富春染织(605189) - 2025 Q2 - 季度财报

Section I Definitions Definitions of Common Terms This section defines company names, related parties, laws, currency units, and core business terms like printing and dyeing, dyeing, grey yarn, and cotton yarn, ensuring clarity and consistency in the report - The company's abbreviation is "Fuchun Dyeing", with He Peifu and his family members as the controlling shareholders and actual controllers[16] - The reporting period is from January 1, 2025, to June 30, 2025[16] - Core business terms include printing and dyeing (dyeing and finishing), dyeing, grey yarn, and cotton yarn, related to textile color processing and yarn production[16] Section II Company Profile and Key Financial Indicators I. Company Information This section provides the company's basic registration details, including its Chinese name, abbreviation, foreign name, legal representative, controlling shareholder, and actual controller, along with its main wholly-owned subsidiaries - The company's full name is Wuhu Fuchun Dyeing and Weaving Co., Ltd., abbreviated as Fuchun Dyeing, with He Peifu as the legal representative[15] - The controlling shareholder is He Peifu, and the actual controllers are He Peifu, He Biying, He Biyu, and Yu Shiqi[16] - The company owns multiple wholly-owned subsidiaries, with businesses spanning e-commerce, textile technology, textile, dyeing and weaving, color spinning, logistics, printing and dyeing, and high-tech fields[16] II. Contact Persons and Information This section discloses contact information for the company's Board Secretary and Securities Affairs Representative, including names, addresses, phone numbers, faxes, and email addresses, for stakeholder communication - The Board Secretary is Wang Jincheng, and the Securities Affairs Representative is Ding Honglong[17] - The company's contact address is No. 3 Jiuhua North Road, Wuhu Area, China (Anhui) Pilot Free Trade Zone[17] III. Brief Introduction to Changes in Basic Information This section details changes in the company's registered and office addresses, both currently located at No. 3 Jiuhua North Road, Wuhu Area, China (Anhui) Pilot Free Trade Zone, with no other changes during the reporting period - The company's registered and office addresses are both located at No. 3 Jiuhua North Road, Wuhu Area, China (Anhui) Pilot Free Trade Zone[18] - There were no changes in basic information query index during the reporting period[18] IV. Brief Introduction to Changes in Information Disclosure and Document Custody Locations This section specifies the company's designated newspapers for information disclosure, the website for semi-annual reports, and the report custody location, with no changes during the reporting period - The company's designated newspapers for information disclosure are "Shanghai Securities News" and "Securities Times", and the report is published on **www.sse.com.cn**[19](index=19&type=chunk) - The company's semi-annual report is available for inspection at the Company Securities Legal Department[19] V. Company Stock Profile This section provides basic information about the company's stock, including stock type, listing exchange, stock abbreviation, and stock code - The company's A-shares are listed on the Shanghai Stock Exchange, with stock abbreviation "Fuchun Dyeing" and stock code 605189[20] VII. Key Accounting Data and Financial Indicators This section presents the company's key accounting data and financial indicators for H1 2025, showing revenue growth but a significant decline in total profit and net profit attributable to shareholders, primarily due to tariff impacts, weak demand, and increased fixed costs from new projects 2025 H1 Key Accounting Data | Indicator | Current Period (Jan-Jun) | Prior Year Period | Period-on-Period Change (%) | | :--- | :--- | :--- | :--- | | Operating Revenue | 1,469,683,995.30 yuan | 1,351,225,855.22 yuan | 8.77 | | Total Profit | 9,126,626.76 yuan | 96,250,080.45 yuan | -90.52 | | Net Profit Attributable to Shareholders of Listed Company | 13,436,303.11 yuan | 83,553,783.08 yuan | -83.92 | | Net Profit Attributable to Shareholders of Listed Company (Excluding Non-recurring Gains/Losses) | 16,017,167.06 yuan | 65,592,110.46 yuan | -75.58 | | Net Cash Flow from Operating Activities | -503,939,860.16 yuan | -198,772,160.31 yuan | Not Applicable | | Net Assets Attributable to Shareholders of Listed Company (Period-end) | 1,857,037,339.13 yuan | 1,880,071,867.62 yuan | -1.23 | | Total Assets (Period-end) | 5,387,741,599.22 yuan | 5,220,318,775.68 yuan | 3.21 | 2025 H1 Key Financial Indicators | Indicator | Current Period (Jan-Jun) | Prior Year Period | Period-on-Period Change (%) | | :--- | :--- | :--- | :--- | | Basic Earnings Per Share (yuan/share) | 0.07 | 0.52 | -86.54 | | Diluted Earnings Per Share (yuan/share) | 0.07 | 0.56 | -87.50 | | Basic Earnings Per Share (Excluding Non-recurring Gains/Losses) (yuan/share) | 0.08 | 0.41 | -80.49 | | Weighted Average Return on Net Assets (%) | 0.72 | 4.55 | Decreased by 3.83 percentage points | | Weighted Average Return on Net Assets (Excluding Non-recurring Gains/Losses) (%) | 0.85 | 3.57 | Decreased by 2.72 percentage points | - The significant decline in net profit is primarily due to tariff impacts, weakened demand, and increased fixed costs resulting from new projects whose production capacity has not yet been fully released[24] IX. Non-recurring Gains and Losses Items and Amounts This section lists the company's non-recurring gains and losses for H1 2025, totaling negative 2,580,863.95 yuan, primarily including non-current asset disposal losses, government grants, and fair value changes 2025 H1 Non-recurring Gains and Losses Items and Amounts | Non-recurring Gains and Losses Item | Amount (yuan) | | :--- | :--- | | Disposal gains/losses of non-current assets | -6,878,035.53 | | Government grants recognized in current profit or loss | 2,072,700.00 | | Gains/losses from changes in fair value of financial assets and liabilities held by non-financial enterprises, and gains/losses from disposal of financial assets and liabilities | 1,828,803.11 | | Other non-operating income and expenses apart from the above | 2,523.70 | | Less: Income tax impact | -393,144.77 | | Total | -2,580,863.95 | - The total non-recurring gains and losses are negative, mainly impacted by losses from the disposal of non-current assets[26][27] Section III Management Discussion and Analysis I. Explanation of the Company's Industry and Main Business during the Reporting Period This section details the company's textile industry and main business, facing challenges from trade protectionism, weak demand, and rising costs, but increasing market share through new product strategies, while its main business remains the R&D, production, and sale of dyed yarn, with expansions into fiber