’ general meeting and Board meetings, managing documents and shareholder
information, and handling information disclosure matters. The Board Secretary shall comply
with applicable laws, administrative regulations, departmental rules, securities regulatory rules
of the place where the Company’s shares are listed, and the provisions of the Articles of
Association.
FINANCIAL ACCOUNTING SYSTEM AND AUDIT
Financial Accounting System
The Company shall establish its financial accounting system in accordance with
applicable laws, administrative regulations, and the requirements of relevant state authorities.
The Company shall submit and/or disclose its annual report to the securities regulatory
authority of the place where its shares are listed within four months after the end of each fiscal
year. The Company shall also submit and/or disclose its interim report within two months after
the end of the first half of each fiscal year. The above annual and interim reports shall be
prepared in accordance with relevant laws, administrative regulations, and the securities
regulatory rules of the place where the Company’s shares are listed.
The Company shall not maintain separate accounting books other than the statutory ones.
The Company’s assets shall not be deposited in accounts opened under any individual’s name.
When distributing after-tax profits for the current year, the Company shall allocate 10%
to the statutory reserve. If the accumulated statutory reserve exceeds 50% of the Company’s
registered capital, no further allocations are required. If the statutory reserve is insufficient to
cover losses from previous years, such losses shall be covered with the current year’s profits
before any further allocation to the statutory reserve. After allocating the statutory reserve from
after-tax profits, the Company may, by resolution of the shareholders’ general meeting, allocate
discretionary reserves from after-tax profits. The remaining after-tax profits, after covering
losses and allocating reserves, shall be distributed among shareholders in proportion to their
shareholdings, except where otherwise provided in the Articles of Association. Where the
shareholders’ general meeting distributes profits in contravention of the Company Law, the
shareholders shall return the improperly distributed profits to the Company. Where such
distribution causes losses to the Company, the responsible shareholders, directors, and senior
management shall be liable for compensation. Shares held by the Company shall not be entitled
to profit distributions.
The Company shall appoint one or more receiving agents in Hong Kong for the holders
of H Shares. Such receiving agents shall receive and hold, on behalf of the relevant H Share
holders, dividends and other amounts payable by the Company in respect of H Shares for
further distribution to those holders. The appointed receiving agents must comply with
applicable laws, regulations, and the securities regulatory rules of the place where the
Company’s shares are listed.
APPENDIX V SUMMARY OF THE ARTICLES OF ASSOCIATION
– V-21 –


--- page 747 ---
The Company’s reserves shall be used to cover losses, expand production and operations,
or be converted into share capital. In covering the Company’s losses, the discretionary reserve
and statutory reserve shall be applied first. If such reserves are insufficient, the capital reserve
may be applied in accordance with regulations. When the statutory reserve is converted into
share capital, the retained balance of such reserve shall not be less than 25% of the Company’s
registered capital prior to the conversion.
Profit Distribution
The Company’s profit distribution policy is as follows:
(i) The Company shall implement a proactive profit distribution policy that emphasizes
reasonable returns for investors while taking into account sustainable development.
The Company may distribute interim profits. The profit distribution policy shall
maintain continuity and stability.
(ii) The Company may distribute dividends in the form of cash, shares, a combination
of cash and shares, or other methods permitted by laws, regulations, and the
securities regulatory rules of the place where the Company’s shares are listed. Profit
distribution shall not exceed the cumulative distributable profits and shall not impair
the Company’s ability to continue as a going concern.
(iii) In terms of distribution methods, the Company shall prioritize cash dividends over
share dividends.
1. Each year, cash dividends distributed by the Company shall be no less than
20% of the distributable profits realized for that year.
2. For each profit distribution, cash dividends shall account for at least 40% of
the total distribution.
3. Where conditions permit, cash dividends shall be the preferred method. If
share dividends are adopted, there must be genuine and reasonable factors such
as business growth and dilution of net assets per share.
(iv) Distribution intervals for profit distribution:
1. Provided that the Company is profitable for the year and has positive
cumulative undistributed profits, it shall distribute profits at least once per
year.
2. The Company may distribute interim cash dividends. The Board of Directors
may propose interim distributions based on the Company’s profitability, cash
flow, stage of development, and capital needs.
APPENDIX V SUMMARY OF THE ARTICLES OF ASSOCIATION
– V-22 –


--- page 748 ---
(v) Conditions for profit distribution:
1. Specific conditions for cash dividends:
Subject to the Company’s ability to operate sustainably and develop in the long
term, if the Company is profitable for the year and has positive cumulative
undistributed profits, and there are no significant investment plans or major capital
expenditures (excluding projects funded by raised capital), the Company shall
distribute dividends in cash. Annual cash dividends shall not be less than 20% of the
distributable profits for that year. The specific dividend ratio for each year shall be
proposed by the Board based on the Company’s annual profitability and future
capital plans.
2. Conditions for share dividends:
If the Company operates well and demonstrates growth potential, and the
Board believes that indicators such as earnings per share, share price, and net assets
per share are not aligned with the scale of the share capital, the Company may, while
meeting the required cash dividend ratio, also distribute dividends in the form of
shares. When determining the amount to be distributed as share dividends, the
Company shall fully consider whether the resulting total share capital aligns with the
Company’s business scale, profit growth rate, and dilution of net assets per share,
and assess the impact on future debt financing costs, to ensure the distribution plan
aligns with the overall and long-term interests of all shareholders.
(vi) If any shareholder has illegally occupied Company funds, the Company shall deduct
the amount of cash dividends payable to such shareholder to offset the occupied
funds.
(vii) Adjustment to the profit distribution policy:
1. If significant changes occur in the external business environment or the
Company’s own operating conditions, requiring an adjustment to the profit
distribution policy, the adjusted policy shall comply with the regulations of the
CSRS and the stock exchange.
2. During the process of studying and evaluating the adjustment of the profit
distribution policy, the Company may communicate with minority shareholders
via phone, fax, mail, email, the investor relations platform on the Company’s
website, or other means to fully solicit and address their opinions and
concerns.
APPENDIX V SUMMARY OF THE ARTICLES OF ASSOCIATION
– V-23 –


--- page 749 ---
3. Any adjustment or amendment to the profit distribution policy as set out in the
Articles of Association must be approved by the Board and then submitted to
the shareholders’ general meeting for consideration. The Company shall
protect shareholders’ rights and interests, provide detailed explanations and
justification for the proposed changes in the meeting agenda, and the resolution
must be approved by more than two-thirds of the voting rights held by
shareholders (including proxies) present at the shareholders’ general meeting.
Internal Audit
The Company shall implement an internal audit system, specifying the leadership
structure, responsibilities and authority, staffing, funding, use of audit findings, and
accountability mechanisms for internal audit work. The internal audit system shall be
implemented upon approval by the Board of Directors and disclosed externally.
Engagement of Accounting Firms
The Company shall engage accounting firms that meet the requirements of the Securities
Law to provide services such as auditing of financial statements, verification of net assets, and
other related consultancy services. The engagement term shall be one year and may be
renewed.
The appointment or dismissal of the accounting firm by the Company shall be submitted
to the Board of Directors for consideration after approval by a majority of all members of the
Audit Committee, and shall be decided by the shareholders’ general meeting. The Board of
Directors shall not appoint an accounting firm before such approval is obtained.
The Company shall ensure that the engaged accounting firm is provided with true and
complete accounting vouchers, books, financial reports, and other accounting information. The
Company shall not refuse, conceal, or falsify such information.
The audit fees of the accounting firm shall be determined by the shareholders’ general
meeting.
If the Company dismisses or does not renew the engagement of the accounting firm, it
shall notify the firm at least 30 days in advance. When the shareholders’ general meeting votes
on the dismissal of the accounting firm, the firm shall be allowed to state its opinion. If the
accounting firm resigns, it shall explain to the shareholders’ general meeting whether the
Company has engaged in any improper conduct.
APPENDIX V SUMMARY OF THE ARTICLES OF ASSOCIATION
– V-24 –


--- page 750 ---
MERGER, DIVISION, CAPITAL INCREASE AND CAPITAL REDUCTION
A merger of the Company may take the form of either absorption or consolidation. In an
absorption merger, one company absorbs another and the absorbed company is dissolved. In a
consolidation merger, two or more companies merge to establish a new company, and all
merging parties are dissolved.
For a merger, the parties involved shall enter into a merger agreement and prepare a
balance sheet and an inventory of assets. Within 10 days from the date of the merger resolution,
the Company shall notify its creditors, and within 30 days, publish an announcement in the
Securities Times ,o n www.cninfo.com.cn , and the HKExnews website ( www.hkexnews.hk )o r
the National Enterprise Credit Information Publicity System. Creditors may, within 30 days
from receipt of the notice, or within 45 days from the date of the announcement if no notice
is received, request the Company to repay debts or provide appropriate guarantees. Upon
merger, the surviving or newly established company shall assume all rights and obligations of
the merged parties.
In the case of a division, the Company’s assets shall be divided accordingly. A balance
sheet and an inventory of assets shall be prepared. Within 10 days from the date of the division
resolution, the Company shall notify its creditors, and within 30 days, publish an
announcement in the Securities Times ,o n www.cninfo.com.cn , and the HKExnews website
(www.hkexnews.hk ) or the National Enterprise Credit Information Publicity System. Debts
incurred prior to the division shall be jointly and severally assumed by the companies resulting
from the division, unless otherwise agreed in writing between the Company and its creditors
prior to the division.
When the Company intends to reduce its registered capital, it shall prepare a balance sheet
and an inventory of assets. Within 10 days from the date of the capital reduction resolution, the
Company shall notify its creditors, and within 30 days, publish an announcement in the
Securities Times ,o n www.cninfo.com.cn , and the HKExnews website ( www.hkexnews.hk )o r
the National Enterprise Credit Information Publicity System. Creditors may, within 30 days
from receipt of the notice, or within 45 days from the date of the announcement if no notice
is received, require the Company to repay debts or provide appropriate guarantees. Where the
Company reduces its registered capital, the capital contributions or shares of the shareholders
shall be reduced in proportion to their respective shareholdings, except as otherwise provided
by law or these Articles of Association.
Where a merger or division of the Company results in changes to the registration
particulars, the Company shall apply for change registration with the company registration
authority in accordance with the law. Where the Company is dissolved, it shall apply for
deregistration in accordance with the law. Where a new company is established, it shall apply
for incorporation registration in accordance with the law.
Where the Company increases or reduces its registered capital, it shall apply for change
registration with the company registration authority in accordance with the law.
APPENDIX V SUMMARY OF THE ARTICLES OF ASSOCIATION
– V-25 –


--- page 751 ---
DISSOLUTION AND LIQUIDATION
The Company shall be dissolved under any of the following circumstances:
(i) the expiry of its business term as stipulated in the Articles of Association or the
occurrence of other dissolution events as provided in the Articles of Association;
(ii) a resolution of dissolution passed by the shareholders’ general meeting;
(iii) a merger or division of the Company that necessitates dissolution;
(iv) revocation of its business license, being ordered to close down, or being deregistered
in accordance with the law;
(v) where the Company experiences serious difficulties in its operations and
management, and its continued existence would cause significant loss to
shareholders’ interests, and such issues cannot be resolved through other means,
shareholders holding 10% or more of all voting rights may petition the People’s
Court for dissolution.
Where the Company encounters any of the dissolution events specified in the preceding
provisions, it shall publicly disclose the dissolution event on the National Enterprise Credit
Information Publicity System within ten days.
Where the Company is dissolved under circumstances (i) or (ii) above, and the assets have
not yet been distributed to shareholders, it may continue to exist by amending the Articles of
Association or pursuant to a resolution of the shareholders’ general meeting. Any amendment
to the Articles or resolution of the shareholders’ general meeting pursuant to the preceding
paragraph must be approved by more than two-thirds of the voting rights held by the
shareholders present at the shareholders’ general meeting.
Where the Company is dissolved under circumstances (i), (ii), (iv), or (v) above, it shall
be liquidated. Directors, who are the liquidation obligors of the Company, shall serve as the
liquidation team within fifteen days of the dissolution and carry out the liquidation. The
liquidation team shall be composed of the directors, unless otherwise provided in the Articles
of Association or determined by a resolution of the shareholders’ general meeting. Where the
persons responsible for liquidation fail to perform their duties in a timely manner, causing
losses to the Company or its creditors, they shall be liable for compensation.
APPENDIX V SUMMARY OF THE ARTICLES OF ASSOCIATION
– V-26 –


