Review of the Board Management of Rheinland Bio in 2020

The business review of the board of directors of Rheinland Bio (002 166) in the first half of 2020 is as follows:

I. Overview

(1) Operating data and financial indicators

In the first half of 2020, the company realized the total operating income within the scope of consolidated statements of 280,652,409.37 yuan, up 7.23% year-on-year, and realized the operating profit of 62,433,629.86 yuan, down 8.12% year-on-year; The net profit attributable to shareholders of listed companies was 53,840,422.69 yuan, down 8.93% compared with the same period of last year.

During the reporting period, the operating performance of the company's plant extraction business grew steadily, achieving an operating income of 245,226,5438+million yuan, accounting for 87.38% of the company's consolidated operating income, an increase of 65,438+08.66% compared with the same period of last year, and a net profit of 65,438+065,438+0.93% compared with the same period of last year. The growth trend of main business is good. As the BT project of the company is drawing to a close, the confirmed operating income is 33 190900 yuan, accounting for 1 1.83% of the company's consolidated operating income, which is 3 1.8 1% lower than the same period of last year, and the net profit is 27.33% lower than the same period of last year.

At the end of the reporting period, the total assets of the company were RMB 2,765,438+RMB 03,707,259.28, an increase of 4.39% compared with the beginning of the reporting period, and the owners' equity attributable to shareholders of listed companies was RMB 65,438+RMB 0,785,232,4265,438+RMB 0.43, an increase of 65 compared with the beginning of the reporting period.

(2) Analysis of operating conditions

In 2020, the COVID-19 epidemic broke out all over the world, which had a great impact on the social and economic development of the world. Since the outbreak, all employees of the company have actively taken epidemic prevention measures to ensure timely and safe resumption of work and production, effectively ensuring the stable development of the company's main business during the reporting period.

During the reporting period, the company closely focused on the long-term development strategy and annual business objectives formulated by the board of directors, made full use of the company's brand accumulation and technology accumulation in the plant extraction industry, continued to actively expand large-scale single product business, and focused on promoting the innovative development of natural sugar-free sweetener business and the project construction and market layout of industrial cannabis business.

1. Development of natural sugar-free sweetener business

Adhering to the business philosophy of "green technology and healthy future", the company is committed to providing customers with the best products and solutions in the fields of food and beverage, nutritional supplements, food additives and animal feed with natural plants as raw materials. At present, the company has mastered hundreds of core technologies for extracting natural ingredients. In recent 10 years, the company has unswervingly developed the natural sugar-free sweetener business represented by Siraitia grosvenorii extract and Stevia rebaudiana extract, concentrated its superior resources and energy on the natural sugar-free sweetener market, actively laid out the development of the industrial chain, and established the operation ability of the whole industrial chain from seedling cultivation to end consumer goods application.

During the reporting period, the operating income of the company's natural sweeteners related products reached 65.438+0.57 billion yuan, accounting for 64.32% of the company's operating income of plant extraction business.

In 20 18, the company signed a natural sweetener purchase contract with Fenmeiyi with a cumulative target income of 400 million US dollars, which laid a solid foundation for the rapid development of the natural sweetener business of the company in the next few years. At present, through the cooperation with Fenmeiyi, the company has successfully established cooperative relations with global food and beverage brands such as Danone, Nestle and Pepsi.

During the reporting period, we are glad to see that the application of sugar-free sweeteners in the domestic consumer goods market has set off an upsurge, especially the emergence of a number of emerging national brands represented by Yuan Qi Forest, which favor zero-calorie, zero-sugar and zero-fat sweetener raw materials, and their products have also been loved by a large number of young consumers. The financial data of the company in the first half of the year showed that the revenue of plant extraction business sold in China increased by 55.72% compared with the same period of last year, and the company's ability to cooperate with famous foreign consumer brands for a long time was gradually recognized by more domestic brands. In the future, the company will continue to explore the domestic market and strive to provide more high-end and high-quality natural sweetener products for domestic consumers.

In order to further enhance the competitiveness of the natural sweetener business, the company planned a non-public offering of shares in 2020 in August this year, and the funds raised were mainly used for the construction of stevia rebaudiana professional extraction plant and the replenishment of working capital. Based on the confidence in the development prospect of the natural sweetener market, Mr. Qin Benjun, the controlling shareholder of the company, plans to invest 920 million yuan to subscribe for the non-public offering of shares in full. After the completion of this non-public offering, it will help the company to seize the development opportunity of the natural sweetener market, enhance its business scale and market share, and continue to provide quality products and services to customers at home and abroad.