dyeing and smart precision spinning (1) Industry The company is classified under "Textile Industry" (C17), specifically "Cotton Printing and Dyeing Finishing" (C1713), and actively aligns with encouraged projects in industrial restructuring, increasing market share through market expansion and product innovation despite a severe industry environment - The company and its subsidiaries belong to the "Textile Industry" (C17), specifically "Cotton Printing and Dyeing Finishing" (C1713)[30] - The industry faces severe internal competition, leading to a significant reduction in gross margins and an accelerated rate of enterprise exits[31] - Through strategic deployment in new product markets, the company has increased its market share in both traditional hosiery and new markets (yarn-dyed, knitwear)[31] (2) Main Business Overview The company's main business remains unchanged, focusing on the R&D, production, and sale of dyed yarn, while continuously developing supporting businesses like fiber dyeing and smart precision spinning to meet diverse market demands - The company's main business is the R&D, production, and sale of dyed yarn, with products widely used in hosiery, towels, sweaters, circular knitting, shuttle weaving, and home textiles[32] - The company has established a 30,000-ton fiber dyeing project and a 150,000-spindle smart precision spinning project to meet customer demands for color-spun yarn, high-end yarn counts, and export traceability[32] - The company's industry is "Textile Industry" (C17), specifically "Cotton Printing and Dyeing Finishing" (C1713)[30] - The industry faces challenges including intensified global trade protectionism, tariff impacts, weakened market demand, severe internal competition, and increased production costs, leading to a significant reduction in gross margins[31] - The company is the world's largest package yarn dyeing factory, with an annual output of 132,000 tons of package dyed yarn, and has further increased its market share by strategically entering new product markets[31] - The main business involves the R&D, production, and sale of dyed yarn, with products widely applied in hosiery, towels, sweaters, circular knitting, shuttle weaving, and home textiles[32] - The company has also established a 30,000-ton fiber dyeing project and a 150,000-spindle smart precision spinning project to cater to customer needs for color-spun yarn, high-end yarn counts, and export traceability[32] II. Discussion and Analysis of Operations This section summarizes the company's H1 2025 operating performance, with revenue up 8.77% but net profit attributable to parent down 83.92%, highlighting continuous efforts in sales, product innovation, and environmental protection, and strategic entry into emerging industries by establishing a new subsidiary focused on PEEK applications 2025 Jan-Jun Key Operating Performance | Indicator | Amount (million yuan) | Period-on-Period Change (%) | | :--- | :--- | :--- | | Operating Revenue | 146,968.40 | 8.77 | | Net Profit Attributable to Parent Company Owners | 1,343.63 | -83.92 | | Total Assets (Period-end) | 538,774.16 | 3.21 | | Owners' Equity Attributable to Parent Company (Period-end) | 185,703.73 | -1.23 | - The company's sales revenue increased by 8.77% in the first half of the year, with domestic market sales growing by 8.20%[33] - The company has increased R&D investment and collaborated with universities, resulting in 7 products being recognized as high-tech enterprise products in the past three years[33] - The company prioritizes environmental protection, utilizing advanced environmental technologies and equipment to comply with national environmental standards[33] - In July 2025, the company established a new wholly-owned subsidiary, Wuhu Fuchun High-Tech Co., Ltd., to focus on polyetheretherketone (PEEK) downstream applications, strategically entering emerging industries such as semiconductors, medical devices, lightweight humanoid robots, new energy vehicles, and low-altitude economy, aiming to cultivate a second growth curve[34] III. Analysis of Core Competencies during the Reporting Period This section details the company's six core competencies: "warehouse-style production" with Fuchun standard color cards, ecological and environmental resource advantages, technological equipment advantages, brand and customer resource advantages, product quality advantages, and geographical location advantages, which collectively form the basis for its leading position and sustainable development in the textile dyeing and finishing industry (1) "Warehouse-style Production" Advantage of Fuchun Standard Color Cards The company's self-developed Fuchun standard color card database has enabled a shift from traditional custom-to-order to warehouse-style production, effectively reducing costs, accelerating delivery, and enhancing customer satisfaction - The company has independently developed the Fuchun standard color card database, which includes nearly a thousand colors and is continuously updated, guiding customer consumption habits[35][36] - The business model has shifted to "warehouse-style production as primary, order-based production as supplementary," achieving full-load, batch production, effectively saving resources, reducing costs, and accelerating delivery speed[36] (2) Ecological, Environmental, and Resource Advantages The company possesses core environmental competencies, achieving stable compliance discharge through its self-developed "all-biological wastewater treatment" process, and benefits from direct water intake and self-owned boilers, significantly reducing operating costs - The company possesses a fully independent intellectual property "all-biological wastewater treatment" process, ensuring 24-hour stable compliance discharge of production wastewater, which is at an industry-leading level and significantly reduces wastewater treatment costs[37] - Wuhu Fuchun Dyeing and Anhui Fuchun Color Spinning adhere to indirect discharge standards, while Hubei Fuchun Dyeing adheres to Class A discharge standards, thus avoiding wastewater treatment fees[37] - The company has the right to directly draw water from the Yangtze River, providing abundant and low-cost water resources, and owns two 50-ton circulating fluidized bed boilers, offering an advantage in gas costs[38] - The company has achieved full separation of rainwater and sewage, clean and dirty water, and cold and hot water, with per-ton yarn water consumption and comprehensive energy consumption averages more than 30% below industry standards, earning it the title of "Anhui Province Water-Saving Enterprise"[39] (3) Technological Equipment Advantage The company has increased hardware investment against the trend, introducing world-leading dyeing and finishing equipment, and collaborating with universities