兄弟科技(002562) - 2025 Q2 - 季度财报

Section I Important Notice, Table of Contents and Definitions This section provides important notices, lists reference documents, and defines key terms used throughout the report for clarity Important Notice The Board of Directors, Supervisory Committee, and senior management guarantee the report's authenticity, accuracy, and completeness, while the company plans no cash dividends or share transfers from capital reserves - The company's Board of Directors, Supervisory Committee, and senior management guarantee the truthfulness, accuracy, and completeness of the semi-annual report content[4] - Company head Qian Zhida, chief accountant Zhang Yonghui, and head of accounting department Lin Weiming declare the financial report is true, accurate, and complete[4] - The company plans not to distribute cash dividends, issue bonus shares, or convert capital reserves into share capital[5] Catalogue of Reference Documents Reference documents include signed financial statements, publicly disclosed company files, the chairman's signed report, and other materials, available at the Board of Directors' office - Reference documents include financial statements signed and sealed by the company's legal representative, chief accountant, and head of accounting department[9] - Reference documents include the originals of all company documents and announcements publicly disclosed on the website designated by the China Securities Regulatory Commission during the reporting period[10] - Reference documents include the original text of the 2025 semi-annual report signed by the chairman[11] Definitions This section defines common terms used in the report, including company names, key subsidiaries, regulatory bodies, and the reporting period, to ensure clear understanding - "Brother Technology", "the Company", "Company" refer to Brother Technology Co Ltd[15] - "Reporting Period/This Reporting Period" refers to January 1, 2025, to June 30, 2025[15] - Multiple wholly-owned subsidiaries and sub-subsidiaries are listed, such as Jiangsu Brother Vitamin Co Ltd and Jiangxi Brother Pharmaceutical Co Ltd[15] Section II Company Profile and Key Financial Indicators This section introduces the company's basic information, stock details, contact methods, and presents key financial data and performance indicators for the reporting period I. Company Profile Brother Technology Co Ltd, stock code 002562, is listed on the Shenzhen Stock Exchange, with Qian Zhida serving as its legal representative - Stock Abbreviation: Brother Technology, Stock Code: 002562[17] - Stock Exchange for Listing: Shenzhen Stock Exchange[17] - Legal Representative of the Company: Qian Zhida[17] II. Contact Persons and Information The company's Board Secretary is Qian Liuhua and Securities Affairs Representative is Yu Gaoyan, with contact details provided for address, phone, and email - Board Secretary: Qian Liuhua, Securities Affairs Representative: Yu Gaoyan[18] - Contact Address: No 1 Xuelin Street, Haizhou Subdistrict, Haining City, Zhejiang Province[18] - Email: stock@brother.com.cn[18] III. Other Information The company's registered address, office address, website, email, and information disclosure locations remained unchanged during the reporting period - The company's registered address, office address, website, email, etc, remained unchanged during the reporting period[19] - Information disclosure and storage locations remained unchanged during the reporting period[20] IV. Key Accounting Data and Financial Indicators The company reported a 3.45% increase in operating revenue and a significant 357.17% rise in net profit attributable to shareholders, despite a 12.22% decrease in net cash flow from operating activities 2025 Semi-Annual Key Accounting Data and Financial Indicators | Indicator | Current Reporting Period (RMB) | Prior Year Period (RMB) | Change from Prior Year Period | | :--- | :--- | :--- | :--- | | Operating Revenue | 1,811,015,673.56 | 1,750,551,285.87 | 3.45% | | Net Profit Attributable to Shareholders of Listed Company | 64,541,031.99 | 14,117,628.95 | 357.17% | | Net Profit Attributable to Shareholders of Listed Company (Excluding Non-Recurring Gains and Losses) | 62,530,564.56 | 11,096,924.60 | 463.49% | | Net Cash Flow from Operating Activities | 15,037,862.44 | 17,131,319.72 | -12.22% | | Basic Earnings Per Share (RMB/share) | 0.0607 | 0.0133 | 356.39% | | Diluted Earnings Per Share (RMB/share) | 0.0607 | 0.0133 | 356.39% | | Weighted Average Return on Net Assets | 2.06% | 0.46% | 1.60% | | End of Current Reporting Period | End of Prior Year | Change from End of Prior Year | | | Total Assets | 5,983,153,136.87 | 5,872,304,877.63 | 1.89% | | Net Assets Attributable to Shareholders of Listed Company | 3,187,460,525.87 | 3,099,701,230.95 | 2.83% | V. Differences in Accounting Data under Domestic and Overseas Accounting Standards The company reported no differences in net profit and net assets between international or overseas accounting standards and Chinese accounting standards during the reporting period - The company reported no differences in net profit and net assets between financial reports disclosed under international accounting standards and those under Chinese accounting standards during the reporting period[23] - The company reported no differences in net profit and net assets between financial reports disclosed under overseas accounting standards and those under Chinese accounting standards during the reporting period[24] VI. Non-Recurring Gains and Losses and Amounts The company's non-recurring gains and losses totaled RMB 2,010,467.43, primarily from government subsidies, non-current asset disposal, and other non-operating income/expenses, net of tax Non-Recurring Gains and Losses and Amounts | Item | Amount (RMB) | | :--- | :--- | | Gains or losses from disposal of non-current assets (including the write-off portion of asset impairment provisions) | -756,631.95 | | Government grants recognized in current profit or loss (excluding those closely related to the company's normal operations, compliant with national policies, enjoyed according to fixed standards, and having a continuous impact on the company's profit or loss) | 3,868,052.57 | | Other non-operating income and expenses apart from the above items | -1,065,495.36 | | Less: Income tax impact | 35,457.83 | | Total | 