2. Continue to promote the capacity building of industrial cannabis business.

In 20 19, the company gave full play to its technological research and development advantages in the plant extraction industry, seized the development opportunity, and launched the industrial hemp extraction business in Indiana, USA, investing about 400 million yuan to build the "Industrial Hemp Extraction and Application Engineering Construction Project". This project is an important business layout of the company's strategic development direction and an important extension of the development strategy of "big single product". The completion and commissioning of the project will increase the company's new profit growth point, improve the company's profitability and core competitiveness, and create more value for shareholders.

(1) Industrial hemp project development

At present, the civil construction of the industrial hemp extraction plant has been capped, and the construction progress is in line with expectations. At present, the factory is listed as a demonstration project in the field of industrial hemp extraction in the United States by the Indiana government. The overall design, construction, equipment and safety requirements of the factory are formulated with reference to the highest standards in the industry, which will increase the initial construction investment of the company and lay a good foundation for the subsequent safe and standardized operation of the factory. Since 2020, affected by Sino-US trade relations and COVID-19 epidemic, Hemprise, a subsidiary company, has faced some unfavorable factors such as higher tariffs, higher installation cost and longer installation period in terms of import restrictions on equipment and personnel from China. Based on the progress of the project construction and the current business environment, during the reporting period, the company actively communicated with partners such as design and construction companies and equipment manufacturers, and adopted measures such as building three-dimensional drawings, specifying equipment parameters in detail, and positioning the drawings at fixed points, so as to refine the installation arrangement in advance, effectively reducing the risk of subsequent installation cost increase and construction delay. Not only that, during the reporting period, the company also actively promoted the promotion of soft power such as PCT patent application and FDA-GRAS certification, and achieved certain results. Especially in promoting the industrial hemp extract to pass the FDA GRAS certification, with the help of the company's previous experience in GRAS certification of Siraitia grosvenorii and Stevia rebaudiana, the company has established and upgraded the industrial standard of industrial hemp extract through close cooperation with international third-party laboratories, which has laid a solid foundation for the sustainable development of the company's business and will certainly be conducive to the company's rapid market expansion of industrial hemp business in the future.

(2) Industrial hemp extract has a wide range of uses and a broad market prospect.

From the international market, in the field of plant extraction, the downstream application space of industrial hemp is broad, including medicine, food and beverage, health care products, tobacco and other fields. At present, there are many brands that have been used or publicly announced in this field, including Coca-Cola, Pepsi-Cola, Marlboro, Corona, Red Bull, Nestle and other famous consumer brands. With the continuous progress of extraction technology and the further demonstration of product benefits by the scientific community, the demand for industrial hemp extract will continue to expand. According to the relevant report of GrandViewResearch, the global CBD market scale in 20 18 was USD 4.6 billion, and it is expected to reach USD 9.3 billion in 2020.

With the gradual improvement of policy relaxation, the application market of drugs, health care products and even consumer goods will be opened, and the market space of industrial cannabis extract will be broader and broader. According to the relevant research report of TF Securities (60 1 162), the United Nations Commission on Narcotic Drugs held its first closed meeting in June 2020 to discuss the proposal to delete CBD preparations from international anti-drug conventions. It is expected that CBD will be widely used in end consumer goods by the end of 2020. From a regional perspective, the United States is currently the largest market for the application of industrial hemp extracts. It is predicted that by 2024, the overall market size of American CBD will exceed 20 billion US dollars. The company's new industrial hemp extraction project in the United States conforms to the development trend of the global industrial hemp industry and is expected to usher in huge development opportunities.

3. Further clarify the strategic position of the terminal consumer goods business.

Judging from the development trend of international health industry and relevant national policies, domestic end consumer goods such as health care products, cosmetics, functional foods, beverages, special medical foods and other industries will usher in huge development opportunities, and their demand for natural plant extracts will be further enhanced, and the plant extraction industry will surely become the "bridgehead" for the healthy development of the end consumer goods industry. Enterprises in the plant extraction industry can establish an efficient and reliable link system between natural plants and consumers to ensure that consumers can enjoy more natural, healthy and safe products. Therefore, based on the superior industrial chain resources that the company already has in the plant extraction industry, during the reporting period, the company decided to further increase investment in the field of end consumer goods, and clearly listed it as one of the core strategic directions for the company's future development.