to achieve significant technological advancements in dyeing, energy saving, and smart manufacturing, forming a unique technological system - The company has introduced world-leading equipment, including Italian BEILLIN package yarn dyeing equipment, German THIES rapid pressure dryers, and Italian LAWER automatic dyeing auxiliary weighing systems[40] - The company maintains long-term cooperation with Wuhan Textile University, Anhui Engineering University, and Zhejiang Sci-Tech University, developing a series of competitive technological achievements in dyeing technology, energy saving and emission reduction, and smart manufacturing[40] (4) Brand and Customer Resource Advantage The company, with over 20 years of professional experience and continuous innovation, has established a strong market reputation and brand image, owning the "Tianwaitian" China Well-known Trademark, and has accumulated over a thousand indirect customers from top domestic and international sports brands, laying a foundation for its development - The company has been professionally engaged in yarn dyeing and finishing for over 20 years, enjoying high recognition within the industry and being listed as a supplier by numerous foreign brands[41][42] - The "Tianwaitian" trademark has been recognized as a "China Well-known Trademark," enhancing brand awareness and influence[42] - The company maintains long-term cooperative relationships with over a thousand customers, including indirect customers of top domestic and international sports brands, enabling timely insights into downstream demand[42] (5) Product Quality Advantage Adhering to the philosophy of "quality is the life of an enterprise," the company has obtained multiple quality and environmental management system certifications through technological innovation, process improvement, and international standard management, giving its products strong competitive advantages in technical parameters and environmental performance - The company has obtained ISO9001 Quality Management System, ISO14001 Environmental Management System, and GB/T23331-2020/ISO50001:2018 Energy Management System certifications[43] - The company is one of the few in the industry to have passed OEKO-TEX Standard 100 certification and Global Organic Textile Standard (GOTS) certification[43] - Products demonstrate strong competitive advantages in technical parameters such as color fastness, color difference, and strength, as well as in safety, health, green environmental protection, and weaving effects[43] (6) Geographical Advantage The company's layout along the Yangtze River, with production bases in Wuhu and Jingzhou, leverages the Yangtze River's golden waterway, abundant water resources, and convenient transportation network, effectively reducing costs and serving customers in the Yangtze River Delta, Pearl River Delta, and central-western regions - The company is strategically located along the Yangtze River, with production bases in Wuhu and Jingzhou, leveraging the Yangtze River's golden waterway, abundant high-quality water resources, and convenient transportation channels[44] - The Wuhu base covers the Yangtze River Delta, while the Jingzhou base covers the central-western region and radiates to the Pearl River Delta, effectively reducing procurement and sales logistics costs and shortening transportation times[44] - The company's self-developed Fuchun standard color card database has transformed the industry's common custom-to-order model into a "warehouse-style production as primary, order-based production as supplementary" business model, enhancing efficiency and reducing costs[35][36] - The company possesses a fully independent intellectual property "all-biological wastewater treatment" process, achieving 24-hour stable compliance discharge at an industry-leading level, and directly draws water from the Yangtze River with self-owned boilers, significantly reducing water and gas costs[37][38] - The company continuously increases hardware investment, introducing world-leading equipment such as Italian BEILLIN dyeing equipment and German THIES dryers, and collaborates with multiple universities to form a competitive technological system[40] - With over 20 years of experience in yarn dyeing and finishing, the company owns the "Tianwaitian" China Well-known Trademark and has accumulated over a thousand long-term, high-quality customers, including indirect clients of top domestic and international sports brands[41][42] - The company is certified with ISO9001, ISO14001, ISO50001, and is one of the few enterprises to pass OEKO-TEX Standard 100 and GOTS certifications, demonstrating strong product quality and environmental advantages in color fastness, color difference, strength, and environmental performance[43] - The company's strategic layout along the Yangtze River, with production bases in Wuhu and Jingzhou, leverages the golden waterway and convenient land and water transportation networks, effectively reducing procurement and sales logistics costs and covering the Yangtze River Delta and central-western markets[44] IV. Key Operating Performance during the Reporting Period This section analyzes the reasons for changes in key financial statement items and details the company's asset, liability, and investment status, showing increased revenue and costs but significantly decreased total profit and net profit, while maintaining a stable asset-liability structure with a small proportion of overseas assets, and establishing two new wholly-owned subsidiaries to expand its business (1) Main Business Analysis This section analyzes changes in financial statement items, revealing growth in operating revenue and costs, and reasons for changes in selling, general and administrative, financial, and R&D expenses, with financial expenses significantly increasing due to higher borrowing and convertible bond interest Financial Statement Item Change Analysis | Item | Current Period Amount (yuan) | Prior Year Period Amount (yuan) | Change (%) | | :--- | :--- | :--- | :--- | | Operating Revenue | 1,469,683,995.30 | 1,351,225,855.22 | 8.77 | | Operating Cost | 1,323,253,917.13 | 1,155,880,899.64 | 14.48 | | Selling Expenses | 8,814,392.57 | 11,987,904.51 | -26.47 | | Administrative Expenses | 37,315,030.54 | 32,045,253.84 | 16.44 | | Financial Expenses | 35,645,281.99 | 17,278,359.00 | 106.30 | | R&D Expenses | 52,881,986.65 | 60,755,520.06 | -12.96 | | Net Cash Flow from Operating Activities | -503,939,860.16 | -198,772,160.31 | Not Applicable | | Net Cash Flow from Investing Activities | 3,017,155.71 | -216,034,937.61 | Not Applicable | | Net Cash Flow from Financing Activities | 370,384,549.10 | 293,019,725.24 | 26.40 | - Selling expenses decreased by 26.47%, primarily due to reduced transportation costs[47] - Administrative expenses increased by 