--- page 752 ---
During the liquidation period, the liquidation committee shall exercise the following
powers:
(i) to take inventory of the Company’s assets and prepare a balance sheet and an
inventory of assets;
(ii) to notify and announce to creditors;
(iii) to handle any outstanding business related to liquidation;
(iv) to pay any outstanding taxes and taxes arising during liquidation;
(v) to settle claims and debts;
(vi) to distribute the remaining assets of the Company after settling debts;
(vii) to represent the Company in civil litigation.
The liquidation committee shall notify creditors within 10 days of its formation and make
an announcement within 60 days in the Securities Times ,o n www.cninfo.com.cn , and the
HKExnews website ( www.hkexnews.hk ) or the National Enterprise Credit Information
Publicity System. Creditors shall declare their claims within 30 days from receipt of such
notice, or within 45 days from the date of the announcement if no notice is received. When
declaring their claims, creditors shall explain relevant details and provide supporting
documentation. The liquidation committee shall register all declared claims. No debt
repayments shall be made to creditors during the claim declaration period.
After the inventory of assets and preparation of the balance sheet and asset inventory, the
liquidation committee shall prepare a liquidation plan and submit it to the shareholders’
general meeting or the People’s Court for confirmation. The Company’s remaining assets, after
payment of liquidation expenses, employee wages, social insurance premiums, statutory
compensations, outstanding taxes, and debts, shall be distributed among shareholders
according to their respective shareholdings. During the liquidation period, the Company shall
continue to exist but shall not conduct any business activities unrelated to liquidation. No asset
distribution shall be made to shareholders until the debts have been fully settled in accordance
with the provisions above.
If the liquidation committee, finds that the assets are insufficient to cover its debts after
the inventory of assets and preparation of the balance sheet and asset inventory, it shall apply
to the People’s Court for bankruptcy liquidation in accordance with the law. Upon acceptance
of the bankruptcy application by the People’s Court, the liquidation committee shall hand over
the liquidation matters to the bankruptcy administrator appointed by the People’s Court. After
completion of the liquidation, the liquidation committee shall prepare a liquidation report,
submit it to the shareholders’ general meeting or the People’s Court for confirmation, file it
with the company registration authority, and apply for deregistration.
APPENDIX V SUMMARY OF THE ARTICLES OF ASSOCIATION
– V-27 –


--- page 753 ---
Members of the liquidation committee shall perform their duties of fiduciary and
diligence. Members who neglect their duties and causes losses to the Company shall be liable
for compensation; if losses are caused to creditors due to intentional misconduct or gross
negligence, they shall also be liable for compensation.
If the Company is declared bankrupt in accordance with the law, bankruptcy liquidation
shall be carried out in accordance with the applicable laws on enterprise bankruptcy.
AMENDMENT OF THE ARTICLES OF ASSOCIATION
The Company shall amend its Articles of Association under any of the following
circumstances:
(i) where amendments to the Company Law or other relevant laws, administrative
regulations, or the securities regulatory rules of the place where the Company’s
shares are listed result in conflicts with the current provisions of the Articles of
Association;
(ii) where changes in the Company’s circumstances render the provisions of the Articles
of Association inconsistent with the actual situation;
(iii) where the shareholders’ general meeting resolves to amend the Articles of
Association.
Where the amendments to the Articles of Association passed by resolution of the
shareholders’ general meeting are subject to approval by the competent authority, they shall be
submitted for such approval. Where the amendments involve changes to registration
particulars, the Company shall apply for change registration in accordance with the law.
The Board of Directors shall amend the Articles of Association based on the resolutions
passed at the shareholders’ general meeting and the approval opinions of the relevant
competent authorities.
If the matters amended in the Articles of Association involve information that is required
to be disclosed under applicable laws, regulations, or the securities regulatory rules of the place
where the Company’s shares are listed, the Company shall make public disclosure in
accordance with such requirements.
APPENDIX V SUMMARY OF THE ARTICLES OF ASSOCIATION
– V-28 –


--- page 754 ---
1. FURTHER INFORMATION ABOUT OUR COMPANY
A. Incorporation
Our Company was established under the PRC laws under the name of Henan Neixiang
County Muyuan Breeding Co., Ltd. (ʮ̡) on July 13, 2000 and
was converted to a joint stock company on December 28, 2009 and listed on the Shenzhen
Stock Exchange in January 28, 2014.
Our registered office is located at Shuitian Village, Guanzhang Town, Neixiang, Nanyang,
Henan Province, PRC. We were registered as a non-Hong Kong company under Part 16 of the
Companies Ordinance on May 27, 2025 and our principal place of business in Hong Kong is
at Room 1920, 19/F, Lee Garden One, 33 Hysan Avenue, Causeway Bay, Hong Kong. Ms.
Leung Wing Han Sharon is the authorized representative of the Company for the acceptance
of service of process and notices on behalf of our Company in Hong Kong. The address for
service of process on our Company in Hong Kong is the same as our principal place of business
in Hong Kong as set out above.
As our Company was established in the PRC, we are subject to the relevant laws and
regulations of the PRC. A summary of the relevant aspects of laws and regulations of the PRC
and our Articles of Association is set out in “Regulatory Overview” in this prospectus and
Appendix V to this prospectus respectively.
B. Changes in Share Capital of Our Company
Save as disclosed below and in the section headed “History, Development and Corporate
Structure”, there has been no other alteration in our total issued share capital within the two
years immediately preceding the date of this prospectus.
Pursuant to Convertible Bonds issued by our Company and listed on the Shenzhen Stock
Exchange on September 10, 2021 (stock code: 127045), the period for conversion by way of
our Company issuing new A Shares commenced on February 21, 2022 and will end on August
15, 2027. See “ History, Development and Corporate Structure — Other Major Shareholding
Changes — Issuance of Convertible Bonds. ” By June 30, 2023, the number of A Shares issued
pursuant to the conversion of the Convertible Bonds was 133,765 A Shares, increasing our
Company’s registered share capital by RMB133,765.00.
Between July 1, 2023 and September 30, 2024, a total of 3,806 A Shares were issued
pursuant to the conversion of the Convertible Bonds. As such, our Company’s registered share
capital was overall increased by RMB3,806.00.
APPENDIX VI STATUTORY AND GENERAL INFORMATION
– VI-1 –


--- page 755 ---
As approved by the Board on December 5, 2023 and March 11, 2024, and by the
shareholders on December 21, 2023 and May 22, 2024, respectively, 1,529,253 and 1,061,366
A Shares repurchased by our Company under the repurchase mandate for 2022 Restricted
Shares Incentive Plan were cancelled on December 18, 2024. The total registered capital of our
Company was as a result decreased by RMB2,590,619.00.
Between October 1, 2024 to March 31, 2025, a total of 5,635 A Shares were issued
pursuant to the conversion of the Convertible Bonds. As such, our Company’s registered share
capital was increased by RMB5,635.00.
Between April 1, 2025 to the Latest Practicable Date, a total of 2,993 A Shares were
issued pursuant to the conversion of the Convertible Bonds. As such, our Company’s registered
share capital was increased by RMB2,993.00.
A repurchase mandate for the repurchase of A Shares for the purpose of our Company’s
employee share incentive schemes was approved by our Board on September 25, 2024. The
repurchase mandate was valid for 12 months from the date of approval of the repurchase
mandate by the Board. Upon repurchase, the repurchased A Shares are held under our Company
stock repurchase account and do not carry any shareholders’ rights, including but not limited
to voting rights at the Shareholders’ meeting and dividend rights. Any repurchased A Shares not
granted to employees within 36 months after the completion of the repurchase shall be
cancelled. According to the repurchase mandate, the amount could be used for the repurchase
will be no more than RMB4 billion and no less than RMB3 billion. Calculating based on the
maximum repurchase price of RMB57.22 per A Share, the amount of A Shares could be
repurchased under the repurchase mandate will be between 52,429,200 and 69,905,600 A
Shares. As of the Latest Practicable Date, the Company repurchased 69,586,523 A Shares under
the mandate.
C. Changes in Share Capital of our Major Subsidiaries
We have applied to the Stock Exchange for, and the Stock Exchange has granted us a
waiver from strict compliance with the requirements of paragraph 26 of Appendix D1A to the
Listing Rules in relation to the disclosure of information relating to the changes in the share
capital of any member of our Group within the two years immediately preceding the date of
this prospectus. For details, see “Waivers and Exemptions — Particulars of Information of Our
Subsidiaries” in this prospectus.
APPENDIX VI STATUTORY AND GENERAL INFORMATION
– VI-2 –


--- page 756 ---
The following alterations in the registered capital of our major subsidiaries have taken
place within the two years preceding the date of this prospectus:
(1) Muyuan Meat Co., Ltd. (ʮ̡)
The registered share capital of Muyuan Meat Co., Ltd. (ʮ̡) was
increased from RMB2,500,000,000 to RMB3,000,000,000 on September 11, 2024 due to our
Company’s capital injection.
(2) Nanjing Jiangning Muyuan Livestock Husbandry Co., Ltd. (
ࠢ
ʮ̡)
The registered share capital of Nanjing Jiangning Muyuan Livestock Husbandry
Co., Ltd. (ʮ̡) was increased from RMB2,010,000,000 to
RMB2,360,000,000 on August 8, 2024 due to our Company’s capital injection.
(3) Ningling Muyuan Livestock Husbandry Co., Ltd. (ʮ̡)
The registered share capital of Ningling Muyuan Livestock Husbandry Co., Ltd. (ى
ʮ̡) was increased from RMB520,000,000 to RMB846,818,800 on April 25, 2025
due to capital injection of RMB326,818,800 from ABC Financial Asset Investment Co., Ltd.
(ʮ̡), an Independent Third Party.
(4) Tongyu Muyuan Meat Food Co., Ltd. (
ʮ̡)
The registered share capital of Tongyu Muyuan Meat Food Co., Ltd. (Ϟ
ʮ̡) was increased from RMB450,000,000 to RMB610,000,000 on May 21, 2025 due to
capital injections by Muyuan Meat Co., Ltd. (ʮ̡).
(5) Naimanqi Muyuan Meat Food Production Co., Ltd. (ʮ̡)
The registered share capital of Naimanqi Muyuan Meat Food Production Co., Ltd. ( քਟ
ʮ̡) was increased from RMB300,000,000 to RMB500,000,000 on
August 23, 2024 due to a capital injection by Muyuan Meat Co., Ltd. (ʮ̡).
APPENDIX VI STATUTORY AND GENERAL INFORMATION
– VI-3 –