2,010,467.43 | - The company has no other profit or loss items that meet the definition of non-recurring gains and losses[26] - The company has not classified non-recurring gains and losses as recurring gains and losses[26] Section III Management Discussion and Analysis This section provides an in-depth analysis of the company's main business operations, core competencies, financial performance, investment activities, and risk factors during the reporting period I. Main Business Activities during the Reporting Period The company operates in pharmaceutical, food, and specialty chemicals, achieving growth in revenue and profit through innovation and capacity expansion - The company's main business covers two major areas: pharmaceutical and food (vitamins, flavors and fragrances, pharmaceuticals) and specialty chemicals (leather chemicals, chromium salts)[28] - The company has become a globally renowned producer of vitamins and chromium salts, and has increased investment in flavors and fragrances and pharmaceuticals[28] - In the first half of 2025, the company achieved operating revenue of RMB 1.811 billion, a year-on-year increase of 3.45%; net profit attributable to shareholders of the listed company was RMB 64.54 million, a year-on-year increase of 357.17%[45] (1) Main Products and Downstream Application Areas The company's product portfolio includes various vitamins, flavors and fragrances, pharmaceutical APIs and preparations, chromium salts, and leather chemicals, serving diverse industries - The company has established four major vitamin product industrial platforms for Vitamin K3, B1, B3, and B5, serving the feed, food, daily chemical, and pharmaceutical industries[28] - The "Annual Production of 20,000 Tons of Phenol and 31,100 Tons of Phenol Derivatives Project" was fully completed and put into operation in the first half of 2024, with phenol entering the PEEK field[29] - Iodine contrast agent APIs (Iohexol, Iodipamide) have obtained registration approvals/certificates in China, India, Japan, and other countries, and are being promoted and sold in markets such as India and Turkey[30] (2) Industry Development Status and Overall Trends The vitamin industry shows stable demand with China as a major producer, while flavors and fragrances, pharmaceuticals, chromium salts, and leather chemicals markets are experiencing steady growth and policy-driven changes - In 2024, global vitamin production was approximately 488,900 tons, with China's production at about 420,000 tons, accounting for 85.9% of the global total[33] - The global flavors and fragrances market size was approximately USD 30.6 billion in 2023, expected to increase to USD 32.1 billion in 2025; China's market size was RMB 43.9 billion, expected to exceed RMB 50 billion in 2026[34] - The global API market size reached USD 214.72 billion in 2023, projected to reach USD 384.51 billion by 2033, with a compound annual growth rate of 6.0%; China is the world's largest API producer and exporter[36] (3) Business Model The company's market- and customer-oriented business model integrates production, procurement, and marketing, supported by certified quality management systems and a global sales network, with no significant changes in the reporting period - The company's operations are market and customer-oriented, achieving rapid satisfaction of customer needs through coordinated management of production, procurement, and marketing[41] - The company has established quality management systems, food safety management systems, environmental management systems, and occupational health and safety management systems that comply with certification standards[42] - The company's marketing model primarily focuses on direct sales to users, improving global marketing network construction, and enhancing customer satisfaction and loyalty[44] (4) Key Operating Performance during the Reporting Period In the first half of 2025, the company advanced projects like "Phenol II Project," enhancing production quality through innovation and process optimization, leading to increased revenue and profit due to rising vitamin prices, higher phenol sales, and reduced costs - The company continued to advance the capacity release of new projects such as the "Phenol II Project," improving production and operation quality through technological innovation and process optimization[45] - During the reporting period, prices of some vitamin products increased year-on-year, sales of phenol production line products increased, and costs of some products decreased[45] 2025 Semi-Annual Key Operating Data | Indicator | Amount (RMB 100 million) | Year-on-Year Change | | :--- | :--- | :--- | | Operating Revenue | 18.11 | 3.45% | | Operating Cost | 14.77 | -1.08% | | Net Profit Attributable to Shareholders of Listed Company | 0.64541 | 357.17% | II. Analysis of Core Competencies The company maintains leading market positions in vitamins and chromium salts, leveraging strong brand recognition, advanced R&D, extensive market reach, a skilled team, and integrated internal management systems - The company holds a leading global market share in its two main products: vitamins and chromium salts[46] - The company owns the "Brother (Brother)" brand, which enjoys high recognition and reputation in both international and domestic markets[47] - The company has established a three-tier technological innovation mechanism: Group Research Institute, Business Unit R&D Center, and Base Technology Center, possessing multiple invention patents and technological achievements[48] - The company has further standardized and optimized management functions and business processes through the integrated online implementation of multiple information systems such as SAP/SRM/OA/CRM/HCM[51] III. Analysis of Main Business The company's main business revenue increased by 3.45%, with a 1.08% decrease in operating costs, primarily driven by the pharmaceutical and chemical sector, which accounted for 97.09% of revenue and saw a 3.61% increase in gross profit margin Key Financial Data Year-on-Year Changes | Indicator | Current Reporting Period (RMB) | Prior Year Period (RMB) | Year-on-Year Change | | :--- | :--- | :--- | :--- | | Operating Revenue | 1,811,015,673.56 | 1,750,551,285.87 | 3.45% | | Operating Cost | 1,477,373,228.19 | 1,493,484,925.20 | -1.08% | | Income Tax Expense | 15,896,768.55 | 6,031,705.79 | 163.55% | | Net Cash Flow from Financing Activities | 103,671,452.40 | 44,164,848.55 | 134.74% | Operating Revenue Composition | Category | Current Reporting Period Amount (RMB) | Proportion of Operating Revenue | Prior Year Period Amount (RMB) | Proportion of Operating Revenue | Year-on-Year Change | | :--- | :--- | :--- | :--- | :--- | :--- | | Total Operating Revenue | 1,811,015,673.56 | 100% | 1,750,551,285.87 | 100% | 3.45% | | By Industry | | | | | | | Pharmaceutical and Chemical | 1,758,300,387.30 | 97.09% | 1,703,844,311.32 | 97.33% | 3.20% | | By Product | | | | | | | Pharmaceutical and Food | 1,066,345,671.49 | 58.88% | 1,054,270,637.77 | 60.23% | 1.15% | | Specialty Chemicals | 691,954,715.81 | 38.21% | 649,573,673.55 | 37.11% | 6.52% | | By Region | | | | | | | Domestic Sales | 847,960,506.71 | 46.82% | 755,950,382.30 | 43.18% | 12.17% | | Overseas Sales | 963,055,166.85 | 53.18% | 994,600,903.57 | 56.82% | -3.17% | - The company's profit composition or sources of profit did not undergo significant changes during the reporting period[55] IV. Analysis of Non-Core Business Non-core business activities negatively impacted total profit, primarily due to asset impairment losses from inventory write-downs and goodwill impairment, alongside negative investment income, though government subsidies provided other income Non-Core Business Gains and Losses | Item | Amount (RMB) | Proportion of Total Profit | Reason for Formation | Sustainability | | :--- | :--- | :--- | :--- | :--- | | Investment Income | -85,822.42 | -0.11% | Equity method accounting for long-term equity investment income | No | | Asset Impairment | -36,479,693.74 | -45.35% | Provision for inventory depreciation and goodwill impairment from the acquisition of Brother CISA | No | | Non-Operating Income | 171,577.92 | 0.21% | Write-off of long-aged advance receipts | No | | Non-Operating Expenses | 2,307,894.70 | 2.87% | Loss from disposal of fixed assets | No | | Credit Impairment Losses | -3,964,925.56 | -4.93% | Provision for doubtful accounts receivable | No | | Other Income | 5,421,113.61 | 6.74% | Government grants related to income received | No | V. Analysis of Assets and Liabilities The company's total assets grew by 1.89% to RMB 5.983 billion, with fixed assets decreasing slightly, while long-term borrowings significantly increased by 4.86% and short-term borrowings decreased by 3.76%, and certain assets are restricted Significant Changes in Asset Composition | Item | Amount at End of Current Reporting Period (RMB) | Proportion of Total Assets | Amount at End of Prior Year (RMB) | Proportion of Total Assets | Change in Proportion | | :--- | :--- | :--- | :--- | :--- | :--- | | Monetary Funds | 340,699,676.40 | 5.69% | 276,878,321.46 | 4.71% | 0.98% | | Fixed Assets | 3,326,007,769.04 | 55.59% | 3,358,418,258.45 | 57.19% | -1.60% | | Short-Term Borrowings | 859,667,666.67 | 14.37% | 1,064,938,072.22 | 18.13% | -3.76% | | Long-Term Borrowings | 610,882,355.84 | 10.21% | 314,212,300.80 | 5.35% | 4.86% | - Brother CISA, as a major overseas asset, has an asset scale of RMB 1.016 billion, accounting for 31.86% of the company's net assets, with a business model of producing and selling chromium chemical products and good profitability[62] Asset Rights Restriction Status | Item | Book Balance at Period-End (RMB) | Book Value (RMB) | Type of Restriction | Restriction Details | | :--- | :--- | :--- | :--- | :--- | | Monetary Funds | 33,916,779.31 | 33,916,779.31 | Pledge | Acceptance bill margin and time deposit pledge | | Fixed Assets | 118,987,474.56 | 37,102,399.02 | Mortgage | Mortgage guarantee for borrowings | | Intangible Assets | 14,827,963.40 | 4,910,248.72 | Mortgage | Mortgage guarantee for borrowings | VI. Analysis of Investment Status The company's total investment for the period was RMB 161.90 million, a 27.18% decrease year-on-year, with the "600-ton Iohexol API Project" being a significant ongoing non-equity investment Investment Amount for the Reporting Period | Indicator | Amount (RMB) | | :--- | :--- | | Investment Amount for the Reporting Period | 161,903,414.34 | | Investment Amount for the Prior Year Period | 222,330,268.33 | | Change Rate | -27.18% | - There were no significant equity investments during the reporting period[66] Significant Ongoing Non-Equity Investments | Project Name | Investment Method | Investment Industry | Amount Invested in Current Reporting Period (RMB) | Cumulative Investment Amount as of End of Reporting Period (RMB) | | :--- | :--- | :--- | :--- | :--- | | 600-ton Iohexol API Project | Self-built | API | 38,374,762.73 | 240,822,005.60 | VII. Significant Asset and Equity Disposals The company did not engage in any significant asset or equity disposals during the reporting period - The company did not dispose of significant assets during the reporting period[73] - The company did not dispose of significant equity during the reporting period[74] VIII. Analysis of Major Holding and Participating Companies Key subsidiaries include Brother Vitamin, Brother Pharma, Brother Group (Hong Kong), and Brother Pharmaceutical, with varying net profit performances, and Jiangxi Brother Bioengineering Co Ltd was deregistered during the period Financial Status of Major Subsidiaries | Company Name | Company Type | Main Business | Registered Capital (RMB 10,000) | Net Profit (RMB 10,000) | | :--- | :--- | :--- | :--- | :--- | | Brother Vitamin | Subsidiary | Production and sales of Vitamin B1 | 10,267.1988 | 9,206.321445 | | Brother Pharma | Subsidiary | Production and sales of vitamins, flavors and fragrances, and APIs | 160,000 | -5,205.870179 | | Brother Group (Hong Kong) | Subsidiary | Investment, trade | 77,277.5437 | -1,225.792915 | | Brother Pharmaceutical | Subsidiary | R&D and sales of pharmaceuticals | 100,000 | -1,005.360527 | - The registered capital of Brother Pharmaceutical has been adjusted from RMB 1 billion to RMB 150 million[76] - During the reporting period, Jiangxi Brother Bioengineering Co Ltd was deregistered, which had no impact on the company[77] IX. Structured Entities Controlled by the Company The company did not control any structured entities during the reporting period - The company did not control any structured entities during the reporting period[77] X. Risks Faced by the Company and Countermeasures The company faces risks from macroeconomic