In order to ensure the implementation of the above strategy, the company will sort out the existing subsidiaries of the end consumer goods business, and further increase the capital investment, talent introduction policy, management incentive system, investment and financing strategy in the end consumer goods market, attract a group of teams with innovative spirit and brand building ability with a more open mind and entrepreneurial mind, and contribute healthier, greener and safer products to consumers.

4. Continuously increase investment in R&D and enhance the ability of sustainable development.

5. Actively promote the review, transfer and payment of BT projects, and support the development of the company's main business.

During the reporting period, BT project construction entered the final stage, with an accumulated output value of about 65.438+0.94 billion yuan and an accumulated repurchase amount of 65.438+0.48 billion yuan.

The company closely follows the later work of the project, actively maintains efficient communication with the owner in terms of audit, handover and collection, promotes the early recovery of the project repurchase money, and supports the development of the company's plant extraction business.

Ii. risks faced by the company and countermeasures 1. Macro-economic risks The current Sino-US economic and trade friction has brought great uncertainty to the industry and economic operation. If the situation further expands, the global market will inevitably be affected by this systemic risk, and uncertain political factors may affect the global economic development process. Countermeasures: on the one hand, through technical improvement, reduce product cost, improve product quality and enhance product competitiveness. On the other hand, strengthen close cooperation with major customers, actively adjust the sales structure, and expand the market share in Europe, Asia-Pacific and other regions. To reduce the impact of macroeconomic fluctuations on company performance. 2. Risk of business model change Rheinland Investment, a wholly-owned subsidiary of the Company, is engaged in the operation management, construction services, investment and financing of flood control and drainage and Hutang water system projects in Lingui New District of Guilin City, and enjoys operating income. The business model is BT. In 2020, the construction of BT project is coming to an end, the output value of the project is decreasing year by year, the revenue recognized in the same period is greatly reduced, and the net profit is greatly reduced, which has a great impact on the operating performance during the reporting period. After the completion of the BT project, if the plant extraction business of the company fails to reach the performance target as scheduled, there is a risk of a sharp decline in the company's performance. Countermeasures: The company actively develops the plant extraction market, and on the basis of stabilizing existing customers, it uses the capacity scale and quality control system of the new factory to increase the development of strategic customers. The company further increased its strategic investment in R&D and sales, developed new "big single products", and continued to strengthen the docking cooperation with Fenmeiyi to ensure the effective performance of major contracts and the sustained and rapid growth of plant extraction business income. 3. Management Risk With the expansion of the company's scale and the expansion of its subsidiaries' business, the demand for management talents, marketing talents and professional and technical talents of the company and its subsidiaries has greatly increased, and the rapid expansion of the scale has aggravated the company's management tasks. If we don't adjust the management mode and improve the management level in time according to the changes of the external environment, it will bring certain risks to the future business development of the company. Countermeasures: The company will balance the two talent mechanisms of "internal training and external introduction", coordinate the development and utilization of talent resources in domestic colleges and universities, and strive to accelerate the cultivation of high-potential talents. Adhere to the combination of independent training and development of talents with the introduction of talents, strengthen the talent training mode with the cultivation of values as the core, supplemented by professional skills, management skills and compound talents, clarify standards, precise training and long-term counseling, simultaneously promote the implementation of talent development from the three levels of resources, operation and system, optimize the strategic layout of talents, and strengthen talent reserves. The company strives to create a fair competitive environment for employees, implements a competitive recruitment system for key management positions, and gives every employee a fair and open promotion opportunity. Through the application of performance management tools, the company's business objectives are decomposed into employees' job evaluation step by step, so as to give full play to employees' subjective initiative, improve work efficiency, and realize that employees with excellent performance are given priority in salary increase, rank promotion and position promotion. At the same time, the combination of material rewards and spiritual rewards and the combination of rewards and punishments will be implemented to reward those who have made outstanding contributions; Heavy penalties will be imposed on those who cause huge losses. The company comprehensively uses various incentive measures to stimulate the enthusiasm and creativity of all employees and enhance the cohesion within the company. 4. Financial Risk With the continuous expansion of the company's production scale and overseas markets, the company's export business will continue to increase in the future. As the company's import and export business will generate certain foreign exchange receipts and payments, the national foreign exchange policy will change, or the RMB exchange rate level will fluctuate greatly, which will have a certain impact on the company's performance. At the same time, affected by industry factors, the company's accounts receivable and inventory balance increased year by year with the growth of the company's main business. Although the overall risk is limited, the company has also made provision for bad debts according to the principle of prudence, but it still brings some pressure to the company's working capital. Countermeasures: For the trend of exchange rate market, the company will enhance the bargaining power by increasing the added value of products, strive for greater profit space, avoid the impact of RMB exchange rate fluctuation on the company's export sales, and avoid foreign exchange risks through forward settlement and sale of foreign exchange and foreign exchange treasure. In financial management, the company attaches great importance to the expected risks of accounts receivable and inventory impairment, strengthens internal control and risk prevention mechanisms, and minimizes financial risks and financial losses. 5. Risk of deterioration of business environment caused by the aggravation of COVID-19 epidemic. The COVID-19 epidemic in China has not completely ended, and the epidemic situation in other countries in the world is getting worse. On March 1 1, the World Health Organization declared that the COVID-19 epidemic had the characteristics of a global epidemic, and the form was worrying. Nearly 70% of the company's revenue comes from foreign regions. If the foreign epidemic situation is not effectively contained, it will bring certain uncertainty to the company's annual operation. Countermeasures: The company will actively respond to the epidemic situation, actively implement the epidemic prevention and control work, strengthen communication with customers and suppliers, establish a community of destiny, work together to overcome the difficulties, strive to grasp the market opportunities brought by the impact of the epidemic situation, and minimize the adverse impact of the epidemic situation on the company's business development. At the same time, with the outbreak of the epidemic, the global market demand for products related to enhancing immunity has risen sharply, bringing some incremental opportunities to the company's business.