--- page 757 ---
(6) Tieling Muyuan Meat Food Co., Ltd. (ʮ̡)
The registered share capital of Tieling Muyuan Meat Food Co., Ltd. (Ϟ
ʮ̡) was increased from RMB410,000,000 to RMB510,000,000 on December 23, 2025 due
to a capital injection by Muyuan Meat Co., Ltd. (ʮ̡).
D. Resolutions Passed by Our Shareholders in Relation to the Global Offering
Pursuant to the Shareholders’ meeting held May 16, 2025, the following resolutions,
among other things, were (subject to the relevant regulatory approval, filing and registration)
duly passed:
(a) the issue by the Company of H Shares with a nominal value of RMB1.00 each and
such H Shares be listed on the Stock Exchange;
(b) the number of H Shares to be issued shall be up to 8% of the total share capital of
our Company upon completion of the Global Offering and before any exercise of the
Over-allotment Option, and the grant of the Over-allotment Option in respect of no
more than 15% of the number of H Shares initially issued pursuant to the Global
Offering;
(c) authorization of the Board or its authorized individual to handle all matters relating
to, among other things, the Global Offering, the issue of the H Shares and the
Listing; and
(d) subject to the completion of the Global Offering, the conditional adoption of the
revised Articles of Association, which shall become effective on the Listing Date;
and the authorization of the Board to amend the Articles of Association in
accordance with relevant laws and regulations and upon the request from the Stock
Exchange and relevant PRC regulatory authorities.
2. FURTHER INFORMATION ABOUT OUR BUSINESS
A. Summary of Material Contracts
We have entered into the following contracts (not being contracts entered into in the
ordinary course of business) within two years preceding the date of this prospectus which are
or may be material:
(a) a cornerstone investment agreement dated January 27, 2026 entered into among our
Company, Charoen Pokphand Foods Public Company Limited, Morgan Stanley Asia
Limited, CITIC Securities (Hong Kong) Limited, Goldman Sachs (Asia) L.L.C. and
CLSA Limited, with respect to a subscription of H Shares at the Offer Price in the
aggregate amount of Hong Kong dollars equivalent of US$200 million;
APPENDIX VI STATUTORY AND GENERAL INFORMATION
– VI-4 –


--- page 758 ---
(b) a cornerstone investment agreement dated January 27, 2026 entered into among our
Company, Wii Pte Ltd, Morgan Stanley Asia Limited, CITIC Securities (Hong
Kong) Limited, Goldman Sachs (Asia) L.L.C. and CLSA Limited, with respect to a
subscription of H Shares at the Offer Price in the aggregate amount of Hong Kong
dollars equivalent of US$50 million;
(c) a cornerstone investment agreement dated January 27, 2026 entered into among our
Company, HPRY Holdings Limited, Morgan Stanley Asia Limited, CITIC Securities
(Hong Kong) Limited, Goldman Sachs (Asia) L.L.C. and CLSA Limited, with
respect to a subscription of H Shares at the Offer Price in the aggregate amount of
Hong Kong dollars equivalent of US$20 million;
(d) a cornerstone investment agreement dated January 27, 2026 entered into among our
Company, Sinochem Hong Kong (Group) Company Limited (ಥ(ණྠ)ʮ
̡), Morgan Stanley Asia Limited, CITIC Securities (Hong Kong) Limited,
Goldman Sachs (Asia) L.L.C. and CLSA Limited, with respect to a subscription of
H Shares at the Offer Price in the aggregate amount of Hong Kong dollars equivalent
of US$65 million;
(e) a cornerstone investment agreement dated January 27, 2026 entered into among our
Company, Hong Kong Henan Agri International Co., Limited (ʮ
̡), Morgan Stanley Asia Limited, CITIC Securities (Hong Kong) Limited,
Goldman Sachs (Asia) L.L.C. and CLSA Limited, with respect to a subscription of
H Shares at the Offer Price in the aggregate amount of Hong Kong dollars equivalent
of US$50 million;
(f) a cornerstone investment agreement dated January 27, 2026 entered into among our
Company, FIL Investment Management (Hong Kong) Limited (as agent and
fiduciary for the funds and accounts listed in schedule 2 thereto), Morgan Stanley
Asia Limited, CITIC Securities (Hong Kong) Limited, Goldman Sachs (Asia) L.L.C.
and CLSA Limited, with respect to a subscription of H Shares at the Offer Price in
the aggregate amount of Hong Kong dollars equivalent of US$80 million;
(g) a cornerstone investment agreement dated January 27, 2026 entered into among our
Company, RBC Global Asset Management (Asia) Limited (as sub-investment
manager for and on behalf of the investors listed in schedule 2 thereto), Morgan
Stanley Asia Limited, CITIC Securities (Hong Kong) Limited, Goldman Sachs
(Asia) L.L.C. and CLSA Limited, with respect to a subscription of H Shares at the
Offer Price in the aggregate amount of Hong Kong dollars equivalent of US$30
million;
(h) a cornerstone investment agreement dated January 27, 2026 entered into among our
Company, Perseverance Asset Management International (Singapore) Pte. Ltd.
(acting in its capacity as an investment advisor or investment manager and on behalf
of certain investment funds and separated managed accounts), Morgan Stanley Asia
APPENDIX VI STATUTORY AND GENERAL INFORMATION
– VI-5 –


--- page 759 ---
Limited, CITIC Securities (Hong Kong) Limited, Goldman Sachs (Asia) L.L.C. and
CLSA Limited, with respect to a subscription of H Shares at the Offer Price in the
aggregate amount of Hong Kong dollars equivalent of US$32.6 million;
(i) a cornerstone investment agreement dated January 27, 2026 entered into among our
Company, Huatai Capital Investment Limited, Morgan Stanley Asia Limited, CITIC
Securities (Hong Kong) Limited, Goldman Sachs (Asia) L.L.C. and CLSA Limited,
with respect to a subscription of H Shares at the Offer Price in the aggregate amount
of Hong Kong dollars equivalent of US$27.4 million;
(j) a cornerstone investment agreement dated January 27, 2026 entered into among our
Company, Ping An of China Asset Management (Hong Kong) Company Limited,
Morgan Stanley Asia Limited, CITIC Securities (Hong Kong) Limited, Goldman
Sachs (Asia) L.L.C. and CLSA Limited, with respect to a subscription of H Shares
at the Offer Price in the aggregate amount of Hong Kong dollars equivalent of
US$30 million;
(k) a cornerstone investment agreement dated January 27, 2026 entered into among our
Company, Dajia Life Insurance Co., Ltd. (ʮ̡), Morgan
Stanley Asia Limited, CITIC Securities (Hong Kong) Limited, Goldman Sachs
(Asia) L.L.C. and CLSA Limited, with respect to a subscription of H Shares at the
Offer Price in the aggregate amount of Hong Kong dollars equivalent of US$30
million;
(l) a cornerstone investment agreement dated January 27, 2026 entered into among our
Company, UBS Asset Management (Singapore) Ltd. (in its capacity as the delegate
of the investment manager for and on behalf of the investors listed in Schedule 3
thereto), Morgan Stanley Asia Limited, CITIC Securities (Hong Kong) Limited,
Goldman Sachs (Asia) L.L.C. and CLSA Limited, with respect to a subscription of
H Shares at the Offer Price in the aggregate amount of Hong Kong dollars equivalent
of US$20 million;
(m) a cornerstone investment agreement dated January 27, 2026 entered into among our
Company, Midea Development Holding (BVI) Limited, Morgan Stanley Asia
Limited, CITIC Securities (Hong Kong) Limited, Goldman Sachs (Asia) L.L.C. and
CLSA Limited, with respect to a subscription of H Shares at the Offer Price in the
aggregate amount of Hong Kong dollars equivalent of US$30 million;
(n) a cornerstone investment agreement dated January 27, 2026 entered into among our
Company, Integrated Core Strategies (Asia) Pte. Ltd., Morgan Stanley Asia Limited,
CITIC Securities (Hong Kong) Limited, Goldman Sachs (Asia) L.L.C. and CLSA
Limited, with respect to a subscription of H Shares at the Offer Price in the
aggregate amount of Hong Kong dollars equivalent of US$10 million;
APPENDIX VI STATUTORY AND GENERAL INFORMATION
– VI-6 –


--- page 760 ---
(o) a cornerstone investment agreement dated January 27, 2026 entered into among our
Company, Jane Street Asia Trading Limited, Morgan Stanley Asia Limited, CITIC
Securities (Hong Kong) Limited, Goldman Sachs (Asia) L.L.C. and CLSA Limited,
with respect to a subscription of H Shares at the Offer Price in the aggregate amount
of Hong Kong dollars equivalent of US$10 million; and
(p) the Hong Kong Underwriting Agreement.
APPENDIX VI STATUTORY AND GENERAL INFORMATION
– VI-7 –


--- page 761 ---
B. Our Intellectual Property Rights
(a) Trademarks
As of the Latest Practicable Date, we had registered the following trademarks which we
consider to be or may be material to our business:
No. Registered owner Trademark Registration No. Class Valid through
1. /H1118/H1118/H1118the Company
 22470776 40 February 6, 2028
2. /H1118/H1118/H1118the Company
 22470812 31 February 6, 2028
3. /H1118/H1118/H1118the Company
 22470881 44 February 6, 2028
4. /H1118/H1118/H1118the Company
 22470467 5 April 6, 2028
5. /H1118/H1118/H1118the Company
 22470696 29 April 20, 2028
6. /H1118/H1118/H1118the Company
 28174949 31 November 20,
2028
7. /H1118/H1118/H1118the Company
 45762874 11 December 6, 2030
8. /H1118/H1118/H1118the Company
 7954562 40 March 20, 2031
9. /H1118/H1118/H1118the Company
 9725646 31 September 6,
2032
10. /H1118/H1118the Company
 10652633 44 May 13, 2033
11. /H1118/H1118the Company
 10652576 40 May 13, 2033
APPENDIX VI STATUTORY AND GENERAL INFORMATION
– VI-8 –


--- page 762 ---
No. Registered owner Trademark Registration No. Class Valid through
12. /H1118/H1118the Company
 10652604 11 May 13, 2033
13. /H1118/H1118the Company
 10652558 31 May 13, 2033
14. /H1118/H1118the Company
 10620083 29 June 6, 2033
15. /H1118/H1118the Company
 56034742 7 June 13, 2033
16. /H1118/H1118the Company
 10855874 40 July 27, 2033
17. /H1118/H1118the Company
 10855946 11 July 27, 2033
18. /H1118/H1118the Company
 61309229 35 July 27, 2033
19. /H1118/H1118the Company
 10855980 44 August 6, 2033
20. /H1118/H1118the Company
 10855852 31 August 6, 2033
21. /H1118/H1118the Company
 69013457 29 August 6, 2033
22. /H1118/H1118the Company
 67884813 31 October 6, 2033
APPENDIX VI STATUTORY AND GENERAL INFORMATION
– VI-9 –


--- page 763 ---
No. Registered owner Trademark Registration No. Class Valid through
23. /H1118/H1118the Company
 12104623 29 July 20, 2034
24. /H1118/H1118the Company
 10652538 29 August 6, 2034
(b) Patents
(i) Registered Patents
As of the Latest Practicable Date, we were the registered owner of and had the right to
use the following patents which we consider to be or may be material to our business:
No. Patent Patentee
Place of
Registration Patent Number Term of Patent
1. /H1118/H1118/H1118Harmless Treatment
Method and System
for Dead Livestock
and Poultry ( षϥອ
ʷஈଣ˙
ʿՉஈଣӻ୕)
the Company PRC 2014102160838 20 years from
May 22, 2014
2. /H1118/H1118/H1118Comprehensive Solid-
Liquid Separation
Method and System
for Waste Liquid
from Farms ( ቮಟఙ
રϮᄻ૰ո૰ၝΥ
ʿӻ୕)
the Company, Henan
Muyuan Ecological
Environment
Technology Co.,
Ltd. (͛࿒
ʮ̡)
PRC 2015101863934 20 years from
April 20, 2015
3. /H1118/H1118/H1118Comprehensive
Treatment System
for Manure and
Waste in Large
Specialized Hog
Farms (ਖ਼ุʷ
ቮሥఙᐰϮၝΥஈ
ଣӻ୕)
the Company PRC 2015101877551 20 years from
April 21, 2015
APPENDIX VI STATUTORY AND GENERAL INFORMATION
– VI-10 –