uncertainty, industry competition, price volatility, exchange rates, safety, environmental issues, and talent retention, which it addresses through strategic adjustments, R&D, cost control, market expansion, hedging, and talent development - The company faces risks from international political, trade environment, and macroeconomic uncertainties, and will closely monitor developments and adjust strategies[77] - The company's products face competition from peers, and it will maintain its competitive advantage by enhancing R&D innovation, accelerating new project construction, and promoting new products[77] - The EU and US have issued final anti-dumping rulings on Chinese vanillin and ethyl vanillin products; the company will actively explore other non-European and American markets, and plan for other derivative products and overseas capacity layouts[77] - The company will address talent retention risks by improving compensation management, performance appraisal, and incentive mechanisms, expanding talent recruitment and introduction channels, and continuously building talent pipelines[79] XI. Implementation of Market Value Management System and Valuation Enhancement Plan The company has established a Market Value Management System, published on April 26, 2025, but has not disclosed a specific valuation enhancement plan - The company has formulated the "Market Value Management System," with specific details available in the announcement published on Juchao Information Network on April 26, 2025[80] - The company has not disclosed a valuation enhancement plan[80] XII. Implementation of "Quality and Return Dual Improvement" Action Plan The company did not disclose any "Quality and Return Dual Improvement" action plan during the reporting period - The company did not disclose any "Quality and Return Dual Improvement" action plan announcement during the reporting period[81] Section IV Corporate Governance, Environment and Society This section details changes in the company's governance, profit distribution, employee incentives, environmental disclosures, and social responsibility initiatives I. Changes in Directors, Supervisors, and Senior Management There were no changes in the company's directors, supervisors, or senior management during the reporting period - There were no changes in the company's directors, supervisors, or senior management during the reporting period[82] II. Profit Distribution and Capital Reserve to Share Capital Conversion for the Reporting Period The company plans no cash dividends, bonus shares, or capital reserve to share capital conversions for the half-year period - The company plans not to distribute cash dividends, issue bonus shares, or convert capital reserves into share capital for the half-year period[83] III. Implementation of Equity Incentive Plans, Employee Stock Ownership Plans, or Other Employee Incentive Measures The company had no equity incentive plans, employee stock ownership plans, or other employee incentive measures in place or implemented during the reporting period - The company had no equity incentive plans, employee stock ownership plans, or other employee incentive measures and their implementation during the reporting period[85] IV. Environmental Information Disclosure The company and its three main subsidiaries are listed as legally required environmental information disclosure enterprises, with reports accessible via provincial ecological environment department websites - The listed company and its major subsidiaries are all included in the list of enterprises required to disclose environmental information by law, totaling 3 companies[86] - Environmental information disclosure reports for Brother Technology, Brother Pharma, and Brother Vitamin can be accessed through the ecological environment department websites of their respective provinces[86] V. Social Responsibility The company actively fulfills its social responsibilities by protecting shareholder, employee, supplier, customer, and creditor rights, engaging in public welfare, and pursuing sustainable development - The company strictly standardizes shareholder meeting procedures, provides online voting, counts votes separately for matters concerning the interests of small and medium investors, and promptly discloses information to protect the rights and interests of small and medium shareholders[88] - The company has established scientific and comprehensive human resource policies, set up labor unions, and enhances employee welfare and cohesion through compensation management, performance appraisal, team building, and health examinations[89] - The company has established customer and supplier satisfaction survey mechanisms and complaint feedback channels to protect the legitimate rights and interests of customers and suppliers[90] - The company adheres to a green development path, establishes and improves a "full-staff safety production responsibility system," and continuously promotes emission reduction efforts, with its subsidiary Brother Pharma awarded the title of "National Green Factory"[94][95] Section V Significant Matters This section covers significant events including commitments, related party transactions, litigation, penalties, and other material developments affecting the company I. Commitments Fulfilled or Overdue by Controlling Shareholder, Shareholders, Related Parties, Acquirers, and the Company during the Reporting Period There were no commitments fulfilled or overdue by the company's controlling shareholder, shareholders, related parties, acquirers, or the company itself during the reporting period - During the reporting period, there were no commitments by the company's actual controller, shareholders, related parties, acquirers, or the company itself that were fulfilled or overdue as of the end of the reporting period[97] II. Non-Operating Funds Occupied by Controlling Shareholder and Other Related Parties from the Listed Company There were no non-operating funds occupied by the controlling shareholder or other related parties from the listed company during the reporting period - During the reporting period, there were no non-operating funds occupied by the controlling shareholder or other related parties from the listed company[98] III. Irregular External Guarantees The company had no irregular external guarantees during the reporting period - The