gameforearncrypto| Review on the Operation of Xianfeng Holdings '2023 Annual Board of Directors
Xianfeng Holdings (002141) 2023 annual board of directors management review is as follows:
I. the situation of the company's industry during the reporting period
During the reporting period, the company's main business is mainly veterinary vaccine business, veterinary vaccine business to the holding subsidiary Shiji Biology as the main operation, the main product is pig vaccine. The development of the company's veterinary vaccine business is closely related to the development trend of the downstream pig breeding industry. In 2023, the pig farming industry is in a situation of oversupply, pig prices have been weak for a long time, and even began to be completely lower than the breeding cost, resulting in persistent losses of pig enterprises and accelerated departure of small and medium-sized pig farmers. Public data show that by the end of the third quarter of 2023, the average asset-liability ratio of listed aquaculture companies was 62.28%. Among them, the capital chain and cash flow pressure of the three listed companies with an asset-liability ratio of more than 80% were tense as a whole, and some of them had entered the restructuring process. As an upstream supplier of aquaculture, the animal protection industry is facing fierce competition in which both quantity and price fall.
II. The main business of the company during the reporting period
The main business of the company during the reporting period was the veterinary vaccine business operated by Shiji Biology, a holding subsidiary. Shiji Biology's main products are pig vaccines. At present, it has 6 series of core pig vaccine products, including pig blue ear (Lan Fujia, Lan Ningjia, Lan Lijia), round (round Lijia), diarrhea (Lilijia), mycoplasma (Mycoplasma), pseudorabies (Weilijia) and Classical Swine Fever (Changjia). And five professional services, including non-plague antibody survey, on-site veterinary audit, veterinary epidemic diagnosis, vaccine quality assessment, personality prevention and control programs, whose products and services have a good reputation in the market.
In terms of R & D model, Shiji Biology has continuously improved the R & D platform that can meet different types of vaccine development, as well as extensive cooperation with well-known universities and research institutions at home and abroad to form an R & D system that combines independent research and joint research and development, mainly focusing on the research and development of pig vaccines, including inactivated vaccines, live vaccines, genetic engineering vaccines and multiple multivalent vaccines.
In terms of procurement mode, Shiji Biology has established a relatively perfect procurement and supply management system, under the premise of ensuring stable and reliable quality, flexibly using procurement strategies to reduce procurement costs according to the changes of internal and external environment, such as business and market, to help Shiji Biology achieve the goal of improving quality, reducing cost and increasing efficiency.
In terms of production mode, Shiji Biology mainly adopts the production mode with fixed production and quality as the core, fully implements the national veterinary drug GMP standards and quality standards of related products, implements GMP management system, biosafety management system and CNAS management system in the process of vaccine production and product testing, continuously optimizes the product process control system, and continuously strengthens the professional skill level and safety responsibility consciousness of production personnel. Effectively ensure the safety, effectiveness and stable quality of vaccine products.
In terms of sales model, according to the different sales objects and methods, the historical biological sales model is mainly divided into two types: group customer direct sales and channel distribution. According to the situation of aquaculture in each region, Historical Biology formulates flexible market policies, adopts provincial agent or strategic agent model for areas where large-scale customers are concentrated, and adopts regional agent model for areas where culture scale is scattered. At the same time, Shiji Biology pays attention to the technical service work and emphasizes that the customer's problems can be solved accurately through the resident work of the technical service manager.
During the reporting period, under the influence of the continuous downturn in the downstream pig breeding industry, the price competition in the veterinary vaccine industry intensified, the gross profit of historical biology decreased, and the income scale increased less than expected.
Third, the analysis of core competence
During the reporting period, there was no significant change in the core competitiveness of the company's veterinary vaccine business compared with the same period last year, as follows:
1. Research and development advantage
Shiji biology has advanced R & D facilities and R & D capabilities.
The Research and Development Center of Shiji Biology is currently a national academician (expert) workstation, a provincial technology center of Sichuan Enterprise Technology Center, a BSL-2 biosafety laboratory and a biological products research institute, which has passed the on-site inspection of the 2022 new edition of veterinary drug GCP.
Historical biology has a perfect research and development platform. There are germplasm bank platform, cell culture process research and development platform (cell microcarrier suspension culture, cell pure suspension culture and fixed bed culture), bacterial fermentation culture process platform (yeast fermentation culture, bacterial fermentation culture), purification process research platform (virus purification process research, genetic engineering protein purification process research), freeze-drying process research platform (live vaccine heat-resistant protective agent research, Inactivated vaccine lyophilized form research), monoclonal antibody detection reagent platform, experimental animal technology platform, genetic engineering research platform (baculovirus expression platform, yeast expression platform, E. coli expression, CHO cell expression, adenovirus vector expression) and so on.
