海大集团：2025年年度报告（英文版）

2025 Annual Report Section 1 Important Tips, Table of Contents and Interpretation The board of directors, directors and senior management of the companyguarantee that the contents of the annual report are true, accurate and complete,and there are no false records, misleading statements or major omissions, andbear individual and joint legal liabilities. Xue Hua, the person in charge of the company, Yang Shaolin, the person incharge of accounting work, and Yang Shaolin, the person in charge of theaccounting organization (accounting officer), hereby confirm that the financialreport in this annual report is true, accurate and complete. All directors attended the board meeting at which the report was considered. Forward-looking statements such as the company's future plans covered inthis report do not constitute a material commitment of the company to anyinvestors and related parties. Investors are advised to be aware of investment risks. 1. The risk of abnormal weather affecting the periodic fluctuations of thefeed industry The feed industry mainly serves the downstream aquaculture industry.When natural factors such as high temperature, extreme cold, rain, typhoon andother natural factors change abnormally during the breeding process, there maybe large fluctuations in the nu mber of breeding stocks and storage ponds, and even large-scale outbreaksof diseases, which will affect the demand for feed, and there will be a risk of phased or regional demand fluctuations. For example, continuous rainfall willreduce the dissolved oxygen saturation of the water body, deteriorate the waterquality, affect the feeding of aquatic animals, cause farmers to passively reducefeeding, and some aquatic products will not adapt to the drastic changes in theenvironment and even die, which will affect the short-term aquatic feed demand;Floods caused by heavy rainfall in the region in the short term will lead to the lossof aquatic products and livestock and poultry breeding, which will affect thenormal feed demand. After floods, animal epidemics are prone to occur and occurfrequently, which will also adversely affect the production and operation of feedenterprises. Risk response measures: (1) The company is currently deploying factoriesand developing local markets in major breeding regions such as South China,Central China, East China, and North China, as well as overseas markets such asSoutheast Asia, Latin America, and Africa. The expansion of the regional layoutcan effectively deal with the risks of abnormal weather and natural disasters inlocal areas; (2) Continuously improve the service ability of farmers, through thejoint empowerment of feed, seedlings and animal protection, provide scientificbreedingplans,and provide corresponding guidance from the company'stechnicalpersonnel to improve farmers'anti-risk ability and breedingcompetitiveness, and reduce the adverse effects caused by abnormal weatherinfluences. 2. Risks brought by breeding diseases to the company's production andoperation With environmental changes and the development of large-scale breeding,animal diseases will also occur from time to time. For example, the "African swinefever virus" that began to break out nationwide in August 2018, and the diseasessuch as "blue-ear virus" in pigs, "EMS disease" in shrimp farming and "H7N9virus" in poultry have appeared in recent years. The occurrence of diseases willlead to a reduction in the production and stock of farmed animals, which willdirectly inhibit the scale of breeding and reduce the demand for feed in the shortterm; The prevalence of major animal diseases can also easily affect consumerpsychology, leading to shrinking terminal demand, causing the aquacultureindustry to fall into a staged downturn, affecting feed demand. At the same time,the outbreak of regional epidemics will bring about major adjustments in thebreeding structure and stock in some areas, which will affect the demand for feedin the region. Risk response measures: (1) The company's feed varieties cover livestockand poultry feeds such as pig feed, chicken feed and duck and goose feed, andaquatic feeds such as fish feed and shrimp feed. The variety is complete and thestructure is balanced, which can effectively deal with the disease risk of a singlebreeding species. At the same time, the company is currently deploying factoriesand developing local markets in major domestic breeding regions and overseasmarkets such as Southeast Asia, Latin America and Africa. The expansion of the regional layout can effectively deal with the risk of epidemic outbreaks in localareas; (2) The company has established a strict disease prevention and controlsystem in the production process of feed products, and at the same time, it uses itstechnical advantages and professional capabilities to implement the preventionand control of breeding diseases from the source. 3. The risk of major raw materials price fluctuations The feed ingredients are mainly various bul