16.44%, primarily due to increased personnel and employee compensation[47] - R&D expenses decreased by 12.96%, primarily due to reduced investment in R&D materials[47] (3) Analysis of Assets and Liabilities This section analyzes changes in the company's period-end assets and liabilities, with significant increases in accounts receivable, other receivables, other current assets, and prepaid engineering款, while taxes payable and non-current liabilities due within one year decreased, noting that overseas assets are a small proportion and some assets are restricted Asset and Liability Status Changes | Item Name | Current Period End Amount (yuan) | Current Period End % of Total Assets | Prior Year End Amount (yuan) | Prior Year End % of Total Assets | Current Period End Change vs. Prior Year End (%) | Explanation | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Accounts Receivable | 47,389,993.69 | 0.88 | 35,039,200.41 | 0.67 | 35.25 | Increased sales | | Other Receivables | 233,851,834.45 | 4.34 | 109,190,870.14 | 2.09 | 114.17 | Increased futures margin | | Other Current Assets | 219,358,958.80 | 4.07 | 98,298,057.08 | 1.88 | 123.16 | Increased hedging instruments and hedged items at period-end | | Other Non-current Assets | 9,629,523.03 | 0.18 | 4,371,874.20 | 0.08 | 120.26 | Increased prepaid engineering款 | | Taxes Payable | 7,580,448.14 | 0.14 | 22,559,902.68 | 0.43 | -66.40 | Paid prior year-end taxes | | Other Payables | 2,155,586.01 | 0.04 | 941,454.14 | 0.02 | 128.96 | Increased employee reimbursement payments | | Non-current Liabilities Due Within One Year | 74,166,317.98 | 1.38 | 119,536,678.43 | 2.29 | -37.96 | Increased long-term borrowings due within one year | - Overseas assets amount to 62.0285 million yuan, accounting for 1.15% of total assets[50] Major Restricted Assets as of Reporting Period End | Item | Book Value as of June 30, 2025 (yuan) | Reason for Restriction | | :--- | :--- | :--- | | Cash and Cash Equivalents | 54,780,008.57 | Bank acceptance margin | | Cash and Cash Equivalents | 19,327,631.19 | Letter of credit margin | | Notes Receivable | 36,548,562.47 | Endorsed but unmatured notes receivable | | Fixed Assets - Buildings | 46,770,312.82 | Mortgage for maximum credit line | | Intangible Assets - Land Use Rights | 37,543,708.67 | Mortgage for maximum credit line | | Total | 194,970,223.72 | / | (4) Analysis of Investment Status The company actively engaged in external equity investments during the reporting period, establishing two new wholly-owned subsidiaries, Anhui Fuchun Printing and Dyeing Co., Ltd. and Wuhu Fuchun High-Tech Co., Ltd., to expand its traditional main business and strategically enter emerging industries - In January 2025, the company invested in and established a wholly-owned subsidiary, Anhui Fuchun Printing and Dyeing Co., Ltd., with a registered capital of 20 million yuan, holding 100% equity[52] - In July 2025, the company invested in and established a wholly-owned subsidiary, Wuhu Fuchun High-Tech Co., Ltd., with a registered capital of 50 million yuan, holding 100% equity, focusing on polyetheretherketone (PEEK) downstream applications and strategically entering emerging industries[52] (6) Analysis of Major Holding and Participating Companies This section lists the company's major holding subsidiaries, including their business scope, shareholding ratio, registered capital, and key financial data, noting that Hubei Fuchun Dyeing and Weaving Co., Ltd. achieved net profit during the reporting period, positively impacting overall company performance Major Holding Subsidiary Financial Data (Unit: million yuan) | Company Name | Business Scope | Shareholding Ratio | Registered Capital | Total Assets | Net Assets | Net Profit | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Anhui Fuchun Textile Co., Ltd. | Spinning processing; fabric textile processing, etc. | 100% | 10,000 | 83,631.20 | 45,878.84 | -237.23 | | Hubei Fuchun Dyeing and Weaving Co., Ltd. | Fabric printing and dyeing processing; spinning processing, etc. | 100% | 25,000 | 129,166.76 | 29,616.35 | 1,744.84 | | Anhui Tianwaitian Textile Co., Ltd. | Spinning processing; fabric textile processing, etc. | 100% | 2,000 | 66,921.42 | -97.74 | -883.10 | | Anhui Fuchun Color Spinning Co., Ltd. | Fabric printing and dyeing processing; spinning processing, etc. | 100% | 5,000 | 52,599.04 | 3,990.27 | -587.76 | - Hubei Fuchun Dyeing and Weaving Co., Ltd. was the only subsidiary to achieve profitability during the reporting period, with a net profit of 17.4484 million yuan[54] - Anhui Fuchun Printing and Dyeing Co., Ltd. was newly established during the reporting period and is not yet operational[57] - Operating revenue increased by 8.77%, primarily due to increased sales volume[46] - Operating cost increased by 14.48%, primarily due to increased production and sales volume[46] - Financial expenses increased by 106.30%, primarily due to increased interest from borrowings and convertible bonds[46][47] - Net cash flow from operating activities was negative 503.93986016 million yuan, primarily due to increased purchases of raw materials[46][47] - Total assets increased by 3.21%, while net assets attributable to shareholders of the listed company decreased by 1.23%[23] - Overseas assets amounted to 62.0285 million yuan, representing 1.15% of total assets[50] - The company invested in and established wholly-owned subsidiaries Anhui Fuchun Printing and Dyeing Co., Ltd. and Wuhu Fuchun High-Tech Co., Ltd. to expand its business[52] V. Other Disclosure Matters This section details ten potential risks faced by the company, including market competition, macroeconomic fluctuations, industrial policy changes, environmental protection, raw material price volatility, inventory impairment, exchange rate fluctuations, technology loss, trade friction, changes in tax incentives, and insufficient working capital, advising investors to be aware of investment risks (1) Potential Risks The company faces multiple operational risks, including intensified market competition, macroeconomic downturns, stricter environmental policies, raw material price volatility, trade friction, and uncertainty in tax incentive policies, all of which could challenge its profitability and sustainable development - Market competition is intense, requiring the company to continuously innovate to maintain its competitive advantage[57] - Global economic recession and a slowdown in domestic growth may lead to a decrease in demand for textile products[58] - Increased environmental requirements in the printing and dyeing industry may raise the company's environmental governance costs[59][60] - Significant fluctuations in raw material prices could lead to a decline in gross profit margins[61] - Trade friction may result in insufficient downstream orders, indirectly affecting