Over the years, Historical Biology has obtained a large number of qualifications and honors, such as National High-tech Enterprises, CNAS and GCP Certification, Sichuan Enterprise Technology Center, postdoctoral Research Workstation (2006), Sichuan Special and New small and medium-sized Enterprises, and has obtained 1 Class I Veterinary Drug Certificate, 1 Class II and 5 Class III patents, and has 24 authorized patents, including 17 invention patents and 7 utility model patents. It involves many related fields, such as the development of new vaccine products, the application of new detection methods and so on.
two。 Production quality advantage
Shiji Biology currently has three production workshops, including one live vaccine production workshop and two inactivated vaccine production workshops, all of which have been modified according to the requirements of the new version of "Veterinary Drug GMP" and have successfully passed the comprehensive inspection and acceptance of the expert inspection team.GameforearncryptoThere are 8 vaccine antigen production lines, of which 6 are dynamic acceptance and 2 are static acceptance. The reformed workshop meets the requirements of the new version of Veterinary Drug GMP in the production of vaccine antigen and the preparation of live and inactivated vaccine, further ensures the safety, effectiveness and stable quality of the vaccine, and can provide customers with the best quality products and technical services.
3. Product and service advantage
Through independent research and development, cooperative research and development, and the introduction of product digestion, absorption and re-innovation, Shiji Bio has a full product line of pig vaccine products except foot-and-mouth disease vaccine. There are 29 product production documents (including 13 pig vaccines and 16 poultry vaccines), and continue to actively enrich and improve the variety of vaccine products and strengthen the market competitiveness of the products. The product quality and efficacy of historical biology as well as technical services can effectively protect animal health and effectively improve the production efficiency and efficiency of pig-raising enterprises.
4. Brand advantage
Shiji Biology is committed to shaping the brand positioning of "vaccine technology experts", casting strict quality vaccines with three extreme processes (ICF suspension culture process, ABE purification process, HR&IE dosage form process). Take 6 series of core vaccine products (pig blue ear, ring, diarrhea, mycoplasma, pseudorabies, classical swine fever and other vaccines) and 5 technical services (non-cholera antibody survey, resident veterinary audit, veterinary disease diagnosis, vaccine quality evaluation, personality prevention and control program) to protect the health of the pig industry. While shaping the enterprise brand, Shiji Biology strives to create a professional veterinary technical service brand "discerning Eye Laboratory", making use of the veterinary detection and diagnosis center owned by Historical Biology, complete bacterial germplasm resource bank, standardized veterinary audit system, vaccine quality evaluation technology platform, magnetic nano-chemiluminescence IVD platform and so on, to establish a leading veterinary technical service laboratory in the industry. Strive to become a trusted partner of agricultural and animal husbandry enterprises.
IV. Analysis of main business
1. Overview
During the reporting period, Shiji Biology, the company's main holding subsidiary, focused on the production, R & D, sales and technical services of pig vaccines. The high pig stock in the first half of 2023 supported the basic demand for animal protection products of pig farming enterprises, but affected by continuous deep losses and African swine fever, the production capacity of live pigs accelerated in the second half of 2023. The demand for animal protection products by pig farming enterprises decreased significantly, and animal protection enterprises, including historical biology, were facing strong operating pressure, and price war was inevitable, resulting in a decline in gross profit margin of historical biological products. The annual income is lower than expected. Due to the widespread financial pressure of customers, some of them can not be repaid on time, and the credit quality of customers has declined, so Shiji Bio has made a higher credit impairment loss in this year. Under the background of obvious adverse changes in the market conditions of the historical biology industry, the company assessed the goodwill generated from the acquisition of historical biological shares in 2021. According to the evaluation results, the company made provision for goodwill impairment during the reporting period.Gameforearncrypto, 2.5367 million yuan.
In order to enhance the ability of the company's main business to resist and balance risks, in the process of transformation, the company always adheres to the diversification strategy and is committed to seeking a multi-industry track for sustained and healthy development. However, in view of the difficulties and lessons in the exploration process of strategic transformation, the management of the company has a full understanding of the risks faced by the strategic transformation, and when it is found that the projects in the new energy-related industrial chain are facing greater uncertain risks during the reporting period, the management of the company timely adjusts the project operation strategy to reduce the company's loss as much as possible. During the reporting period, the company's projects in the new energy-related industrial chain did not meet the expected losses on the net profits of shareholders belonging to listed companies, which affected about 14.7999 million yuan.