--- page 764 ---
No. Patent Patentee
Place of
Registration Patent Number Term of Patent
4. /H1118/H1118/H1118Resource Recycling
System for Manure
Reprocessing in
Hog Farms ( ቮሥఙ
Ύஈଣ༟๕ృ
ᐑл͜ӻ୕)
the Company, Henan
Muyuan Ecological
Environment
Technology Co.,
Ltd. (͛࿒
ʮ̡)
PRC 2015101877528 20 years from
April 21, 2015
5. /H1118/H1118/H1118Manure Treatment
System for Large-
Scale Livestock and
Poultry Farms ( ஝ᅼ
ʷອळቮಟᐰϮஈ
ଣӻ୕)
the Company, Henan
Muyuan Ecological
Environment
Technology Co.,
Ltd. (͛࿒
ʮ̡)
PRC 2016208428765 10 years from
August 5, 2016
6. /H1118/H1118/H1118V entilation and
Cooling System for
Large Hog Farms in
Summer (ٸ
౬ं౳
๝ӻ୕)
the Company PRC 2015101905388 20 years from
April 22, 2015
7. /H1118/H1118/H1118Ecological Recycling
System for Manure
Treatment in Large-
Scale Hog Farms
(஝ᅼʷቮሥఙᐰϮ
ஈଣ͛࿒ృᐑӻ୕)
the Company, Henan
Muyuan Ecological
Environment
Technology Co.,
Ltd. (͛࿒
ʮ̡)
PRC 2015101877123 20 years from
April 21, 2015
8. /H1118/H1118/H1118Air Intake System for
Constant
Temperature
Passage in Hog
Farms (㛬๝༸
ӻ୕)
the Company PRC 2017217863040 10 years from
December 20,
2017
9. /H1118/H1118/H1118V entilation and
Heating System for
Hog Farms (ٙٸ
าӻ୕)
the Company PRC 2017217863055 10 years from
December 20,
2017
10. /H1118/H1118Automatic Manure
Cleaning and
Collection System
for Large-Scale
Farms ( ஝ᅼʷቮಟ
Іਗ૶ଣʿ
ϗණӻ୕)
the Company, Henan
Muyuan Ecological
Environment
Technology Co.,
Ltd. (͛࿒
ʮ̡)
PRC 2016106105951 20 years from
July 29, 2016
APPENDIX VI STATUTORY AND GENERAL INFORMATION
– VI-11 –


--- page 765 ---
No. Patent Patentee
Place of
Registration Patent Number Term of Patent
11. /H1118/H1118One kind of Three-
Way V alve Based
on Plate Chain
Conveyor
(෦ᆵ၍ᗡ
ɧஷუ)
the Company PRC 2019206794597 10 years from
May 13, 2019
12. /H1118/H1118One kind of Dead Hog
Collection V ehicle
(ɓ၇ዂϥሥԓ)
the Company PRC 2019214949547 10 years from
September 9,
2019
13. /H1118/H1118One kind of Dead Hog
Collection V ehicle
and Its Body ( ɓ၇
ዂϥሥԓʿՉԓ᜗)
the Company PRC 2019216470700 10 years from
September 27,
2019
14. /H1118/H1118One kind of Manure
Cleaning Robot ( ɓ
၇૶ᐰዚኜɛ)
the Company PRC 2019216246955 10 years from
September 26,
2019
15. /H1118/H1118One kind of Board
Cleaning Robot ( ɓ
ዚኜɛ)
the Company PRC 201921624826X 10 years from
September 26,
2019
16. /H1118/H1118One kind of Foam
Cleaning Machine
(ዚ)
the Company PRC 2019215253025 10 years from
September 9,
2019
17. /H1118/H1118One kind of Manure
Pushing Robot ( ɓ
၇પᐰዚኜɛ)
the Company PRC 2019215173389 10 years from
September 11,
2019
18. /H1118/H1118One kind of Ground
Inspection Robot
(ԚᏨዚኜ
ɛ)
the Company PRC 2020204186782 10 years from
March 27,
2020
19. /H1118/H1118One kind of Electric
Push Rod Three-
Way V alve ( ɓ၇ཥ
ਗપ૖όɧஷუ)
the Company PRC 2020203760002 10 years from
March 23,
2020
20. /H1118/H1118One kind of Feeding
Auger (ഏ
Ꮂ)
the Company PRC 2020206504968 10 years from
April 26, 2020
21. /H1118/H1118One kind of Feeding
Device for Pregnant
and Lactating Sows
(ձ
ༀໄ)
the Company PRC 2020203811080 10 years from
March 23,
2020
22. /H1118/H1118One kind of Feeding
System for
Finishing Houses
(ӻ
୕)
the Company PRC 2020203811061 10 years from
March 23,
2020
APPENDIX VI STATUTORY AND GENERAL INFORMATION
– VI-12 –


--- page 766 ---
No. Patent Patentee
Place of
Registration Patent Number Term of Patent
23. /H1118/H1118One kind of Hog-
herding Robot ( ɓ၇
ᚨႼዚኜɛ)
the Company PRC 2020203750373 10 years from
March 23,
2020
24. /H1118/H1118One kind of Feeding
System and Feeding
Device (ӻ
ༀໄ)
the Company PRC 2020206720149 10 years from
April 27, 2020
25. /H1118/H1118One kind of Livestock
and Poultry
Transport V ehicle
with Navigation
Function ( ɓ၇ՈϞ
ᖕອ༶
፩ԓ)
the Company PRC 2020224850386 10 years from
October 30,
2020
26. /H1118/H1118One kind of Feeding
Equipment
(ɓ၇ཱᒸண௪)
the Company PRC 2020214502273 10 years from
July 21, 2020
27. /H1118/H1118One kind of Handheld
Hog Weight
Estimation Device
(όሥ͜П
ண௪)
the Company PRC 2020232529170 10 years from
December 27,
2020
28. /H1118/H1118One kind of Hog-
herding Robot
(ɓ၇Ⴜሥዚኜɛ)
the Company PRC 202023123066X 10 years from
December 23,
2020
29. /H1118/H1118One kind of Fully
Automatic Hog
Collection Machine
(ɓ၇ΌІਗዂሥዚ)
the Company PRC 2020227646808 10 years from
November 26,
2020
30. /H1118/H1118One kind of Ear Tag
Pliers ( ɓ၇Ѐᅺཌ)
the Company PRC 2020232508916 10 years from
December 27,
2020
31. /H1118/H1118Feeder ( ཱᒸኜ) the Company PRC 2020232266921 10 years from
December 24,
2020
32. /H1118/H1118One kind of Electronic
Cage Scale ( ɓ၇ཥ
ɿᛐ၈)
the Company PRC 2020232469061 10 years from
December 25,
2020
33. /H1118/H1118One kind of Drainage
Control Module ( ɓ
၇ɨ˥છՓᅼଡ଼)
the Company PRC 2020232268518 10 years from
December 24,
2020
34. /H1118/H1118One kind of Inspection
Robot ( ɓ၇ԚᏨዚ
ኜɛ)
the Company PRC 2020231955575 10 years from
December 23,
2020
APPENDIX VI STATUTORY AND GENERAL INFORMATION
– VI-13 –


--- page 767 ---
No. Patent Patentee
Place of
Registration Patent Number Term of Patent
35. /H1118/H1118One kind of
Temperature and
Humidity Sensor
(ෂชኜ)
the Company PRC 2020232489633 10 years from
December 26,
2020
36. /H1118/H1118One kind of Building
Pigsty (ሥ
ٸ)
the Company PRC 2020225298862 10 years from
November 3,
2020
37. /H1118/H1118One kind of Manual
and Automatic
Integrated Louver
Control Device ( ɓ
׵
ϵ໢೿છՓ
ༀໄ)
the Company PRC 2021205456073 10 years from
March 15,
2021
38. /H1118/H1118Heating and
V entilation
Equipment for Pig
Farms Based on
Floor Heating (׵
ሥఙиᆠʿ
ண௪)
the Company PRC 2015101829986 20 years from
April 17, 2015
39. /H1118/H1118One kind of Needle-
Free Injector ( ɓ၇
ኜ)
the Company PRC 2020231299557 10 years from
December 23,
2020
40. /H1118/H1118One kind of Fixed
Weight Estimation
Device (П
ண௪)
the Company PRC 2020232529166 10 years from
December 27,
2020
41. /H1118/H1118One kind of Single-
story Hog Farm ( ɓ
ٸ)
the Company PRC 2021232299652 10 years from
December 21,
2021
42. /H1118/H1118Smart Weight
Estimator (ࠠ
ᄃ)
the Company PRC 2022300836983 15 years from
February 21,
2022
43. /H1118/H1118One kind of Electric
Ear Tag Pliers ( ɓ၇
ཥਗόЀᅺཌ)
the Company PRC 2022207441999 10 years from
April 1, 2022
44. /H1118/H1118One kind of Track
Detection Device
(༸Ꮸ಻ༀໄ)
the Company PRC 2022207644226 10 years from
April 2, 2022
45. /H1118/H1118Manure Plug ( ᐰ෦) the Company PRC 2022301453023 15 years from
March 20,
2022
APPENDIX VI STATUTORY AND GENERAL INFORMATION
– VI-14 –


--- page 768 ---
No. Patent Patentee
Place of
Registration Patent Number Term of Patent
46. /H1118/H1118One kind of Ear Tag
Fixing Mechanism
and Ear Tag Pliers
(ዚ࿴
ʿЀᅺཌ)
the Company PRC 2022206165934 10 years from
March 21,
2022
47. /H1118/H1118One kind of Hanging
Track Inspection
Equipment ( ɓ၇Ξ
ԚᏨண௪)
the Company PRC 2022212272863 10 years from
May 22, 2022
48. /H1118/H1118One kind of Multi-
Degree Cleaning
Robot ( ɓ၇εІ͟
ዚኜɛ)
the Company PRC 2022215711129 10 years from
June 22, 2022
49. /H1118/H1118One kind of Drinking
Water Disinfection
Equipment ( ɓ၇භ
ண௪)
the Company PRC 2022212196588 10 years from
May 21, 2022
50. /H1118/H1118One kind of
Temperature and
Humidity Sensor
Device (ܓ
ෂชኜༀໄ)
the Company PRC 202221896605X 10 years from
July 22, 2022
51. /H1118/H1118One kind of Swing
Arm Chassis ( ɓ၇
ᆵ)
the Company PRC 2022203488835 10 years from
February 21,
2022
52. /H1118/H1118One kind of Needle-
Free Injector ( ɓ၇
ኜ)
the Company PRC 2022217196141 10 years from
July 4, 2022
53. /H1118/H1118One kind of Livestock
Temperature
Detection Method,
Device, Equipment,
and Storage
Medium (ळ
eༀ
ໄeண௪ձπᎷʧ
ሯ)
the Company PRC 2021100330209 20 years from
January 11,
2021
APPENDIX VI STATUTORY AND GENERAL INFORMATION
– VI-15 –


--- page 769 ---
No. Patent Patentee
Place of
Registration Patent Number Term of Patent
54. /H1118/H1118One kind of Livestock
Quantity
Identification
Method, Device,
Equipment, and
Storage Medium ( ɓ
ळᅰඎᗆй˙
eༀໄeண௪ձ
πᎷʧሯ)
the Company PRC 2021100330177 20 years from
January 11,
2021
55. /H1118/H1118One kind of Feeding
Device and Method
for Calculating the
Amount of Feed in
the Feeding Device
(ࠇ
ࣘ
ج)
the Company PRC 2022101570416 20 years from
February 21,
2022
56. /H1118/H1118One kind of Double
Drainage Feeding
Trough ( ɓ၇ᕐɨ˥
ᅻ)
the Company PRC 2023205903396 10 years from
March 23,
2023
57. /H1118/H1118One kind of Liquid
Supply System for
Air Deodorization
and Ammonia
Reduction
Equipment ( ɓ၇͜
ऄண
Զ૰ӻ୕)
the Company PRC 202321322553X 10 years from
May 29, 2023
58. /H1118/H1118One kind of Central
Heating System for
Pigsties (ٸ
ණʕԶา̋ᆠӻ୕)
the Company PRC 2023205903288 10 years from
March 23,
2023
59. /H1118/H1118One kind of
Deodorization
Device ( ɓ၇ৰঔༀ
ໄ)
the Company, Henan
Muyuan Ecological
Environment
Technology Co.,
Ltd. (͛࿒
ʮ̡)
PRC 2023205903432 10 years from
March 23,
2023
60. /H1118/H1118One kind of Weather
Station ( ɓ၇ं൥
१)
the Company PRC 2023203637694 10 years from
March 2, 2023
APPENDIX VI STATUTORY AND GENERAL INFORMATION
– VI-16 –