Three. As a leading enterprise in the domestic plant extraction industry, the core competitiveness analysis company has accumulated rich experience and advantages in technology research and development, equipment, technology and management system. The company actively innovates, grasps market opportunities and digs deep into market potential. The brand awareness and customer recognition in the plant extraction industry have been gradually improved, and the company's core competitiveness has been continuously enhanced. 1, R&D and technical advantages After years of R&D investment and technical accumulation, the company has accumulated rich experience and technology in R&D and plant extraction industries. Relying on the R&D platform of high-tech enterprises, the company was approved to build a number of R&D platforms, such as postdoctoral research center, national tropical fruit processing technology R&D sub-center, Guangxi natural sweetener engineering technology research center, Guangxi Siraitia grosvenorii Industrial Engineering Institute, and Guangxi academician workstation. The technology center was recognized as the technological center of Guangxi autonomous region-level enterprises. The company has set up a plant science innovation center led by a returned doctor from the University of Nottingham, UK, dedicated to the research and development and cultivation of high-quality and high-yield Siraitia grosvenorii and Stevia rebaudiana seedlings. At the same time, the company set up a health product research and development center in Shanghai to carry out research and development on the application of plant extracts in the formulation of end consumer goods, providing overall solutions for product innovation and formulation development of the company's customers, and also providing strong technical support for the development of the company's end consumer goods business. The company attaches great importance to strengthening technical cooperation with well-known domestic universities and scientific research institutions, and relies on its technical and talent advantages to accelerate the research and development process of the company's products and processes or establish technical reserves and accumulation. At present, the company has established long-term cooperative relations with many universities and research institutes, such as Tianjin Bio-industry Research Institute, Shanghai Institute of Medicine, Guangxi Institute of Botany, Hunan Agricultural University, East China University of Science and Technology, Guangxi University, Guangxi Normal University, Guilin Medical College and Guilin University of Technology. By the end of the reporting period, the company had 58 national invention patents and mastered nearly 300 core technologies for extracting natural ingredients. 2. Brand advantage The company pays attention to brand building in business development and actively implements the "laynInside" brand strategy. After years of brand management and maintenance, the company has cultivated the brand "Rheinland" with high-quality product quality and stable and reliable supply system, and has trademarks such as "Rheinland Bio", "Layn" and "Story of God Fruit". Won the honor of "Quality Supplier of Plant Extracts", "National Key Leading Enterprise of Agricultural Industrialization" and "China Quality Integrity Enterprise", and established a good corporate image in the plant extraction industry, enjoying a certain popularity and reputation. Based on the history of the big health industry for nearly 20 years, the precipitation of intangible assets has continuously improved the brand value of the company. At present, the company has established good cooperative relations with many Fortune 500 companies, and further enhanced its brand image with high-quality products and services. 3. Marketing Advantage The company has strong market adaptability and control ability in marketing, and has built a global marketing system with China, Shanghai, Los Angeles and savona as the core and radiating Europe, America and Asia. We have established business with more than 100 food, beverage, health care products and cosmetics manufacturers and pharmaceutical raw material traders in more than 60 countries and regions around the world, and established stable cooperative relations with many Fortune 500 companies. The successful layout of domestic and foreign markets is an important guarantee for the composition and realization of the company's comprehensive competitive advantage. 