the company[65] - Changes in high-tech enterprise tax incentive policies could impact net profit[66] - The company faces market competition risk; failure to accurately assess market dynamics, untimely technological innovation, or lower-than-expected demand for new products could lead to a decline in performance[57] - Macroeconomic fluctuation risk: intensified global trade protectionism and economic recession may affect textile demand, thereby impacting the company's performance[58] - Industrial policy change risk: increasing demands for energy saving, emission reduction, and transformation and upgrading in the printing and dyeing industry may pose challenges for the company[59] - Environmental protection risk: as a heavily polluting industry, improper treatment of "three wastes" or stricter environmental requirements could increase costs and affect production and operations[60] - Raw material price volatility risk: significant fluctuations in prices of grey yarn, dyes, and chemical auxiliaries could lead to a decline in gross profit margins and performance[61] - Inventory impairment risk: if market conditions change or competition intensifies, a net realizable value of inventory below cost will affect profitability[62] - Exchange rate fluctuation risk: some purchases are settled in foreign currencies, and significant exchange rate fluctuations could impact the company's performance[63] - Technology loss risk: failure to attract talent or loss of core personnel could adversely affect business development[64] - Trade friction risk: for example, the "Uyghur Forced Labor Prevention Act" may cause downstream industry orders to shift back to Southeast Asia, indirectly affecting demand for the company's products[65] - Tax incentive policy change risk: the company and Hubei Fuchun Dyeing and Weaving enjoy a 15% corporate income tax rate as high-tech enterprises; changes in policy or failure to meet certification criteria would affect net profit[66] - Insufficient working capital risk: after listing, there is a high demand for funds for external investments; if operations are poor or financing is insufficient, the company may face a risk of insufficient working capital[67] Section IV Corporate Governance, Environment, and Society I. Changes in Directors and Senior Management This section discloses changes in the company's board of directors, with independent director Wei Lisheng resigning and Ms. Sun Ruixia being elected as an independent director for the third board - Independent director Wei Lisheng resigned, and Ms. Sun Ruixia was elected as an independent director for the company's third board of directors on April 29, 2025[70] II. Profit Distribution or Capital Reserve Conversion Plan This section states that the company will not undertake profit distribution or capital reserve conversion for the semi-annual period - The company's proposed profit distribution plan or capital reserve conversion plan for the semi-annual period is "none," meaning no distribution or conversion will occur[71] IV. Environmental Information of Listed Companies and Their Major Subsidiaries Included in the List of Enterprises Required to Disclose Environmental Information by Law This section discloses that the company and two major subsidiaries are on the list of enterprises required to disclose environmental information by law, and provides an index for querying their environmental information disclosure reports - The company and two subsidiaries (Wuhu Fuchun Dyeing and Weaving Co., Ltd., Hubei Fuchun Dyeing and Weaving Co., Ltd., and Anhui Fuchun Color Spinning Co., Ltd.) are included in the list of enterprises required to disclose environmental information by law[72] - Environmental information disclosure reports can be queried on the Enterprise Environmental Information Disclosure System (Anhui/Hubei)[72] Section V Significant Matters I. Fulfillment of Commitments This section discloses the fulfillment of commitments by the company's actual controllers, shareholders, and senior management during or continuing into the reporting period, including share lock-up and reduction intentions related to the IPO, commitments to resolve horizontal competition, and commitments to fill returns, all of which were strictly fulfilled - The controlling shareholder, actual controllers, and shareholders holding 5% or more of shares committed that, after the lock-up period expires, the total number of shares reduced annually within two years shall not exceed 5% of the total share capital, and the reduction price shall not be lower than the issue price[75][76][77] - The actual controllers committed to taking effective measures to avoid horizontal competition and continuously ensure that related parties do not engage in activities that constitute horizontal competition with the company[77] - All directors, senior management, controlling shareholders, and actual controllers committed to diligently fulfilling return-filling measures and not harming the company's interests[78][79] - All commitment matters were strictly fulfilled during the reporting period, with no instances of failure to fulfill them in a timely manner[75] IV. Semi-Annual Report Audit Status This section states that the company's 2025 semi-annual report is unaudited - This semi-annual report is unaudited[7] VII. Major Litigation and Arbitration Matters This section states that the company had no major litigation or arbitration matters during the reporting period - The company had no major litigation or arbitration matters during this reporting period[81] X. Major Related Party Transactions This section states that the company had no major related party transactions during the reporting period concerning daily operations, asset/equity acquisition/disposal, joint external investments, or related party creditor-debtor relationships - During the reporting period, the company had no major related party transactions related to daily operations[81][82] - During the reporting period, the company had no major related party transactions involving asset acquisition or equity acquisition/disposal[82] - During the reporting period, the company had no major related party transactions involving joint external investments[83] - During the reporting period, the company had no related party creditor-debtor relationships[83] XI. Major Contracts and Their Fulfillment This section discloses the company's significant guarantees, both fulfilled and unfulfilled, during the reporting period, with a total guarantee amount of 1,749.00 million yuan, representing 93.03% of net assets, all provided to subsidiaries within the consolidated scope (2) Major Guarantees Performed and Unfulfilled during the Reporting Period The company's total guarantee amount at the end of the reporting period was 1,749.00 million yuan, accounting for 