--- page 770 ---
No. Patent Patentee
Place of
Registration Patent Number Term of Patent
61. /H1118/H1118One kind of Grain
Storage Detection
Equipment ( ɓ၇ᔋ
Ꮸ಻ண௪)
the Company PRC 2023222660910 10 years from
August 22,
2023
62. /H1118/H1118One kind of
Deodorization
System ( ɓ၇ৰঔӻ
୕)
the Company, Henan
Muyuan Ecological
Environment
Technology Co.,
Ltd. (͛࿒
ʮ̡)
PRC 2023223570593 10 years from
August 31,
2023
63. /H1118/H1118Isolation Method for
Porcine Delta
Coronavirus ( ሥᅃ
ʱ
ج)
the Company PRC 2022104072361 20 years from
April 15, 2022
64. /H1118/H1118One kind of Foam
Generation Module
and Smart Shower
System (೯
͛ᅼ෯ʿ౽ঐ૸क
ӻ୕)
the Company PRC 2023222660677 10 years from
August 22,
2023
65. /H1118/H1118One kind of Smart
Shower System ( ɓ
၇౽ঐ૸कӻ୕)
the Company PRC 2023222660291 10 years from
August 22,
2023
66. /H1118/H1118One kind of Needle-
Free Injection
Equipment and Its
Drive Rod Guide
Device (ء
ண௪ʿՉᚨਗ૖
ኬΣༀໄ)
the Company PRC 2023234132732 10 years from
December 14,
2023
67. /H1118/H1118One kind of Needle-
Free Injection
Equipment and its
Needle-Free
Injection Pressure
Adjustment Device
(ண௪
Ꮐɢ
ሜ዆ༀໄ)
the Company PRC 2023234132802 10 years from
December 14,
2023
APPENDIX VI STATUTORY AND GENERAL INFORMATION
– VI-17 –


--- page 771 ---
No. Patent Patentee
Place of
Registration Patent Number Term of Patent
68. /H1118/H1118One kind of Needle-
Free Injection
Equipment and its
Needle-Free
Injection
Component ( ɓ၇ೌ
ண௪ʿՉೌ
ଡ଼΁)
the Company PRC 202323413286X 10 years from
December 14,
2023
69. /H1118/H1118One kind of Needle-
Free Injector Liquid
Outlet Sealing
Device and Needle-
Free Injector ( ɓ၇
ኜ̈૰ɹ
ء
ኜ)
the Company PRC 2023234112029 10 years from
December 14,
2023
70. /H1118/H1118One kind of Needle-
Free Injector Multi-
Injection Gear
Adjustment Device
(ኜε
ᏦЗሜືༀໄ)
the Company PRC 2023234126943 10 years from
December 14,
2023
71. /H1118/H1118Syringe and its
Injection Structure
(ഐ
࿴)
the Company PRC 2023234177076 10 years from
December 14,
2023
72. /H1118/H1118One kind of Push
Device for Needle-
Free Injector ( ɓ၇
ٙ
પਗༀໄ)
the Company PRC 2023234179809 10 years from
December 14,
2023
73. /H1118/H1118One kind of Drinking
Water Medication
Device ( ɓ၇භ˥̋
ᖹༀໄ)
the Company PRC 2023235807542 10 years from
December 27,
2023
74. /H1118/H1118One kind of Needle-
Free Injector ( ɓ၇
ኜ)
the Company PRC 2023234179495 10 years from
December 14,
2023
75. /H1118/H1118Needle-Free Injector
and its Injection
Head (ኜʿ
᎘)
the Company PRC 2023234179688 10 years from
December 14,
2023
APPENDIX VI STATUTORY AND GENERAL INFORMATION
– VI-18 –


--- page 772 ---
No. Patent Patentee
Place of
Registration Patent Number Term of Patent
76. /H1118/H1118One kind of Pig
Transport and Sale
System ( ɓ၇͛ሥᔷ
༶ਯርӻ୕)
the Company PRC 2020112087961 20 years from
November 3,
2020
77. /H1118/H1118One kind of Ball
Machine Grain
Storage Detection
Equipment ( ɓ၇ଢ
Ꮸ಻ண௪)
the Company PRC 2024205886427 10 years from
March 25,
2024
78. /H1118/H1118One kind of Hog
Kidney and Leaf
Fat Separation
Device ( ɓ၇ሥ໐ၾ
ʱᕎༀໄ)
Muyuan Meat
Co., Ltd. (࠮
ʮ̡)
PRC 2021229015886 10 years from
November 24,
2021
79. /H1118/H1118One kind of Smart
Weighing
Equipment ( ɓ၇౽
ண௪)
Muyuan Meat
Co., Ltd. (࠮
ʮ̡)
PRC 2022219272031 10 years from
July 26, 2022
80. /H1118/H1118One kind of Hide
Cutting Device ( ɓ
၇ͤੵ൒਒ༀໄ)
Muyuan Meat
Co., Ltd. (࠮
ʮ̡)
PRC 2022215698478 10 years from
June 22, 2022
81. /H1118/H1118One kind of Large Rib
Cutting Tool ( ɓ၇
ɽરʱ௲ɠՈ)
Muyuan Meat
Co., Ltd. (࠮
ʮ̡)
PRC 202320158584X 10 years from
August 23,
2023
82. /H1118/H1118One kind of Three-
Section Carcass
Cutting Device ( ɓ
ʱ௲ༀ
ໄ)
Muyuan Meat
Co., Ltd. (࠮
ʮ̡)
PRC 202322278178X 10 years from
August 23,
2023
83. /H1118/H1118Navigation Method,
Device, and
Readable Storage
Medium for Mobile
Robots Based on
Reflective Columns
(୅ਗ
ኬঘ˙
eண௪ʿ̙ᛘπ
Ꮇʧሯ)
Muyuan Meat
Co., Ltd. (࠮
ʮ̡)
PRC 2022100158946 20 years from
January 7,
2022
84. /H1118/H1118One kind of Automatic
Bagging Equipment
for Frozen Products
(Іਗༀ஛
ண௪)
Muyuan Meat
Co., Ltd. (࠮
ʮ̡)
PRC 2023225845745 10 years from
September 21,
2023
APPENDIX VI STATUTORY AND GENERAL INFORMATION
– VI-19 –


--- page 773 ---
No. Patent Patentee
Place of
Registration Patent Number Term of Patent
85. /H1118/H1118One kind of Automatic
Metal Stamping
Device for
Livestock Carcass
Skin (ळঋ᜗
᙮ድ
ༀໄ)
Muyuan Meat
Co., Ltd. (࠮
ʮ̡)
PRC 2023231539200 10 years from
November 21,
2023
86. /H1118/H1118One kind of Hog Hoof
Hair Scraping
Equipment ( ɓ၇ሥ
፡Ւˣண௪)
Muyuan Meat
Co., Ltd. (࠮
ʮ̡)
PRC 2022101581660 20 years from
February 21,
2022
87. /H1118/H1118One kind of Pork
Middle Section
Diversion System
(ݴ
ᔷΣӻ୕)
Muyuan Meat
Co., Ltd. (࠮
ʮ̡)
PRC 2023228449355 10 years from
October 23,
2023
88. /H1118/H1118One kind of Large
Intestine Manure
Removal
Mechanism ( ɓ၇ɽ
໑̘ᐰዚ࿴)
Muyuan Meat
Co., Ltd. (࠮
ʮ̡)
PRC 2024204336792 10 years from
March 6, 2024
89. /H1118/H1118One kind of Livestock
Grading Marking
Equipment (ޒ
ॴᅺাண௪)
Muyuan Meat
Co., Ltd. (࠮
ʮ̡)
PRC 2023234599595 10 years from
December 19,
2023
90. /H1118/H1118One kind of Auxiliary
Intestinal Piercing
Mechanism and
Intestinal Piercing
Machine ( ɓ၇Ⴞп
໑ዚ)
Muyuan Meat
Co., Ltd. (࠮
ʮ̡)
PRC 2024204336627 10 years from
March 6, 2024
APPENDIX VI STATUTORY AND GENERAL INFORMATION
– VI-20 –


--- page 774 ---
(c) Domain Names
As of the Latest Practicable Date, we had registered the following domain names which
we consider to be or may be material to our business:
No. Domain Name Registered Owner Expiry Date
1./H1118/H1118/H1118mu-yuan.cn The Company May 17, 2026
2./H1118/H1118/H1118mu-yuan.net The Company April 22, 2026
3./H1118/H1118/H1118mu-yuan.com The Company April 22, 2026
4./H1118/H1118/H1118muyuanfoods.com The Company January 5, 2028
5./H1118/H1118/H1118muyuanren.com The Company May 17, 2026
6./H1118/H1118/H1118mu-yuan.com.cn The Company May 4, 2026
7./H1118/H1118/H1118imuyuan.com The Company March 11, 2029
8./H1118/H1118/H1118imuyuan.com.cn The Company March 11, 2026
9./H1118/H1118/H1118muyuanfoods.com.cn The Company January 5, 2028
(d) Copyrights
As of the Latest Practicable Date, we had registered the following copyrights which we
consider to be or may be material to our business:
No. Copyright
Registered
Owner Registration No.
Place of
Registration
Registration
Date
1. /H1118/H1118/H1118Architectural Design
Drawings for 75,000
Growth Farm Building
for Hog Farm (7.5 ຬ
ጘ
ྡ)
The Company GuoZuoDengZi
(਷Ъ೮ο)-
2024-J-
00306521
PRC October 16, 2024
2. /H1118/H1118/H1118Architectural Design
Drawings for 63,000
Full Line Farm
Single-Sided Building
Hog Farm (6.3 ຬΌᇞ
ጘ
ྡ)
The Company GuoZuoDengZi
(਷Ъ೮ο)-
2024-J-
00306522
PRC October 16, 2024
3. /H1118/H1118/H1118Smart Muyuan Software
(Enterprise Edition)
V1.0.4.5 (ழ
΁(وV1.0.4.5)
The Company 2019SR0681252 PRC July 2, 2019
APPENDIX VI STATUTORY AND GENERAL INFORMATION
– VI-21 –


--- page 775 ---
No. Copyright
Registered
Owner Registration No.
Place of
Registration
Registration
Date
4. /H1118/H1118/H1118Muyuan Food Breeding
Management System
V1.3 (ԃ၇၍
ଣӻ୕V1.3)
The Company 2019SR0685623 PRC July 3, 2019
5. /H1118/H1118/H1118Muyuan Equipment
Cloud Management
System V1.0 (ண
௪ථ၍ଣӻ୕V1.0)
The Company 2021SR1132824 PRC July 30, 2021
6. /H1118/H1118/H1118Feed Factory Automated
Production System
V1.0 (ᅀІਗʷ͛
ପӻ୕V1.0)
The Company 2021SR1279885 PRC August 27, 2021
7. /H1118/H1118/H1118Temperature, Humidity,
and Dust
Concentration Control
System in Hog House
V1.0 (ʫ๝᐀
છՓӻ
୕V1.0)
The Company 2022SR0097251 PRC January 14, 2022
8. /H1118/H1118/H1118Smart Sales Transaction
Breeding Pig and
Piglet Sales
Management System
V1.0 (၇
ሥ˺ሥቖਯ၍ଣӻ୕
V1.0)
The Company 2022SR0258914 PRC February 22, 2022
9. /H1118/H1118/H1118African Swine Fever
Epidemic Map
Software V1.0 (ݲڢ
ઋήྡழ΁
V1.0)
The Company 2022SR0259084 PRC February 22, 2022
10. /H1118/H1118Muyuan Weighing
Management System
V1.0 (ཀᆼ၍ଣӻ
୕V1.0)
The Company 2022SR0375747 PRC March 22, 2022
11. /H1118/H1118Feed Sales Price
Management System
V1.0 (၍
ଣӻ୕V1.0)
The Company 2022SR1394869 PRC October 10, 2022
APPENDIX VI STATUTORY AND GENERAL INFORMATION
– VI-22 –