4. Advantages of quality management system The company adheres to the production policy of survival by quality and development by quality, strictly controls the whole production process through system construction, and has a complete quality certification system and quality control ability. The company has passed many certifications such as FSSC22000, ISO900 1, ISO22000, ISO 1400 1, and many products have KOS. The company's strategic investment in Zhejiang Ruide Testing and Certification Technology Co., Ltd. laid the foundation for the company to accurately carry out quantitative and qualitative inspection and analysis. The company further standardized management, implemented scientific management, strengthened group operation and improved production efficiency. 5. Advantages of management team The company has an experienced management team and stable core management personnel. The main managers and business backbones have many years of working experience in the industry, have a deep understanding and high sensitivity to the industry, have a unique and profound understanding of the future development of the industry, and can quickly grasp the development trend of the industry and lead the company to develop scientifically, efficiently and steadily. According to the development needs, the company continuously expands and enhances the strength of the core team through various channels such as internal training and external introduction, and empowers the company's sustainable development. At the same time, in order to maintain the stability and enrich the strength of the management team, the company encourages the management team to strive to improve its business performance by implementing a performance appraisal scheme for all employees, and stimulates the team's vitality by improving the organizational structure and process management system, so as to cultivate and enhance the management awareness of managers and lay the foundation for the company's sustained and stable development. 6. Advantages of resources and industrial chain As a natural sugar-free sweetener product, Siraitia grosvenorii extract is an important strategic core product of the company. Siraitia grosvenorii is a special food and medicine resource. Due to the strict requirements for growth conditions, the main producing areas of Siraitia grosvenorii in the world are located in Guilin, where the company is headquartered, and the company has unique production advantages in this variety. The company takes Siraitia grosvenorii extract as the core product, makes full use of the natural geographical advantages of Siraitia grosvenorii raw materials, establishes an organic planting demonstration base of Siraitia grosvenorii in Guilin, and relies on the business model of "company+base+farmers" to plant Siraitia grosvenorii on a large scale, which drives the development of surrounding farmers, saves raw material costs and ensures the safety and reliability of the company's product quality. At the same time, the company has a complete industrial chain, with raw material planting bases in the upstream and end consumer goods such as food, beverages and specialty agricultural products in the downstream. The layout of the whole industrial chain has added new economic growth points for the company and improved its ability to resist risks. 7. Advantages of production scale The fourth generation plant extraction plant of the company was officially put into operation on June 2011July. The new factory has carried out a comprehensive upgrade in production-related equipment and facilities, and the process, production capacity, energy efficiency, environmental protection and automatic control have been qualitatively improved compared with the old factory. During the reporting period, technicians continuously debugged the equipment of the new plant, the production capacity of the new plant was gradually released, and the economic benefits increased steadily. In terms of environmental protection, the company adheres to the concept of simultaneous development of production and environmental construction, and cooperates with gas supply enterprises to carry out "coal to gas" cooperation, which greatly realizes energy saving and emission reduction, reduces the investment of some artificial hydropower equipment, and does not need to deal with a large amount of waste residue after burning in biomass materials. At the same time, a sewage treatment system of 8000 m3/d was built, and the treated water quality reached the national first-class standard. At the same time, a certain amount of biogas can be produced in the process of sewage treatment, which can be completely recovered as the fuel of natural gas boilers and has no pollution to the environment. 2065438+September 2009, the company's Guilin factory was successfully awarded the "National Green Factory". The approval of the national green factory indicates that the company has the characteristics of intensive land use, clean production, waste recycling and low-carbon energy, and has become a demonstration benchmark for green transformation and upgrading of manufacturing industry.