company had no irregular external guarantees during the reporting period[99] IV. Appointment and Dismissal of Accounting Firms The company's semi-annual financial report was not audited - The company's semi-annual report was not audited[100] V. Board of Directors' and Supervisory Committee's Explanations on "Non-Standard Audit Report" for the Reporting Period The Board of Directors and Supervisory Committee had no explanations regarding a "non-standard audit report" for the reporting period - During the reporting period, there were no explanations from the Board of Directors or Supervisory Committee regarding a "non-standard audit report" for the current reporting period[101] VI. Board of Directors' Explanations on "Non-Standard Audit Report" for the Previous Year The Board of Directors had no explanations regarding a "non-standard audit report" for the previous year - During the reporting period, there were no explanations from the Board of Directors regarding a "non-standard audit report" for the previous year[101] VII. Bankruptcy and Reorganization Matters The company had no bankruptcy or reorganization matters during the reporting period - The company had no bankruptcy or reorganization matters during the reporting period[101] VIII. Litigation Matters The company is involved in two significant lawsuits: a RMB 164.6 million technical secret infringement case with Zhonghua Chemical and Shanghai Xinchen, and a RMB 379.85 million share repurchase dispute with Zhonghua Chemical, both ongoing - Zhonghua Chemical and Shanghai Xinchen re-sued the company and Brother Pharma for technical secret infringement, seeking an order to cease infringement and compensation of RMB 164.6 million, with the case currently appealed to the Supreme People's Court and not yet concluded[104][145] - The company's lawsuit against Zhonghua Chemical for share repurchase, seeking the repurchase of 15.194% of the shares, provisionally valued at RMB 379.85 million, has been accepted by the Nanhu District People's Court of Jiaxing City and is not yet concluded[104][145] - Other minor lawsuits had a cumulative amount involved of RMB 8.6696 million, with no significant impact on the company's profit[104] IX. Penalties and Rectification The company had no penalties or rectification situations during the reporting period - The company had no penalties or rectification situations during the reporting period[105] X. Integrity Status of the Company, its Controlling Shareholder, and Actual Controller There were no integrity issues concerning the company, its controlling shareholder, or actual controller during the reporting period - During the reporting period, there were no integrity issues concerning the company, its controlling shareholder, or actual controller[106] XI. Significant Related Party Transactions The company reported no significant related party transactions concerning daily operations, asset/equity acquisitions or disposals, joint investments, or related party debts/credits during the reporting period - The company had no related party transactions related to daily operations during the reporting period[106] - The company had no related party transactions involving asset or equity acquisitions or disposals during the reporting period[107] - The company had no related party debt or credit transactions during the reporting period[109] XII. Significant Contracts and Their Performance The company had no entrustment, contracting, or leasing matters, but provided guarantees for subsidiaries totaling RMB 780.03 million, representing 24.47% of net assets - The company had no entrustment, contracting, or leasing situations during the reporting period[113][114][115] Company Guarantees for Subsidiaries | Guaranteed Party Name | Announcement Date of Guarantee Quota | Guarantee Quota (RMB 10,000) | Actual Occurrence Date | Actual Guarantee Amount (RMB 10,000) | Guarantee Type | Guarantee Period | Fulfilled | Related Party Guarantee | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Brother Vitamin | April 26, 2025 | 4,000 | January 06, 2025 | 812.85 | Joint and several liability guarantee | 2025-1-6 to 2025-7-6 | No | No | | Brother Pharma | April 26, 2025 | 26,000 | January 15, 2025 | 2,018.2 | Joint and several liability guarantee | 2025-1-15 to 2025-7-15 | No | No | Total Company Guarantees | Indicator | Amount (RMB 10,000) | | :--- | :--- | | Total Guarantee Quota Approved in Reporting Period | 190,000 | | Total Actual Guarantee Amount in Reporting Period | 56,102.91 | | Total Approved Guarantee Quota at End of Reporting Period | 190,000 | | Total Actual Guarantee Balance at End of Reporting Period | 78,002.91 | | Proportion of Total Actual Guarantees to Company's Net Assets | 24.47% | XIII. Explanation of Other Significant Matters The company received CSRC approval for a private placement of shares and is actively progressing the issuance, proposing to extend the resolution and board authorization validity by 12 months - The company has received the China Securities Regulatory Commission's approval for the registration of its private placement of shares (CSRC Permit [2025] No 1174) and is actively progressing the issuance[126] - The company proposes to request the general meeting of shareholders to extend the validity period of the resolution for the private placement of shares and the board's authorization by 12 months[127] XIV. Significant Matters of Company Subsidiaries Several significant matters concerning the company's subsidiaries were disclosed during the reporting period, with relevant announcements available on Securities Times and Juchao Information Network - During the reporting period, several significant matters occurred concerning the company's subsidiaries, with relevant announcements disclosed in "Securities Times" and on Juchao Information Network[128] Section VI Share Changes and Shareholder Information This section details the company's share capital structure, shareholder numbers, and changes in holdings of directors, supervisors, and senior management I. Share Change Status The company's total share capital remained unchanged at 1,063,700,541 shares, with the proportions of restricted and unrestricted shares also stable at 34.05% and 65.95% respectively Share Change Status | Category | Quantity Before This Change (shares) | Proportion Before This Change | Quantity After This Change (shares) | Proportion After This Change | | :--- | :--- | :--- | :--- | :--- | | I. Restricted Shares | 362,171,758 | 34.05% | 362,171,758 | 34.05% | | II. Unrestricted Shares | 701,528,783 | 65.95% | 701,528,783 | 65.95% | | III. Total Shares | 1,063,700,541 | 100.00% | 1,063,700,541 | 100.00% | - The reasons for share changes, approval status, transfer status, and progress of share repurchase implementation are all not applicable for the reporting period[131] II. Securities Issuance and Listing The company had no securities issuance or listing activities during the reporting period - The company had no securities issuance or listing activities during the reporting period[132] III. Number of Shareholders and Shareholding Status As of the reporting period end, the company had 62,897 common shareholders, with controlling shareholders Qian Zhida and Qian Zhiming holding 23.73% and 20.14% respectively, with some shares pledged - As of the end of the reporting period, the total number of common shareholders was 62,897[133] Shareholding Status of Shareholders Holding 5% or More or Top 10 Shareholders | Shareholder Name | Shareholder Nature | Shareholding Proportion | Number of Shares Held at End of Reporting Period (shares) | Change in Shares During Reporting Period (shares) | Number of Restricted Shares Held (shares) | Number of Unrestricted Shares Held (shares) | Share Status | Quantity (shares) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Qian Zhida | Domestic Natural Person | 23.73% | 252,435,628.00 | -4,959,810.00 | 193,046,578.00 | 59,389,050.00 | Pledged | 110,000,000.00 | | Qian Zhiming | Domestic Natural Person | 20.14% | 214,182,400.00 | 0.00 | 160,636,800.00 | 53,545,600.00 | Pledged | 30,000,000.00 | - Qian Zhida and Qian Zhiming are brothers and are the company's controlling shareholders and actual controllers[133] IV. Changes in Shareholdings of Directors, Supervisors, and Senior Management Chairman Qian Zhida reduced his shareholding by 4,959,810 shares during the period, with his total reduction plan completed on July 16, 2025, resulting in a final holding of 21.21% Changes in Shareholdings of Directors, Supervisors, and Senior Management | Name | Position | Employment Status | Number of Shares at Beginning of Period (shares) | Number of Shares Increased in Current Period (shares) | Number of Shares Decreased in Current Period (shares) | Number of Shares at End of Period (shares) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Qian Zhida | Chairman | Current | 257,395,438 | 0 | 4,959,810 | 252,435,628 | - Mr Qian Zhida's share reduction plan was completed on July 16, 2025, with a final reduction of 31,829,410 shares, and his latest shareholding after the reduction is 225,566,028 shares, representing 21.21% of the total shares[137] V. Changes in Controlling Shareholder or Actual Controller There were no changes in the company's controlling shareholder or actual controller during the reporting period - The company's controlling shareholder did not change during the reporting period[138] - The company's actual controller did not change during the reporting period[138] Section VII Bond-Related Information This section provides information regarding the company's bond-related activities Bond-Related Information The company had no bond-related matters during the reporting period - The company had no bond-related matters during the reporting period[141] Section VIII Financial Report This section presents the company's unaudited semi-annual financial statements, including balance sheets, income statements, cash flow statements, and statements of changes in owners' equity, along with detailed notes on accounting policies and financial items I. Audit Report The company's semi-annual financial report was not audited - The company's semi-annual financial report was not audited[143] 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 the 2025 semi-annual period - The consolidated balance sheet shows total assets of RMB 5.983 billion, total liabilities of RMB 2.796 billion, and total owners' equity of RMB 3.187 billion at period-end[147] - The consolidated income statement shows total operating revenue of RMB 1.811 billion and net profit of RMB 64.54 million for the 2025 semi-annual period[154] - The consolidated cash flow statement shows net cash flow from operating activities of RMB 15.04 million, net cash flow from investing activities of -RMB 58.88 million, and net cash flow from financing activities of RMB 103.67 million[159] III. Company Basic Information Brother Technology Co Ltd, established on September 18, 2007, with a registered capital of RMB 1,063,700,541.00, is listed on the Shenzhen Stock Exchange and primarily operates in pharmaceutical, food, and specialty chemicals - Brother Technology Co Ltd was registered and established on September 18, 2007, with its headquarters located in Haining City, Zhejiang Province[180] - The company's registered capital is RMB 1,063,700,541.00, and its shares were listed and traded on the Shenzhen Stock Exchange on March 10, 2011[181] - The company's main business belongs to the pharmaceutical and chemical industry, primarily focusing on two major business segments: pharmaceutical and food, and specialty chemicals[181] IV. Basis of Financial Statement Preparation The company's financial statements are prepared on a going concern basis - The company's financial statements are prepared on a going concern basis[182][183] V. Significant Accounting Policies and Estimates This section details the company's accounting policies and estimates for financial instruments, inventory, fixed assets, construction in progress, intangible assets, and revenue recognition, confirming adherence to accounting standards and no significant changes during the period - The company's financial statements comply with the requirements of enterprise accounting standards, truly and completely reflecting its financial position, operating results, and cash flows[185] - The company's financial assets are classified into three categories: measured at amortized cost, measured at fair value through other comprehensive income, and measured at fair value through profit or loss[198] - The company performs impairment treatment for financial assets measured at amortized cost, debt instrument investments measured at fair value through other comprehensive income, etc, based