--- page 776 ---
No. Copyright
Registered
Owner Registration No.
Place of
Registration
Registration
Date
12. /H1118/H1118Muyuan Electronic
Procurement System
V1.0 (ཥɿમᒅӻ
୕V1.0)
The Company 2022SR1399254 PRC October 12, 2022
13. /H1118/H1118Muyuan Food Smart
Weighing System
V1.0 (౽ᅆཀ
ᆼӻ୕V1.0)
The Company 2022SR1399257 PRC October 12, 2022
14. /H1118/H1118Ton Barrel Medication –
Muyuan Cloud Smart
Farming System V1.0
(ኚ૗̋ᖹ-ථ౽ঐ
ቮಟӻ୕V1.0)
The Company 2023SR0369275 PRC March 20, 2023
15. /H1118/H1118Financial System V6.0.0
(ৌਕӻ୕V6.0.0)
Muyuan Meat
Co., Ltd. (ࡡى
ʮ
̡)
2024SR0766777 PRC June 5, 2024
Save as disclosed above, as of the Latest Practicable Date, there were no other trade or
service marks, patents, intellectual or industrial property rights which were material in relation
to our business.
3. FURTHER INFORMATION ABOUT OUR DIRECTORS AND SUBSTANTIAL
SHAREHOLDERS
A. Particulars of Directors’ Contracts and Appointment Letters
We have entered into a service contract or appointment letter with each of the Directors.
The principal particulars of these service contracts and appointment letters comprise (a) the
term of the service; (b) subject to termination in accordance with their respective term; and (c)
a dispute resolution provision. The service contracts and appointment letters may be renewed
in accordance with our Articles of Association and the applicable laws, rules and regulations
from time to time.
APPENDIX VI STATUTORY AND GENERAL INFORMATION
– VI-23 –


--- page 777 ---
B. Remuneration of Directors
The aggregate remuneration (including fees, salaries, contribution to pension schemes,
housing allowances, other allowances, benefits-in-kind and discretionary bonuses and share-
based compensation expenses) for our Directors for the years ended December 31, 2022, 2023
and 2024, and the nine months ended September 30, 2025 were RMB9.7 million, RMB5.8
million, RMB8.4 million, and RMB10.1 million respectively.
During the Track Record Period, no remuneration was paid by us to, or receivable by, our
Directors or the five highest paid individuals as an inducement to join or upon joining our
Company. No compensation was paid by us to, or receivable by, our Directors or the five
highest-paid individuals for each of the Track Record Period for the loss of any office in
connection with the management of the affairs of any members of our Group. Furthermore,
none of the Directors or former Directors had waived or agreed to waive any emoluments
during the same periods.
Save as disclosed above, no other payments have been made or are payable in respect of
the years ended December 31, 2022, 2023 and 2024 and the nine months ended September 30,
2025 by any member of our Group to any of our Directors or the five highest paid individuals.
C. Disclosure of Interests
(a) Interests in the Shares of our Company
For information on the persons (other than our Directors and chief executive of our
Company) who will, immediately following the completion of the Global Offering, have
interests or short positions in our Shares or underlying Shares which would be required to be
disclosed to us and the Stock Exchange under the provisions of Divisions 2 and 3 of Part XV
of the SFO, or, directly or indirectly, be interested in 10% or more of the nominal value of any
class of share capital carrying the rights to vote in all circumstances at general meetings of our
Company, see “Substantial Shareholders” in this prospectus.
(b) Disclosure of Interests of Directors and Chief Executive
Immediately following the completion of the Global Offering (assuming the Over-
allotment Option is not exercised), so far as our Directors are aware, the interest or short
position of our Directors or Chief Executives in the Shares, underlying shares and debentures
of our Company or its associated corporations (within the meaning of Part XV of the SFO)
which will be required to be notified to our Company and the Hong Kong Stock Exchange
pursuant to Divisions 7 and 8 of Part XV of the SFO (including interest or short positions
which they were taken or deemed to have under such provisions of the SFO) or which will be
required, pursuant to section 352 of the SFO, to be entered in the register referred to therein,
or which will be required, pursuant to the Model Code for Securities Transactions by Directors
of Listed Issuers as set out in Appendix C3 to the Listing Rules, to be notified to our Company
and the Hong Kong Stock Exchange, will be as follows:
APPENDIX VI STATUTORY AND GENERAL INFORMATION
– VI-24 –


--- page 778 ---
Interests in our Company
Name of
substantial
Shareholder Nature of interest
Description
of Shares
Number of
Shares directly
or indirectly
held (excluding
A Shares
issuable upon
the conversion
of the
outstanding
Convertible
Bonds)
Approximate
percentage of
interest in the
total issued
share capital of
our Company as
of the Latest
Practicable Date
(excluding A
Shares issuable
upon the
conversion of
the outstanding
Convertible
Bonds)
Approximate
percentage of
interest in the
total issued
share capital of
our Company
after the Global
Offering
(excluding A
Shares issuable
upon the
conversion of
the outstanding
Convertible
Bonds)
Number of
Shares held
immediately
after the Global
Offering
(assuming that
the Convertible
Bonds are fully
converted at the
price of
RMB44.26)
Approximate
percentage of
shareholding in
the total Shares
of our Company
immediately
after the Global
Offering
(assuming that
the Convertible
Notes are fully
converted at the
price of
RMB44.26)
Mr. Qin
Yinglin /H1118/H1118
Beneficial owner (1) A Shares 2,086,287,906 38.19% 36.37% 2,101,406,004 35.30%
Interest in controlled
corporation (2)(3)
A Shares 943,174,287 16.81% 16.01% 940,616,930 15.80%
Interest of spouse (2) A Shares 64,445,240 1.18% 1.12% 67,087,262 1.13%
Ms. Qian
Ying /H1118/H1118/H1118
Beneficial owner (4) A Shares 64,445,240 1.18% 1.12% 67,087,262 1.13%
Interest in controlled
corporation (2)(3)
A Shares 943,174,287 16.81% 16.01% 940,616,930 15.80%
Interest of spouse (2) A Shares 2,086,287,906 38.19% 36.37% 2,101,406,004 35.30%
Mr. Cao
Zhinian /H1118
Beneficial owner (5) A Shares 12,544,260 0.23% 0.22% 13,051,827 0.22%
Interest of spouse (6) A Shares 13,941,757 0.26% 0.24% 14,503,266 0.24%
Ms. Y ang
Ruihua /H1118/H1118
Beneficial owner (7) A Shares 13,941,757 0.26% 0.24% 14,503,266 0.24%
Interest of spouse (6) A Shares 12,544,260 0.23% 0.22% 13,051,827 0.22%
Mr. Su
Danglin /H1118
Beneficial owner A Shares 7,597,912 0.14% 0.13% 7,597,912 0.13%
Interest of spouse (8) A Shares 1,348,119 0.02% 0.02% 1,348,119 0.02%
Mr. Y an
Lei /H1118/H1118/H1118/H1118
Beneficial owner A Shares 11,900 0.0002% 0.0002% 11,900 0.0002%
Notes:
(1) Mr. Qin Yinglin has subscribed for Convertible Bonds with an outstanding principal amount of
RMB669,127,000. In the event of full conversion of Convertible Bonds, Mr. Qin Yinglin shall hold an
aggregate of 2,101,406,004 A Shares, assuming a conversion price of RMB44.26.
(2) As of the Latest Practicable Date, Muyuan Group was held by Mr. Qin Yinglin as to 85% and by Ms. Qian Ying
as to 15%. Mr. Qin Yinglin and Ms. Qian Ying are spouses. As such, Mr. Qin Yinglin will be deemed to be
interested in the A Shares held by Muyuan Group and each of Mr. Qin Yinglin and Ms. Qian Ying is deemed
to be interested in the interest of each other for purpose of Part XV of the SFO.
(3) Interest in controlled corporation also includes 848,762,153 A Shares held by Muyuan Group and the
69,586,523 A Shares repurchased by our Company as treasury shares as of the Latest Practicable Date. Muyuan
Group has subscribed for Convertible Bonds with an outstanding principal amount of RMB985,592,900. In the
event of full conversion of Convertible Bonds, Muyuan Group shall hold an aggregate of 871,030,407 A
Shares, assuming a conversion price of RMB44.26. As of the Latest Practicable Date, 172,678,000 A Shares,
representing 3.16% of the total issued Shares of the Company, held by Muyuan Group was pledged to several
financial institutions.
APPENDIX VI STATUTORY AND GENERAL INFORMATION
– VI-25 –


--- page 779 ---
(4) As of the Latest Practicable Date, Ms. Qian Ying has subscribed for Convertible Bonds with an outstanding
principal amount of RMB116,935,900. In the event of full conversion of Convertible Bonds, Ms. Qian Ying
shall hold an aggregate of 67,087,262 A Shares, assuming a conversion price of RMB44.26.
(5) As of the Latest Practicable Date, Mr. Cao Zhiniann has subscribed for Convertible Bonds with an outstanding
principal amount of RMB22,464,900. In the event of full conversion of Convertible Bonds, Mr. Cao Zhinin
shall hold an aggregate of 13,051,827 A Shares, assuming a conversion price of RMB44.26.
(6) As of the Latest Practicable Date, Mr. Cao Zhinian and Ms. Y ang Ruihua are spouses. As such, Mr. Cao Zhinian
and Ms. Y ang Ruihua are deemed to be interested in the interest of each other for purpose of Part XV of the
SFO.
(7) As of the Latest Practicable Date, Ms. Y ang Ruihua has subscribed for Convertible Bonds with an outstanding
the principal amount of RMB24,852,400. In the event of full conversion of Convertible Bonds, Ms. Y ang
Ruihua shall hold an aggregate of 14,503,266 A Shares, assuming a conversion price of RMB44.26.
(8) As of the Latest Practicable Date, The wife of Mr. Su Danglin held 1,348,119 A Shares of the Company. As
such, Mr. Su Danglin will be deemed to be interested in the A Shares held by his wife for purpose of Part XV
of the SFO.
D. Disclaimers
Save as disclosed herein:
(a) none of our Directors or the chief executive of our Company has any interest or short
position in the shares, underlying shares or debentures of our Company or any of its
associated corporation (within the meaning of the SFO) which will have to be
notified to our Company and the Hong Kong Stock Exchange pursuant to Divisions
7 and 8 of Part XV of the SFO or which will be required, pursuant to section 352
of the SFO, to be entered in the register referred to therein, or which will be required
to be notified to our Company and the Hong Kong Stock Exchange pursuant to the
Model Code for Securities Transactions by Directors of Listed Issuers once the H
Shares are listed;
(b) none of our Directors or any of the experts referred to under the paragraph headed
“— 5. Other Information — G. Qualification of Experts” in this appendix has any
direct or indirect interest in the promotion of our Company, or in any assets which
have within the two years immediately preceding the date of this prospectus been
acquired or disposed of by or leased to any member of our Group, or are proposed
to be acquired or disposed of by or leased to any member of our Group;
(c) none of our Directors is materially interested in any contract or arrangement
subsisting at the date of this prospectus which is significant in relation to the
business of our Group taken as a whole;
(d) none of our Directors has any existing or proposed service contracts with any
member of our Group (excluding contracts expiring or determinable by the employer
within one year without payment of compensation (other than statutory
compensation));
APPENDIX VI STATUTORY AND GENERAL INFORMATION
– VI-26 –