93.03% of net assets, primarily for subsidiaries, with most guaranteed entities having a debt-to-asset ratio exceeding 70% - At the end of the reporting period, the company's total guarantee amount was 1,749.00 million yuan, accounting for 93.03% of net assets[85] - Of this, the amount of debt guarantees provided for guaranteed entities with a debt-to-asset ratio exceeding 70% was 1,531.00 million yuan[85] Company Total Guarantee Amount (Including Guarantees for Subsidiaries) | Indicator | Amount (million yuan) | | :--- | :--- | | Total guarantees provided to subsidiaries during the reporting period | 35,100.00 | | Total outstanding guarantees provided to subsidiaries at period-end (B) | 174,900.00 | | Total guarantees (A+B) | 174,900.00 | | Total guarantees as a percentage of the company's net assets (%) | 93.03 | | Of which: Debt guarantees provided directly or indirectly to guaranteed entities with a debt-to-asset ratio exceeding 70% (D) | 153,100.00 | | Amount of total guarantees exceeding 50% of net assets (E) | 80,896.41 | | Total of the above three guarantee amounts (C+D+E) | 233,996.41 | - All company guarantees are provided to subsidiaries within the consolidated scope[85] XII. Explanation of Progress in Use of Raised Funds This section details the overall use of the company's raised funds and specific investment projects, with cumulative investment totaling 524.3605 million yuan as of the end of the reporting period, and "Smart Precision Spinning Project (Phase I)" and "60,000-ton High-Quality Package Yarn Dyeing Project" reaching 100% completion, alongside cash management of idle raised funds (1) Overall Use of Raised Funds The company's total raised funds were 570.00 million yuan, with a net amount of 563.1288 million yuan, and as of the end of the reporting period, cumulative investment reached 524.3605 million yuan, representing 93.12% of the total - Total raised funds amounted to 570.00 million yuan, with a net amount of 563.1288 million yuan[86] - As of the end of the reporting period, the cumulative total investment of raised funds was 524.3605 million yuan, with an investment progress of 93.12%[86] (2) Details of Raised Fund Investment Projects Several of the company's raised fund investment projects are completed or near completion, with "Smart Precision Spinning Project (Phase I)," "Package Yarn Production Line Technology Upgrade Project," and "60,000-ton High-Quality Package Yarn Dyeing Project" reaching 100% investment progress - The "Smart Precision Spinning Project (Phase I)" had a committed investment of 400.1288 million yuan, with cumulative investment reaching 409.0721 million yuan, achieving 100% investment progress[88] - The "Package Yarn Production Line Technology Upgrade Project" had a committed investment of 48.00 million yuan, with cumulative investment reaching 48.1334 million yuan, achieving 100% investment progress[88] - The "60,000-ton High-Quality Package Yarn Dyeing Project" had a committed investment of 30.00 million yuan, with cumulative investment reaching 30.0019 million yuan, achieving 100% investment progress[88] - The "30,000-ton Fiber Dyeing Project" has an investment progress of 43.71%[88] (3) Changes or Termination of Raised Fund Investment Projects during the Reporting Period There were no changes or terminations of the company's raised fund investment projects during the reporting period (4) Other Uses of Raised Funds during the Reporting Period The company managed idle raised funds, with a cash management balance of 30.00 million yuan at the end of the reporting period - The company engaged in cash management of idle raised funds, with a cash management balance of 30.00 million yuan at the end of the reporting period[91] (5) Conclusive Opinions of Intermediary Agencies on the Storage and Use of Raised Funds Rongcheng Certified Public Accountants and Guoyuan Securities Co., Ltd. both issued special verification opinions on the company's storage and use of raised funds, concluding that it complied with relevant laws, regulations, and normative documents - Rongcheng Certified Public Accountants believes that the company's storage and actual use of raised funds were prepared in all material respects in accordance with relevant regulations, fairly reflecting the situation[92] - Guoyuan Securities Co., Ltd. believes that the company's storage and use of raised funds comply with laws, regulations, and normative documents, and there are no instances of disguised alteration of the use of raised funds or harm to shareholders' interests[93] Overall Use of Raised Funds (Unit: million yuan) | Indicator | Total Raised Funds | Net Raised Funds (1) | Total Committed Investment (2) | Cumulative Raised Funds Invested as of Period-end (4) | | :--- | :--- | :--- | :--- | :--- | | Amount | 57,000.00 | 56,312.88 | 56,312.88 | 52,436.05 | - As of the end of the reporting period, the cumulative total investment of raised funds accounted for 93.12% of the net raised funds[86] Details of Raised Fund Investment Projects (Unit: million yuan) | Project Name | Total Committed Investment (1) | Cumulative Raised Funds Invested as of Period-end (3) | Investment Progress (%) | | :--- | :--- | :--- | :--- | | Smart Precision Spinning Project (Phase I) | 40,012.88 | 40,907.21 | 100.00 | | Package Yarn Production Line Technology Upgrade Project | 4,800.00 | 4,813.34 | 100.00 | | 30,000-ton Fiber Dyeing Project | 8,500.00 | 3,715.31 | 43.71 | | 60,000-ton High-Quality Package Yarn Dyeing Project | 3,000.00 | 3,000.19 | 100.00 | - The company engaged in cash management of idle raised funds, with a cash management balance of 30.00 million yuan at the end of the reporting period[91] - Rongcheng Certified Public Accountants and Guoyuan Securities Co., Ltd. both issued special verification opinions, concluding that the storage and use of raised funds comply with relevant regulations[92][93] Section VI Share Changes and Shareholder Information I. Share Capital Changes This section discloses the company's share capital changes during the reporting period, primarily due to the implementation of the 2024 equity distribution for capital reserve conversion, resulting in an increase in both unrestricted tradable shares and total shares 1. Share Change Table The company's unrestricted tradable shares and total shares increased due to capital reserve conversion, with total shares reaching 194,076,105 shares after the change - Unrestricted tradable shares increased by 44,309,775 shares, with the number after change being 194,076,105 shares[96] - Total shares increased by 44,309,775 shares, with the number after change being 194,076,105 shares[96] 2. Explanation of Share Changes The increase in the company's share count was due to the implementation of the 2024 equity distribution for capital reserve conversion - The increase in