on expected credit losses[213] - The company's revenue recognition principle involves identifying performance obligations in contracts and determining whether they are fulfilled over time or at a point in time, measuring revenue based on the transaction price allocated to each performance obligation[275][277] - There were no significant changes in accounting policies or significant changes in accounting estimates during the reporting period[293] VI. Taxation The company's main taxes include VAT, urban maintenance and construction tax, corporate income tax, and property tax, with some entities enjoying a 15% high-tech enterprise income tax rate and export tax rebates Main Tax Categories and Rates | Tax Type | Tax Basis | Tax Rate | | :--- | :--- | :--- | | Value-Added Tax (VAT) | Sales of goods and taxable services income | 13% (Subsidiary Brother Pharma's heating income is 9%; sub-subsidiaries Brother South Africa and Brother CISA are located in South Africa, subject to 15% VAT rate) | | Urban Maintenance and Construction Tax | Actual amount of turnover tax paid | 5% | | Corporate Income Tax | Taxable income | 25% | | Property Tax | 1.2% of the original value of property after deducting 30% or 12% of rental income | 1.2%/12% | | Education Surcharge | Actual amount of turnover tax paid | 3% | | Local Education Surcharge | Actual amount of turnover tax paid | 2% | Taxable Entities with Different Corporate Income Tax Rates | Taxable Entity Name | Income Tax Rate | | :--- | :--- | | The Company | 15% | | Brother Vitamin | 15% | | Brother Pharma | 15% | | Brother South Africa, Brother CISA | 27% | | Other Taxable Entities Apart from the Above | 25% | - The company and its subsidiaries Brother Vitamin and Brother Pharma are all recognized as high-tech enterprises, and their corporate income tax is calculated at a reduced rate of 15% for three years starting from 2022/2023[296][297] - The company's export goods enjoy a "exemption, offset, and refund" tax policy, with a tax refund rate of 13% for all products except chromium tanning agents, which have a 0% refund rate[295] VII. Notes to Consolidated Financial Statement Items This section provides detailed notes on the consolidated financial statement items, including period-end and beginning balances and significant changes for cash, receivables, inventory, fixed assets, borrowings, and owners' equity - Monetary funds at period-end totaled RMB 341 million, of which RMB 87.1944 million was deposited overseas[299] - Accounts receivable at period-end had a book value of RMB 472 million, with a bad debt provision of RMB 32.4014 million, and RMB 4.8211 million in bad debt provision was accrued in the current period[310][313] - Inventory at period-end had a book value of RMB 930 million, with an inventory depreciation provision of RMB 48.0621 million, and RMB 37.62 million in inventory depreciation provision was accrued in the current period[369][373] - Fixed assets at period-end had a book value of RMB 3.326 billion, with an increase of RMB 173 million and a decrease of RMB 16.9279 million in the current period, primarily due to depreciation, amortization, and disposals[414][417] - Short-term borrowings at period-end totaled RMB 860 million, a decrease of RMB 205 million from the beginning of the period, mainly due to repayment of maturing borrowings[460] - Long-term borrowings at period-end totaled RMB 611 million, an increase of RMB 297 million from the beginning of the period, mainly due to increased long-term borrowings based on funding plans[497] VIII. Research and Development Expenses The company's total R&D expenditure for the reporting period was RMB 49.78 million, a 6.05% decrease year-on-year, with all expenses recognized as period costs and no capitalized R&D projects R&D Expenditure Composition | Item | Amount Incurred in Current Period (RMB) | Amount Incurred in Prior Period (RMB) | | :--- | :--- | :--- | | Employee Compensation | 22,173,601.70 | 26,493,502.36 | | Material Costs | 10,254,808.83 | 8,730,254.60 | | Fuel and Power | 2,064,733.09 | 3,411,389.68 | | Depreciation and Amortization | 8,287,711.71 | 5,462,354.88 | | Outsourced R&D Expenses | 2,593,221.22 | 6,129,680.88 | | Other Expenses | 4,408,307.57 | 2,761,746.24 | | Total | 49,782,384.12 | 52,988,928.64 | | Of which: Expensed R&D Expenditure | 49,782,384.12 | 52,988,928.64 | - The company had no R&D projects that met the capitalization criteria during the reporting period[581] IX. Changes in Consolidation Scope The company's consolidation scope changed due to the deregistration of its wholly-owned grandchild company, Jiangxi Brother Bioengineering Co Ltd, on April 27, 2025, with no other mergers or loss of control - During the reporting period, the company's wholly-owned grandchild company, Jiangxi Brother Bioengineering Co Ltd, completed its deregistration on April 27, 2025[591] - The company had no business combinations involving entities not under common control during the reporting period[584] - The company had no business combinations involving entities under common control during the reporting period[588] X. Interests in Other Entities This section discloses the company's interests in subsidiaries, joint ventures, and associates, including wholly-owned subsidiaries primarily engaged in manufacturing, trade, and R&D, and an aggregate investment of RMB 7.41 million in non-significant joint ventures and associates - The company owns multiple wholly-owned subsidiaries, including Brother Vitamin, Brother USA, Brother Holdings (Hong Kong), Brother Pharma, Brother Pharmaceutical, Brother Group (Hong Kong), and Brother Chaoxiang Trading[593] - The registered capital of Brother Pharmaceutical has been adjusted from RMB 1 billion to RMB 150 million, and the industrial and commercial change was completed on July 14, 2025[594] - The company's aggregate investment book value in non-significant joint ventures and associates totaled RMB 7.414 million[604] XI. Government Grants The company's deferred income includes RMB 39.32 million in asset-related government grants, with RMB 1.46 million transferred to other income this period, and total government grants recognized in profit or loss amounting to RMB 3.96 million Liability Items Involving Government Grants | Accounting Account | Balance at Beginning of Period (RMB) | Amount Transferred to Other Income in Current