--- page 780 ---
(e) so far as is known to our Directors, no person (not being a Director or chief
executive of our Company or any member of our Group) will, immediately
following the completion of the Global Offering, have an interest or short position
in the Shares or underlying Shares of our Company which would fall to be disclosed
to our Company under the provisions of Divisions 2 and 3 of Part XV of SFO or be
interested, directly or indirectly, in 10% or more of the nominal value of any class
of share capital carrying rights to vote in all circumstances at general meetings of
any member of our Group; and
(f) none of our Directors or their respective close associates (as defined under the
Listing Rules) or our Shareholders who are interested in more than 5% of the issued
share capital of our Company has any interest in the five largest customers or the
five largest suppliers of our Group.
4. OUR INCENTIVE PLAN
The following is a summary of the principal terms of our incentive plans which was
outstanding as of the Latest Practicable Date, including the second employee stock ownership
plan (the “ Second Employee Stock Ownership Plan ”), the 2025 management stock ownership
plan (the “ Management Stock Ownership Plan ”), the 2025 strivers stock ownership plan (the
“Strivers Stock Ownership Plan ”), and the 2025 key employee stock ownership plan (the
“Key Employee Stock Ownership Plan ”). Given no further shares will be granted under these
incentive plans after the Listing, the terms of the Second Employee Stock Ownership Plan, the
Management Stock Ownership Plan, the Strivers Stock Ownership Plan and the Key Employee
Stock Ownership Plan are not subject to the provisions of Chapter 17 of the Listing Rules.
A. Second Employee Stock Ownership Plan
(i) Purpose and administration
The purpose of the Second Employee Stock Ownership Plan is to further improve the
corporate governance structure of the Company, enhance employee cohesion and company
competitiveness, and promote the long-term, sustainable, and healthy development of the
Company.
The holders’ meeting is the highest authority of the Second Employee Stock Ownership
Plan and consists of all participants of the plan. All participants have the right to attend the
holders’ meeting and exercise their voting rights according to their shares in the plan. The
holders’ meeting of the First Employee Stock Ownership Plan elects a management committee
to represent the plan in exercising shareholder rights. The holders’ meeting authorized the
management committee to be responsible for specific management matters including
exercising shareholder rights.
APPENDIX VI STATUTORY AND GENERAL INFORMATION
– VI-27 –


--- page 781 ---
(ii) Participants and Shares Involved
Totally 432 participants participated in the Second Employee Stock Ownership Plan and
were the Company’s employees. Participants who meet the above conditions participated in
this employee stock ownership plan on a voluntary basis, in accordance with legal compliance,
bearing their own risks, and raising their own funds. Certain participants of the Second
Employee Stock Ownership Plan withdrew from the plan for personal reasons. Their shares
were transferred to the transferees designated by the management committee pursuant to the
plan. The transferees were all Independent Third Parties. As of the latest Practicable date, the
outstanding participants of the Second Employee Stock Ownership Plan consisted of 4
employees holding 56,443,800 A Shares, representing 1.03% of the total issued share capital
of the Company, among whom, Ms. Wang Chunyan, Mr. Wang Zhiyuan and Ms. Niu Min, who
as of the Latest Practicable Date were senior management of the Company, each held 27,849
Shares, representing 0.001% of the total issued share capital of the Company.
The source of Shares for the Second Employee Stock Ownership Plan was 40,535,062 A
Shares non-publicly offered at the price of RMB24.67 per Share by the Company in April 2017,
representing 3.50% of the Company’s then total issued share capital. See “History,
Development and Corporate Structure — Major Shareholding Changes Of Our Company —
Other Major Shareholding Changes — Non-public Offerings of A Shares.” The total number of
Shares corresponding to the equity obtained by a single employee was no more than 1% of the
Company’s total share capital.
(iii) Lock-up Period and Duration of the plan
The lock-up period for the Shares obtained under, and the duration of, the Second
Employee Stock Ownership Plan was 36 months and 10 years, respectively, starting from the
registration date of the Shares under the plan. The lock-up period has expired on April 24, 2020
and the expiry date of the Second Employee Stock Ownership Plan will be April 23, 2027. If
all the Shares held under this plan are sold on the A Share market before the expiry date, the
plan will be terminated in advance. The management committee of the Second Employee Stock
Ownership Plan may decide to extend the duration of the Second Employee Stock Ownership
Plan three months before the expiry date depending on market conditions.
B. Management Stock Ownership Plan
(i) Purpose and administration
As approves by the Board and the shareholders meeting on August 22, 2025 and
September 8, 2025, respectively, the Company established the Management Stock Ownership
Plan. The purpose of this plan is to inspire key management members’ motivation and
creativity, strengthen governance, and attract, retain, and incentivize core talent essential to the
Company’s future. It aims to foster a sense of mission and responsibility, optimize total
APPENDIX VI STATUTORY AND GENERAL INFORMATION
– VI-28 –


--- page 782 ---
compensation, and establish a shared-interest mechanism between employees and shareholders.
By deepening long-term incentives and uniting leaders with common values, the plan supports
sustainable growth and aligns all shareholders’ interests.
The holders’ meeting is the highest authority of the Management Stock Ownership Plan.
The holders’ meeting elects the management committee, which, under its authorization, is
responsible for opening related accounts, overseeing daily operations of the plan, and
exercising shareholder rights on behalf of the plan.
(ii) Participants and Shares Involved
Totally 217 participants participated in the Management Stock Ownership Plan and were
the Company’s directors, senior management and core management personnel who play a
critical role in the company’s overall performance and long-term development. Participants
who meet the above conditions participated in this employee stock ownership plan on a
voluntary basis, in compliance with laws and regulations, with a commitment to long-term
service, under principles of shared benefits and bearing their own risks. Certain participant of
the Management Stock Ownership Plan withdrew from the plan for personal reasons and
accordingly the shares were disposed of by the management committee pursuant to the plan.
As of the latest Practicable date, the outstanding participants of the Management Stock
Ownership Plan consisted of 216 employees holding 9,613,031 A Shares, representing 0.18%
of the total issued share capital of the Company. The participants who are Director or senior
management of the Company as well as the shares granted to them under the Management
Stock Ownership Plan are listed below.
Name Shares Granted
Ownership % to the
total issued shares of
the Company as
of the Latest
Practicable Date
Cao Zhinian /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118175,939 0.003%
Y ang Ruihua /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118249,230 0.005%
Chu Ke /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118169,548 0.003%
Qin Jun /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111886,472 0.002%
Wang Chunyan /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118265,805 0.005%
Li Y anpeng /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118215,080 0.004%
Niu Min /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118212,684 0.004%
Xu Shaotao /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118149,977 0.003%
Y uan Hebin /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118177,936 0.003%
Wang Zhiyuan /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H111895,858 0.002%
Gao Tong /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118358,267 0.007%
The source of Shares for the Management Stock Ownership Plan was A Shares
repurchased by the Company on the A Share market.
APPENDIX VI STATUTORY AND GENERAL INFORMATION
– VI-29 –


--- page 783 ---
(iii) Lock-up Period and Duration of the plan
Starting from the announcement of the last share transfer, i.e. September 23, 2025, shares
granted under the Management Stock Ownership Plan will be subject to lock-up periods of 12
months, 24 months, and 36 months, with unlocking ratios of 40%, 30%, and 30%, respectively.
Actual unlocking will depend on performance assessments.
The plan will remain in effect for ten years, starting also from September 23, 2025. It will
terminate upon expiry unless ended earlier in accordance with laws, regulations, or plan
provisions, or extended with approval from holders representing more than 50% of the units
and the Board. One month before expiry, if the shares granted under the plan have not been
fully sold or transferred to individual accounts, the term may be extended with approval from
the holders’ meeting and the Board.
C. Strivers Stock Ownership Plan
(i) Purpose and administration
As approves by the Board and the shareholders meeting on August 22, 2025 and
September 8, 2025, respectively, the Company established the Strivers Stock Ownership Plan.
The purpose of this plan is to unleash the motivation and creativity of core operational and
management leaders, strengthen corporate governance, and attract, retain, and incentivize key
talent critical to the Company’s future. It seeks to foster a sense of mission and responsibility,
improve the overall compensation structure, and establish a mechanism for shared interests
between employees and shareholders. By deepening long-term incentives and uniting
individuals with common values, the plan promotes sustainable growth and aligns the interests
of all shareholders.
The holders’ meeting is the highest authority of the Strivers Stock Ownership Plan. The
holders’ meeting elects the management committee, which, under its authorization, is
responsible for opening related accounts, overseeing daily operations of the plan, and
exercising shareholder rights on behalf of the plan.
(ii) Participants and Shares Involved
Totally 3,579 participants participated in the Strivers Stock Ownership Plan and were
core operational and management personnel who play a critical role in the Company’s overall
performance and long-term development. Current directors, supervisors, and senior executives
will not participate in this plan. Shareholders who individually or collectively hold 5% or more
of the company’s shares, actual controllers, and their spouses, parents, or children are also
excluded. Participants who meet the above conditions participated in this employee stock
ownership plan on a voluntary basis, in compliance with laws and regulations, with a
commitment to long-term service, under principles of shared benefits and bearing their own
risks. Certain participants of the Strivers Stock Ownership Plan withdrew from the plan for
personal reasons and accordingly the shares were disposed of by the management committee
APPENDIX VI STATUTORY AND GENERAL INFORMATION
– VI-30 –


--- page 784 ---
pursuant to the plan. As of the Latest Practicable Date, the outstanding participants of the
Strivers Stock Ownership Plan consisted of 3,473 employees holding 23,498,520 A Shares,
representing 0.43% of the total issued share capital of the Company. No Director or senior
management of the Company was granted shares under this plan.
The source of Shares for the Strivers Stock Ownership Plan was A Shares repurchased by
the Company on the A Share market.
(iii) Lock-up Period and Duration of the plan
Starting from the announcement of the last share transfer, i.e. September 25, 2025, shares
granted under the Strivers Stock Ownership Plan will be subject to lock-up periods of 12
months, 24 months, and 36 months, with unlocking ratios of 40%, 30%, and 30%, respectively.
Actual unlocking will depend on performance assessments.
The plan will remain in effect for ten years, starting also from September 25, 2025. It will
terminate upon expiry unless ended earlier in accordance with laws, regulations, or plan
provisions, or extended with approval from holders representing more than 50% of the units
and the Board. One month before expiry, if the shares granted under the plan have not been
fully sold or transferred to individual accounts, the term may be extended with approval from
the holders’ meeting and the Board.
D. Key Employee Stock Ownership Plan
(i) Purpose and administration
As approves by the Board and the shareholders meeting on August 22, 2025 and
September 8, 2025, respectively, the Company established the Key Employee Stock Ownership
Plan. The purpose of this plan is to further unleash the motivation and creativity of core
employees, strengthen corporate governance, and attract, retain, and incentivize talent critical
to the company’s future development. It seeks to foster a sense of mission and responsibility,
improve the overall compensation structure, and establish a mechanism for shared interests
between employees and shareholders. By deepening long-term incentives and bringing together
employees with shared values, the plan promotes sustainable growth and aligns the interests of
all shareholders.
The holders’ meeting is the highest authority of the Key Employee Stock Ownership Plan.
The holders’ meeting elects the management committee, which, under its authorization, is
responsible for opening related accounts, overseeing daily operations of the plan, and
exercising shareholder rights on behalf of the plan.
APPENDIX VI STATUTORY AND GENERAL INFORMATION
– VI-31 –


--- page 785 ---
(ii) Participants and Shares Involved
Totally 1,079 participants participated in the Key Employee Stock Ownership Plan and
were core employees who played a critical role in the company’s overall performance and
long-term development. Current directors, supervisors, and senior executives will not
participate in this plan. Shareholders who individually or collectively hold 5% or more of the
company’s shares, actual controllers, and their spouses, parents, or children are also excluded.
Participants who meet the above conditions participated in this employee stock ownership plan
on a voluntary basis, in compliance with laws and regulations, with a commitment to long-term
service, under principles of shared benefits and bearing their own risks. Certain participant of
the Key Employee Stock Ownership Plan withdrew from the plan for personal reasons and
accordingly the shares were disposed of by the management committee pursuant to the plan.
As of the latest Practicable date, the outstanding participants of the Key Employee Stock
Ownership Plan consisted of 1,063 employees holding 8,758,540 A Shares, representing 0.16%
of the total issued share capital of the Company. No Director or senior management of the
Company was granted shares under this plan.
The source of Shares for the Key Employee Stock Ownership Plan was A Shares
repurchased by the Company on the A Share market.
(iii) Lock-up Period and Duration of the plan
Starting from the announcement of the last share transfer, i.e. September 24, 2025, shares
granted under the Key Employee Stock Ownership Plan will be subject to lock-up periods of
12 months and 24 months, with unlocking ratios of 50% and 50%, respectively. Actual
unlocking will depend on performance assessments.
The plan will remain in effect for ten years, starting also from September 24, 2025. It will
terminate upon expiry unless ended earlier in accordance with laws, regulations, or plan
provisions, or extended with approval from holders representing more than 50% of the units
and the Board. One month before expiry, if the shares granted under the plan have not been
fully sold or transferred to individual accounts, the term may be extended with approval from
the holders’ meeting and the Board.
5. OTHER INFORMATION
A. Estate Duty
We have been advised that no material liability for estate duty under PRC law is likely
to fall upon the Group.
APPENDIX VI STATUTORY AND GENERAL INFORMATION
– VI-32 –