the company's share count during the reporting period was due to the implementation of the 2024 equity distribution for capital reserve conversion[97] Share Change Table | Share Type | Number Before Change (shares) | Change (+, -) | Number After Change (shares) | | :--- | :--- | :--- | :--- | | Unrestricted Tradable Shares | 149,766,330 | 44,309,775 | 194,076,105 | | Total Shares | 149,766,330 | 44,309,775 | 194,076,105 | - The increase in the company's share count during the reporting period was due to the implementation of the 2024 equity distribution for capital reserve conversion[97] II. Shareholder Information This section discloses the total number of shareholders, the top ten shareholders, and the top ten unrestricted tradable share shareholders as of the end of the reporting period, noting that controlling shareholder He Peifu and his family members remain major shareholders, with most of He Peifu's shares pledged (1) Total Number of Shareholders As of the end of the reporting period, the company had 7,303 common shareholders - As of the end of the reporting period, the total number of common shareholders was 7,303[99] (2) Top Ten Shareholders and Top Ten Unrestricted Tradable Shareholders as of the End of the Reporting Period Among the company's top ten shareholders, He Peifu and his family members hold a high proportion of shares, with most of He Peifu's shares pledged, and the company's special repurchase securities account holds 2,067,080 shares - He Peifu is the largest shareholder, holding 89,051,352 shares, accounting for 45.88%, of which 87,163,544 shares are pledged[101] - The top five shareholders are all related parties or related enterprises, with a combined shareholding ratio exceeding 67%[101] - The company's special repurchase securities account holds 2,067,080 shares, accounting for 1.07% of the total share capital[101] Top Ten Shareholders' Shareholding | Shareholder Name | Period-end Shareholding (shares) | Percentage (%) | Share Status | Pledged Amount (shares) | | :--- | :--- | :--- | :--- | :--- | | He Peifu | 89,051,352 | 45.88 | Pledged | 87,163,544 | | He Biyu | 11,488,022 | 5.92 | Unrestricted | 0 | | He Biying | 11,188,320 | 5.76 | Unrestricted | 0 | | Wuhu Fuchun Venture Capital Partnership (Limited Partnership) | 10,183,680 | 5.25 | Unrestricted | 0 | | Wuhu Qinhui Venture Capital Partnership (Limited Partnership) | 9,784,320 | 5.04 | Unrestricted | 0 | | Wuhu Fuchun Dyeing and Weaving Co., Ltd. Repurchase Special Securities Account | 2,067,080 | 1.07 | Unrestricted | 0 | | Changjiang Securities Co., Ltd. | 1,988,220 | 1.02 | Unrestricted | 0 | | Li Xiushan | 1,642,480 | 0.85 | Unrestricted | 0 | | China Merchants Bank Co., Ltd. - Penghua Hongjia Flexible Allocation Mixed Securities Investment Fund | 1,084,798 | 0.56 | Unrestricted | 0 | | Chen Fang | 900,000 | 0.46 | Unrestricted | 0 | - He Peifu, He Biying, and He Biyu are family members, and He Peifu is a limited partner of Fuchun Investment and Qinhui Investment, indicating a related party relationship[101] - Controlling shareholder He Peifu has 87,163,544 shares pledged out of his total 89,051,352 shares[101] III. Directors and Senior Management Information This section discloses changes in the shareholdings of the company's directors and senior management, with Chairman He Peifu's shareholding increasing due to the company's 2024 equity distribution for capital reserve conversion (1) Shareholding Changes of Current and Resigned Directors and Senior Management during the Reporting Period Chairman He Peifu's shareholding increased due to the company's 2024 equity distribution for capital reserve conversion, while specific changes for other directors and senior management were not disclosed - Mr. He Peifu's shareholding increased by 20,550,312 shares during the reporting period, with a period-end holding of 89,051,352 shares, primarily due to the company's implementation of the 2024 equity distribution for capital reserve conversion[103] - Chairman He Peifu's period-end shareholding is 89,051,352 shares, an increase of 20,550,312 shares from the beginning of the period, resulting from the company's implementation of the 2024 equity distribution for capital reserve conversion[103] Section VII Bond-Related Information II. Convertible Corporate Bonds This section details the issuance, holders, changes, conversion, and conversion price adjustments of the company's convertible corporate bonds (Fuchun Convertible Bonds), with a total issuance of 570 million yuan for a 6-year term, 2,321 bondholders at period-end, controlling shareholder He Peifu as guarantor and major bondholder, and multiple conversion price adjustments, standing at 11.98 yuan/share at period-end (1) Convertible Bond Issuance The company publicly issued 570 million yuan of "Fuchun Convertible Bonds" on June 23, 2022, listed on the Shanghai Stock Exchange, with a 6-year term - The company publicly issued 5.7 million convertible corporate bonds on June 23, 2022, with a total issuance of 570 million yuan and a term of 6 years[105] - "Fuchun Convertible Bonds" began trading on the Shanghai Stock Exchange on July 25, 2022, with bond code "111005"[105] (2) Convertible Bond Holders and Guarantor during the Reporting Period As of the end of the reporting period, Fuchun Convertible Bonds had 2,321 holders, with controlling shareholder He Peifu as the guarantor and the largest holder of the convertible bonds - The number of convertible bondholders at the end of the period was 2,321[106] - The guarantor for the company's convertible bonds is He Peifu[106] - He Peifu holds 125.253 million yuan in convertible bonds, accounting for 23.64% of the total held[106] (3) Convertible Bond Changes during the Reporting Period During the reporting period, Fuchun Convertible Bonds saw no conversion, redemption, or put options exercised, maintaining its period-end balance - During the reporting period, Fuchun Convertible Bonds had 0 conversions, 0 redemptions, and 0 put options exercised, with a period-end balance of 529.811 million yuan[109] (4) Cumulative Convertible Bond Conversion during the Reporting Period Fuchun Convertible Bonds had no conversions during the reporting period, but cumulatively 5,938 shares have been converted, with 92.9493% of the total issuance still unconverted - The conversion amount was 0 yuan and the number of converted shares was 0 shares during the reporting period[110] - The cumulative number of converted shares is 5,938 shares, accounting for 0.0048% of the company's total shares issued before conversion[110] - The unconverted amount is 529.811 million yuan, representing 92.9493% of the total convertible bond issuance[110] (5) History of Conversion Price Adjustments The conversion price of Fuchun Convertible Bonds has been adjusted multiple times due to downward revisions