Period (RMB) | Balance at End of Period (RMB) | Related to Assets/Income | | :--- | :--- | :--- | :--- | :--- | | Deferred Income | 40,772,810.73 | 1,456,589.34 | 39,316,221.39 | Asset-related | | Of which: Jiangxi Project Infrastructure Construction Subsidy | 39,773,503.80 | 1,356,716.40 | 38,416,787.40 | Asset-related | Government Grants Recognized in Current Profit or Loss | Accounting Account | Amount Incurred in Current Period (RMB) | Amount Incurred in Prior Period (RMB) | | :--- | :--- | :--- | | Government Grants Recognized in Other Income | 3,964,524.27 | 2,801,464.86 | XII. Risks Related to Financial Instruments This section outlines various risks arising from the company's financial instruments, but does not disclose information on hedging activities or financial asset transfers - The company did not disclose information on conducting hedging activities for risk management or applying hedge accounting[609][610] - The company did not disclose information related to financial asset transfers[611] XIII. Disclosure of Fair Value This section discloses the fair value of assets and liabilities measured at fair value at period-end, including valuation techniques and fair value hierarchy levels, with no continuous or non-continuous fair value measurement items during the reporting period - The company did not disclose continuous fair value measurement items[612] - The company did not disclose non-continuous fair value measurement items[612] XIV. Related Parties and Related Party Transactions The company's ultimate controlling parties are Qian Zhida and Qian Zhiming, with related party transactions including sales to Haining Brother Leather Co Ltd, guarantees from Qian Zhida and Liu Qingquan, and key management personnel compensation totaling RMB 4.04 million - The ultimate controlling parties of the enterprise are Qian Zhida and Qian Zhiming[140] - Qian Zhida and Qian Zhiming hold 21.21% and 20.14% of the company's voting rights, respectively[140] Sales of Goods/Provision of Services | Related Party | Related Transaction Content | Amount Incurred in Current Period (RMB) | Amount Incurred in Prior Period (RMB) | | :--- | :--- | :--- | :--- | | Haining Brother Leather Co Ltd | Chromium tanning agents and leather auxiliaries | 138,046.45 | 145,134.95 | The Company as a Guaranteed Party | Guarantor | Guarantee Amount (RMB) | Guarantee Start Date | Guarantee End Date | Has the Guarantee Been Fulfilled | | :--- | :--- | :--- | :--- | :--- | | Qian Zhida, Liu Qingquan | 30,000,000.00 | August 21, 2024 | August 20, 2025 | No | | Qian Zhida, Liu Qingquan | 20,000,000.00 | May 20, 2025 | May 19, 2026 | No | | Qian Zhida, Liu Qingquan | 50,000,000.00 | January 14, 2025 | January 13, 2026 | No | Key Management Personnel Compensation | Item | Amount Incurred in Current Period (RMB) | Amount Incurred in Prior Period (RMB) | | :--- | :--- | :--- | | Key Management Personnel Compensation | 4,041,475.31 | 3,507,071.52 | XV. Share-Based Payment The company had no share-based payment arrangements, including equity-settled or cash-settled, or related expenses, modifications, or terminations during the reporting period - The company had no overall share-based payment situation during the reporting period[636] - The company had no equity-settled share-based payment situation during the reporting period[636] - The company had no cash-settled share-based payment situation during the reporting period[636] XVI. Commitments and Contingencies The company has two significant contingent matters: a RMB 164.6 million technical secret infringement lawsuit and a RMB 379.85 million share repurchase dispute, both currently under judicial review - Zhonghua Chemical and Shanghai Xinchen sued the company and Brother Pharma for technical secret infringement, seeking an order to cease infringement and compensation of RMB 164.6 million, with the case currently appealed to the Supreme People's Court and not yet concluded[637] - The company's lawsuit against Zhonghua Chemical for share repurchase, seeking an order to repurchase 15.194% of the shares held by the plaintiff, provisionally valued at RMB 379.85 million, has been accepted by the Nanhu District People's Court of Jiaxing City and is not yet concluded[638] - The company has no other significant contingent matters requiring disclosure[639] XVII. Events After the Balance Sheet Date The company received CSRC approval for a private placement of shares and is actively progressing the issuance, with no other significant non-adjusting events, profit distributions, or sales returns after the balance sheet date - The company has received the China Securities Regulatory Commission's approval for the registration of its private placement of shares, and is actively progressing the issuance[642] - The company had no significant non-adjusting events, profit distribution situations, or sales returns during the reporting period[641][642] XVIII. Other Significant Matters The company reported no prior period accounting error corrections, debt restructurings, asset exchanges, annuity plans, or discontinued operations, and does not disclose segment information as its main business is managed as a whole - The company had no prior period accounting error corrections, debt restructurings, asset exchanges, annuity plans, or discontinued operations during the reporting period[643][645][647][648][649] - The company's main business involves the production and sale of vitamins, flavors, APIs, leather chemicals, chromium salts, and other series of products; the company manages and evaluates this business as a whole, thus no segment information needs to be disclosed[651] XIX. Notes to Parent Company Financial Statement Items This section details the parent company's financial statement items, including period-end balances and changes for accounts receivable (RMB 107.51 million), other receivables (RMB 1.41 billion, mainly intercompany loans), long-term equity investments (RMB 2.67 billion), operating revenue (RMB 397.59 million), operating costs (RMB 316.54 million), and investment income (RMB 25.11 million) - The parent company's accounts receivable at period-end had a book value of RMB 107.505 million, with a bad debt provision of RMB 3.495 million[654] - The parent company's other receivables at period-end had a book value of RMB 1.406 billion, primarily consisting of intercompany loa