--- page 786 ---
B. Litigation
During the Track Record Period and up to the Latest Practicable Date, so far as our
Directors are aware, no litigation or claim of material importance (to our Group’s financial
condition or results of operation) is pending or threatened against any member of our Group.
C. Joint Sponsors
The Joint Sponsors have made an application on our behalf to the Listing Committee of
the Hong Kong Stock Exchange for the listing of, and permission to deal in, the H Shares to
be issued as mentioned in this prospectus. All necessary arrangements have been made
enabling the H Shares to be admitted into CCASS.
Each of the Joint Sponsors satisfies the independence criteria applicable to sponsors as set
out in Rule 3A.07 of the Listing Rules. The sponsor fee payable to the Joint Sponsors in
connection with the Listing payable by our Company is US$1.05 million in aggregate.
D. Compliance Adviser
Our Company has appointed Somerley Capital Limited as our compliance adviser in
compliance with Rules 3A.19 of the Listing Rules.
E. Preliminary Expenses
We have not incurred any material preliminary expense.
F. Promoters
Information of our promoters as of the time of our Company’s conversion into a joint
stock company incorporated in PRC with limited liability on December 28, 2009 is as follows:
No. Promoter
1 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Qin Yinglin (؍ߵ)
2 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Muyuan Group
3 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Qian Ying ( ፺຃)
4 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Qian Y unpeng ( ፺༶ᘄ)
5 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Y ang Ruihua ( เ๿ശ)
6 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Cao Zhinian (ϋ)
7 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Su Danglin (؍)
8 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Li Fuqiang ( ҽ˹੶)
9 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Zhang Chunwu (؛݆)
10 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Chu Ke (ݚ)
11 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Qin Yingfan (ɭ)
APPENDIX VI STATUTORY AND GENERAL INFORMATION
– VI-33 –


--- page 787 ---
No. Promoter
12 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Qin Yingze (ዣ)
13 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Zhang Xinya ( ੵอԭ)
14 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Tian Fangping ( ͞˙̻)
15 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Zhang Mingbo (ت׼)
16 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Xue Y uzhen (ࣈ)
17 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Qian Xiaopeng ( ፺ʃᘄ)
18 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Y ang Junwu (؛ڲ)
19 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Zhang Jianqun (໊)
20 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Xue Xing (݋)
21 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Xu Y umei (͗ૠ)
22 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Hu Xu (ϛ)
23 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Liu Y ajing ( ᄎԭ᎑)
24 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Zhang Daxing (݋)
25 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Guo Baojun (ࠏڭ)
26 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Chen Y ulai ( ௓͗Ը)
27 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Qin Yinghui (ึ)
28 /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Qin Yinghe (ஃ)
Save as disclosed in this prospectus, within the two years immediately preceding the date
of this prospectus, no cash, securities or other benefit have been paid, allotted or given or have
been proposed to be paid, allotted or given to the above promoters in connection with the
Global Offering or related transactions in this prospectus within the two years immediately
preceding the date of this prospectus.
G. Qualification of Experts
The qualifications of the experts, as defined under the Hong Kong Listing Rules, who
have given opinions in this prospectus, are as follows:
Name Qualifications
Morgan Stanley Asia Limited /H1118/H1118A licensed corporation under the SFO for Type 1
(dealing in securities), Type 4 (advising on
securities), Type 5 (advising on futures contracts),
Type 6 (advising on corporate finance) and Type 9
(asset management) regulated activities under the
SFO
CITIC Securities (Hong Kong)
Limited /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
A licensed corporation under the SFO to conduct
Type 4 (advising on securities) and Type 6 (advising
on corporate finance) regulated activities under the
SFO
APPENDIX VI STATUTORY AND GENERAL INFORMATION
– VI-34 –


--- page 788 ---
Name Qualifications
Goldman Sachs (Asia) L.L.C. /H1118/H1118A licensed corporation under the SFO for Type 1
(dealing in securities), Type 4 (advising on
securities), Type 5 (advising on futures contracts),
Type 6 (advising on corporate finance) and Type 9
(asset management) regulated activities under the
SFO
Fangda Partners /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Legal adviser to our Company as to PRC law
KPMG Huazhen LLP /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118Public Interest Entity Auditor recognized in
accordance with the Accounting and Financial
Reporting Council Ordinance
Frost & Sullivan (Beijing) Inc.,
Shanghai Branch Co. /H1118/H1118/H1118/H1118/H1118/H1118/H1118
Independent industry consultant
Jones Lang LaSalle Corporate
Appraisal and Advisory
Limited /H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118/H1118
Independent biological assets valuer
H. Consents of Experts
Each of the experts as referred to in “— 5. Other Information — G. Qualification of
Experts” in this Appendix has given and has not withdrawn its consent to the issue of this
prospectus with the inclusion of its view, report and/or letter and/or legal opinion (as the case
may be) and references to its name included herein in the form and context in which it
respectively appears.
None of the experts named above has any shareholding interest in any member of our
Group or the right (whether legally enforceable or not) to subscribe for or to nominate persons
to subscribe for securities in any member of our Group.
I. Binding Effect
This prospectus shall have the effect, if an application is made in pursuance hereof, of
rendering all persons concerned bound by all of the provisions (other than the penal provisions)
of sections 44A and 44B of the Companies (Winding Up and Miscellaneous Provisions)
Ordinance so far as applicable.
APPENDIX VI STATUTORY AND GENERAL INFORMATION
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J. No Material Change
Our Directors confirm that, up to the date of this prospectus, there has been no material
adverse change in our financial or trading position since September 30, 2025, being the end
date of the periods reported in Appendix I to this prospectus.
K. Taxation of Holders of H Shares
The sale, purchase and transfer of H Shares are subject to Hong Kong stamp duty if such
sale, purchase and transfer are affected on the H Share register of members of our Company,
including in circumstances where such transactions are effected on the Stock Exchange. The
current rate of Hong Kong stamp duty for such sale, purchase and transfer on each of the
purchaser and the seller is 0.1% of the consideration or, if higher, the fair value of the H Shares
being sold or transferred.
L. Restriction on Share Repurchases
For details of the restrictions on share repurchases by the Company, see “Appendix V .
Summary of the Articles of Association — Repurchase of Shares.”
M. Related Party Transactions
Our Group entered into the related party transactions within the two years immediately
preceding the date of this prospectus. See Note X to the Accountants’ Report in Appendix I to
this prospectus.
N. Miscellaneous
Save as disclosed in this prospectus:
(a) within the two years immediately preceding the date of this prospectus:
(i) no share or loan capital of our Company or any of our subsidiaries had been
issued or agreed to be issued or proposed to be fully or partly paid either for
cash or a consideration other than cash;
(ii) no commissions, discounts, brokerages or other special terms had been granted
or agreed to be granted in connection with the issue or sale of any share or loan
capital of our Company or any of our subsidiaries;
(iii) no commission had been paid or payable for subscription, agreeing to
subscribe, procuring subscription or agreeing to procure subscription of any
share in our Company or any of our subsidiaries;
APPENDIX VI STATUTORY AND GENERAL INFORMATION
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(b) no share or loan capital of our Company or any of our subsidiaries had been under
option or agreed conditionally or unconditionally to be put under option;
(c) there are no founder, management or deferred shares, convertible debt securities nor
any debentures in our Company or any of our subsidiaries;
(d) there has not been any interruption in the business of our Group which may have or
has had a significant effect on the financial position of our Group in the 12 months
preceding the date of this prospectus;
(e) our Company has no outstanding convertible debt securities or debentures;
(f) there is no arrangement under which future dividends are waived or agreed to be
waived;
(g) save for the A Shares of our Company that are listed on the Shenzhen Stock
Exchange, and save for the H Shares to be issued in connection with the Global
Offering, none of the equity and debt securities of our Company, if any, is listed or
dealt with in any other stock exchange nor is any listing or permission to deal being
or proposed to be sought; and
(h) all necessary arrangements have been made to enable the H Shares to be admitted
into CCASS for clearing and settlement.
O. Bilingual Prospectus
The English language and Chinese language versions of this prospectus are being
published separately in reliance on the exemption provided in section 4 of the Companies
(Exemption of Companies and Prospectuses from Compliance with Provisions) Notice
(Chapter 32L of the Laws of Hong Kong).
APPENDIX VI STATUTORY AND GENERAL INFORMATION
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DOCUMENTS DELIVERED TO THE REGISTRAR OF COMPANIES IN HONG KONG
The documents attached to a copy of this prospectus and delivered to the Registrar of
Companies in Hong Kong for registration were:
(i) a copy of each of the material contracts referred to in “Statutory and General
Information — 2. Further Information about our Business — A. Summary of
Material Contracts” in Appendix IV to this prospectus; and
(ii) the written consents referred to in “Statutory and General Information — 5. Other
Information — H. Consents of Experts” in Appendix IV to this prospectus.
DOCUMENTS A V AILABLE ON DISPLAY
Copies of the following documents will be published on the Stock Exchange’s website at
www.hkexnews.hk and www.muyuanfoods.com during a period of 14 days from the date of
this prospectus:
(a) the Articles of Association;
(b) the Accountants’ Report from KPMG Huazhen LLP , the text of which is set out in
Appendix I to this prospectus;
(c) the audited consolidated financial statements of our Group for the years ended
December 31, 2022, 2023 and 2024 and the nine months ended September 30, 2025;
(d) the report from KPMG Huazhen LLP on the unaudited pro forma financial
information of our Group, the text of which is set out in Appendix II to this
prospectus;
(e) the letters in respect of the profit estimate of our Group from KPMG Huazhen LLP ,
Morgan Stanley Asia Limited, CITIC Securities (Hong Kong) Limited, and Goldman
Sachs (Asia) L.L.C., the texts of which are set out in Appendix IIA to this
prospectus;
(f) the industry report issued by Frost & Sullivan referred to in “Industry Overview” in
this prospectus;
(g) the PRC legal opinion issued by Fangda Partners, our PRC Legal Adviser, in respect
of, among other things, certain general corporate matters and property interests
matters of our Group;
(h) the valuation report considering the fair values of biological assets belonging to our
Group prepared by JLL;
(i) the material contracts referred to in “Statutory and General Information — 2.
Further Information about our Business — A. Summary of Material Contracts” in
Appendix IV to this prospectus;
APPENDIX VII DOCUMENTS DELIVERED TO THE REGISTRAR OF
COMPANIES AND A V AILABLE ON DISPLAY
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(j) the written consents referred to in “Statutory and General Information — 5. Other
Information — H. Consents of Experts” in Appendix IV to this prospectus;
(k) the contracts and appointment letters referred to in the section headed “3. Further
Information About Our Directors and Substantial Shareholders” — A. Particulars of
Directors’ Contracts and Appointment Letters” in Appendix VI to this prospectus;
and
(l) the PRC Company Law, Securities Law, and the Trial Measures for the
Administration Related to the Overseas Securities Offering and Listing by Domestic
Companies, together with unofficial English translations thereof.
APPENDIX VII DOCUMENTS DELIVERED TO THE REGISTRAR OF
COMPANIES AND A V AILABLE ON DISPLAY
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牧原食品股份有限公司
MUYUAN FOODS CO., L TD.
MUYUAN FOODS CO., L TD.