and equity distributions, with the latest conversion price at 11.98 yuan/share as of the end of the reporting period - The conversion price has undergone multiple adjustments, from an initial 23.19 yuan/share to 11.98 yuan/share at the end of the reporting period[112] - The most recent adjustment was due to the company's implementation of the 2024 equity distribution, with the conversion price adjusted from 15.70 yuan/share to 11.98 yuan/share effective June 26, 2025[112] (6) Company's Debt Situation, Credit Rating Changes, and Cash Arrangements for Future Debt Repayment As of June 30, 2025, the company's total assets were 5,387.7416 million yuan, with a debt-to-asset ratio of 65.53%, and its credit ratings for both the company and Fuchun Convertible Bonds are "AA-", with a "stable" outlook, indicating that future debt repayment will primarily come from operating cash flow - As of June 30, 2025, the company's total assets were 5,387.7416 million yuan, with an asset-liability ratio of 65.53%[113] - The company's main credit rating and the "Fuchun Convertible Bonds" credit rating are both "AA-", with the rating outlook remaining "stable," and the rating results are unchanged from the previous assessment[113] - The company's funds for repaying convertible bond principal and interest in future years will primarily come from cash flow generated by its operating activities, demonstrating strong repayment capability[113] - The company publicly issued "Fuchun Convertible Bonds" on June 23, 2022, with a total issuance of 570 million yuan and a term of 6 years[105] - At the end of the period, there were 2,321 convertible bondholders, with controlling shareholder He Peifu serving as the guarantor and holding 125.253 million yuan in convertible bonds, representing 23.64% of the total held[106] - During the reporting period, there were no conversions of convertible bonds; cumulatively, 5,938 shares have been converted, with an unconverted amount of 529.811 million yuan, accounting for 92.9493% of the total issuance[109][110] - The conversion price has undergone multiple adjustments, with the latest conversion price at 11.98 yuan/share as of the end of the reporting period[112] - The company's main credit rating is "AA-", with the rating outlook remaining "stable," indicating strong repayment capability[113] Section VIII Financial Report I. Audit Report This section states that the company's 2025 semi-annual financial report is unaudited - This semi-annual report is unaudited[7] II. Financial Statements This section provides the company's consolidated and parent company balance sheets, income statements, cash flow statements, and statements of changes in owners' equity for H1 2025, comprehensively presenting its financial position, operating results, and cash flow Consolidated Balance Sheet As of June 30, 2025, the company's consolidated total assets were 5.388 billion yuan, with current assets accounting for approximately 59.24%, and short-term borrowings and bonds payable as the main liabilities, while total owners' equity was 1.857 billion yuan Consolidated Balance Sheet Key Data | Item | June 30, 2025 (yuan) | December 31, 2024 (yuan) | | :--- | :--- | :--- | | Total Assets | 5,387,741,599.22 | 5,220,318,775.68 | | Total Current Assets | 3,191,925,001.18 | 2,977,013,908.49 | | Total Non-current Assets | 2,195,816,598.04 | 2,243,304,867.19 | | Total Liabilities | 3,530,704,260.09 | 3,340,246,908.06 | | Total Owners' Equity | 1,857,037,339.13 | 1,880,071,867.62 | - The period-end balance of short-term borrowings is 1,962,130,589.75 yuan, an increase from the beginning of the period[117] - The period-end balance of inventory is 1,693,834,750.62 yuan, an increase from the beginning of the period[116] Parent Company Balance Sheet As of June 30, 2025, the parent company's total assets were 4.358 billion yuan, with current assets totaling 2.672 billion yuan, and short-term borrowings and bonds payable as the main liabilities, while total owners' equity was 1.733 billion yuan Parent Company Balance Sheet Key Data | Item | June 30, 2025 (yuan) | December 31, 2024 (yuan) | | :--- | :--- | :--- | | Total Assets | 4,357,576,630.28 | 4,175,250,325.66 | | Total Current Assets | 2,671,999,268.85 | 2,417,135,504.27 | | Total Liabilities | 2,624,776,280.16 | 2,399,986,064.75 | | Total Owners' Equity | 1,732,800,350.12 | 1,775,264,260.91 | - The period-end balance of the parent company's short-term borrowings is 1,592,270,451.32 yuan, a significant increase from the beginning of the period[120] - The period-end balance of the parent company's other receivables is 1,474,988,039.57 yuan, an increase from the beginning of the period[119] Consolidated Income Statement The company's consolidated total operating revenue for H1 2025 was 1.470 billion yuan, up 8.77% year-on-year, but net profit was 13.4363 million yuan, a significant 83.92% year-on-year decrease, mainly due to a substantial decline in total profit Consolidated Income Statement Key Data | Item | 2025 H1 (yuan) | 2024 H1 (yuan) | | :--- | :--- | :--- | | Total Operating Revenue | 1,469,683,995.30 | 1,351,225,855.22 | | Total Operating Cost | 1,466,724,329.15 | 1,284,638,309.25 | | Total Profit | 9,126,626.76 | 96,250,080.45 | | Net Profit | 13,436,303.11 | 83,553,783.08 | | Net Profit Attributable to Parent Company Shareholders | 13,436,303.11 | 83,553,783.08 | - Total profit decreased by 90.52% year-on-year, and net profit decreased by 83.92% year-on-year[22][24] - Financial expenses increased by 106.30% year-on-year, primarily due to increased interest expenses[124] Parent Company Income Statement The parent company's operating revenue for H1 2025 was 901.0122 million yuan, down 30.02% year-on-year, with net profit turning from profit to loss at -6.7396 million yuan, mainly due to decreased operating revenue and increased non-operating expenses Parent Company Income Statement Key Data | Item | 2025 H1 (yuan) | 2024 H1 (yuan) | | :--- | :--- | :--- | | Operating Revenue | 901,012,207.84 | 1,287,416,745.94 | | Operating Profit | -4,934,424.97 | 64,424,162.43 | | Total Profit | -10,347,055.39 | 65,282,710.43 | | Net Profit | -6,739,605.79 | 56,680,598.76 | - The parent company's operating revenue decreased by 30.02% year-on-year, and net profit turned from a profit of 56.6806 million yuan in the prior year to a loss of 6.7396 million yuan[127][128][143] - Non-operating expenses significantly increased, primarily due to losses from the disposal of non-current assets[139] Consolidated Cash Flow Statement The company's net cash flow from operating activities for H1 2025 was -504 million yuan, an increased outflow compared to the previous year, primarily due to increased raw material purchases, while net cash flow from investing activities turned positive, and net cash flow from financing activitie