In 2022, the company basically completed the adjustment of historical business and the clean-up and rectification of creditor's rights and debts, and recovered most of the long-term investment funds. in order to improve the efficiency of idle funds, the company actively carried out cash management under the premise of strict risk control during the reporting period. the income is about 20.4101 million yuan through prudent financial management, laying a solid foundation for the follow-up strategic development.
Because the net profit belonging to the shareholders of the listed company in 2023 is negative and the operating income after deduction is less than 100 million yuan, and the internal control audit report with negative opinions was issued in 2023, according to the relevant provisions of the current rules on Stock listing on the Shenzhen Stock Exchange, the Shenzhen Stock Exchange will implement "delisting risk warning" and "other risk warning" on the company's stock trading. The company will strive to take corresponding and effective measures, actively promote the implementation of rectification and reform measures, eliminate the impact of related matters as soon as possible, actively improve the company's operating conditions, enhance the company's sustainable operating capacity, and strive to revoke delisting risk warnings and other risk warnings. V. Prospect of the company's future development
In this section, the description and business plan of the future development plan and the measures to be taken to deal with the future risks have great uncertainty, and do not constitute the company's performance commitment and guarantee to investors. Investors are requested to maintain full risk awareness, rational decision-making and pay attention to investment risks.
(1) Future development strategy
In recent years, the company has been actively exploring the road of transformation and development, and is currently in the key stage of strategic transformation and breakthrough. After the company spun off the original traditional business in the previous year, the current main business veterinary vaccine business is facing strong market competition pressure, the company will continue to support the development and growth of veterinary vaccine business, in order to effectively enhance the company's sustainable operating capacity as the goal, make full use of existing capital reserves, actively open up new performance growth points, and expect to achieve the goal of diversified development, sound operation and risk diversification.
(2) Business plan for the next year
In 2024, the company will devote itself to the improvement of business performance and the improvement of internal control.
In order to cope with the pressure of market price competition, Shiji Biology will further reduce costs and increase efficiency in production, focus on key projects and reduce ineffective expenses in research and development, and make sales rolling plans in sales to avoid ineffective production. At the same time, Shiji Biology will further strengthen the development of group customers and small and medium-sized customers according to its own technical services and key product quality, and continue to promote brand marketing and sales promotion.
The company will further strengthen the scientific management of subsidiaries and organize the improvement of internal control. The company will comprehensively and deeply carry out self-inspection and rectification from the aspects of personnel management and internal control implementation, sort out the existing system, rectify and optimize the existing internal control defects, and solve the problems that have occurred in a timely manner. at the same time, strengthen the training and study of laws and regulations and various internal control systems, strengthen the awareness of norms, and ensure the effective implementation of various rules and regulations. Strengthen the daily supervision and inspection of the internal audit department on the establishment and implementation of the company's internal control system.
On the basis of ensuring standardized operation, the company will continue to integrate superior resources, actively develop the existing industrial operation, broaden the industrial development track, and seek a development plan to effectively improve the overall anti-risk ability.
(3) risks that may be faced
1. Delisting risk warning and other risk warnings
Because the net profit belonging to the shareholders of the listed company in 2023 is negative and the operating income after deduction is less than 100 million yuan, and the internal control audit report with negative opinions was issued in 2023, according to the relevant provisions of the current rules on Stock listing on the Shenzhen Stock Exchange, the Shenzhen Stock Exchange will implement "delisting risk warning" and "other risk warning" on the company's stock trading.
The company will strive to take corresponding and effective measures to actively promote the implementation of rectification and reform measures and eliminate the impact of related matters as soon as possible; at the same time, the company will actively improve its operating conditions and enhance its sustainable operating ability. strive to remove delisting risk warnings and other risk warnings.
two。 Market risk
The pig breeding industry downstream of the company's veterinary vaccine business is facing the cash flow pressure caused by the long-term downturn in pig prices and rising breeding costs, and some group customers are under greater financial pressure and even facing the risk of bankruptcy. At the same time, the competition in the domestic animal protection industry is becoming increasingly fierce. The company's veterinary vaccine business is facing higher market competition risks. The company will urge Shiji Bio to evaluate the financial strength and credit quality of customers in detail before developing customers, so as to minimize the risk of payback.
3. Goodwill impairment risk
Affected by the obvious adverse changes in the industry market competition, based on the results of impairment testing on Shiji Biotech's related goodwill, the company has made some goodwill impairment provisions during the reporting period. At the end of the reporting period, the company still had goodwill of 76,335,791.83 yuan. If Shiji Biotech's industry and its own operations continue to decline as a whole, it may bring further goodwill impairment risks to the company.
The company will further strengthen the scientific management of subsidiaries, improve operational management efficiency, focus on improving profitability, and pay attention to preventing operational risks.