Finance Association News October 10th (Reporter Zhang Chenjing) Despite a diversified business layout resulting in 'diversified losses,' Fortune Ng Fung Food (600965.SH) saw a halving of performance and customer loss in the first half of the year, leading to considerable dissatisfaction among investors. Chairman and General Manager Li Liang stated at this afternoon's performance briefing that the loss of important customers is the responsibility of the company's board of directors and management.

Fortune Ng Fung Food's main businesses include ecological agriculture, beef cattle breeding and farming, food processing and manufacturing, dining services, and funeral services. The revenue for the first half of this year was 0.46 billion yuan, a year-on-year decrease of 19.49%, with a net income attributable to the parent company of 30.7331 million yuan, down by 66.85% year-on-year. Looking at quarterly data, the total revenue for the second quarter was 0.227 billion yuan, a 15.01% year-on-year decrease, with a net income of 7.5467 million yuan, down by 77.71% year-on-year for the second quarter.

The performance of the beef cattle farming and dining sectors is mainly affected by the overall market situation and macro reasons, but the reason the food processing sector's performance is unsatisfactory is due to the company's operations. Some investors directly asked: 'As the largest pre-cooked food production company in the North, the company lost a major customer in the first-half of this year. What is the reason for this? Who is responsible for the company's marketing team management? The development of online sales channels is stagnating, what is the reason?'

Li Liang responded that the intensity of market competition has increased, and the loss of important customers is the responsibility of the company's board of directors and management. The company will carefully study the reasons, expand customer channels, and currently promote products on jd.com and Douyin (TikTok).

However, this investor is not convinced of the company's promotional results and further inquired about the low number of followers on Douyin's marketing account. Have you considered collaborating with internet celebrities to boost sales?

Li Liang expressed his regret: 'The company has collaborated with internet celebrities before, and the results were good for a while; however, some internet celebrities' popularity fades quickly, so careful consideration is needed.'

It is worth noting that investors are quite dissatisfied with the company not only due to poor performance but also because of frequent internal control issues over the years.

Fortune Ng Fung Food is a family-owned enterprise, with Li Liang, the legal representative and chairman, being the grandson of the founder Li Fucheng. The current largest shareholder of the company is Fucheng Investment Group Co., Ltd., with the actual controller being the father and son Li Fucheng and Li Gaosheng.

Following the incident in 2022 where the chief financial officer of the company refused to sign the annual report due to intervention from major shareholders in the company's management, this year there was another warning letter issued by the Hebei Securities Regulatory Office for obstructing the independent director from exercising his powers.

In July this year, the Hebei Securities Regulatory Office issued a letter of concern to the company, requesting the company to cooperate with the independent director to promptly study and determine a third-party intermediary with judicial recognition qualification to conduct a re-examination of the company's cattle farm construction project, which had discrepancies in actual construction and completion settlement for the years 2022 and 2023. Subsequently, the company's independent director held a special meeting to determine the re-examination organization and informed the company's management, requesting the company to cooperate, sign the contract, and start the re-examination work soon. However, Fortune Ng Fung Food refused to sign an agreement with the re-examination organization, obstructing the independent director from exercising his powers.

During today's performance briefing, an investor asked the chief financial officer Zhen Lanlan, "Does the company still need approval from major shareholders in the financial management process?" Zhen Lanlan replied, "The question you asked is inherently incorrect." Regarding the progress of the re-examination report asked by a journalist from Caijing, Li Liang only said, "It is in progress, please pay attention to the company's announcement."