Brother Enterprises (SZ:002562)2021-05-17 16:00Financial Performance - The company's operating revenue for 2020 was CNY 1,918,791,969.17, representing a 52.56% increase compared to CNY 1,257,717,108.48 in 2019[19] - The net profit attributable to shareholders for 2020 was CNY 28,028,820.43, a decrease of 36.04% from CNY 43,825,506.17 in 2019[19] - The total profit for the year was 41.20 million yuan, representing a year-on-year decrease of 13.17%[51] - The net profit after deducting non-recurring gains and losses was CNY 9,224,159.32, down 32.16% from CNY 13,597,471.92 in 2019[19] - The basic earnings per share for 2020 were CNY 0.03, down 40.00% from CNY 0.05 in 2019[19] - The weighted average return on net assets for 2020 was 1.18%, a decrease of 0.73% from 1.91% in 2019[19] Cash Flow and Assets - The net cash flow from operating activities improved by 69.42%, reaching CNY -28,867,357.01 in 2020, compared to CNY -94,413,204.39 in 2019[19] - The total assets at the end of 2020 were CNY 5,358,440,754.77, an increase of 24.33% from CNY 4,309,940,220.92 at the end of 2019[19] - The net assets attributable to shareholders increased by 30.64% to CNY 3,026,684,441.43 at the end of 2020, up from CNY 2,316,895,826.60 at the end of 2019[19] - The company's cash and cash equivalents decreased by 5.88% to 748,081,305.76 yuan, mainly due to payments for the acquisition of Brother CISA and funds raised from a private placement[89] Market Position and Growth - The company has established a strong position in the vitamin market, with an estimated production of 390,000 tons in China in 2020, accounting for 80% of global production, and a market value of approximately $3.9 billion[33] - The global vitamin export volume is projected to reach 340,000 tons in 2020, reflecting a growth rate of 20%, with export value around $3.1 billion, an increase of approximately 18% year-on-year[34] - The company is expanding its investment in the flavor and fragrance sector, with the first phase of its key project producing 20,000 tons of phenol and 31,100 tons of phenolic derivatives completed in late 2020[30] - The company aims to build a comprehensive competitive advantage in the flavor and fragrance industry through ongoing investments and project developments[30] Acquisitions and Investments - The company completed a refinancing in December 2020, raising a net amount of 536 million yuan to support its flavor and fragrance segment[52] - The company signed a significant acquisition of 100% equity in Brother CISA for 623.6774 million yuan on January 10, 2020[76] - The acquisition and integration of Brother CISA is expected to strengthen the company's brand, technology, and market advantages in the leather chemicals sector[48] - The company has invested a total of 155,246,000 CNY in a project to produce 20,000 tons of phenol and 31,100 tons of flavoring materials, with a cumulative investment of 703,326,000 CNY by the end of the reporting period[96] Research and Development - The company obtained 7 invention patents and 18 utility model patents during the reporting period, enhancing its technological innovation capabilities[53] - Research and development expenses were 69,771,942.03 yuan in 2020, representing 3.64% of operating revenue, down from 5.60% in 2019[79] - The company has a total of 103 patents related to its main products, showcasing its strong R&D capabilities and proprietary technology[55] Environmental and Safety Compliance - The company emphasizes safety and environmental protection as key components of sustainable development, adhering to legal regulations and enhancing control measures[122] - The company has invested in environmental protection, actively responding to national energy-saving and emission reduction policies, and improving its production processes to minimize environmental impact[164] - The company has achieved compliance with environmental discharge standards, with all monitored pollutants meeting regulatory limits[167] - The company has established emergency response plans for environmental incidents, with all plans filed with local environmental authorities[170] Shareholder and Equity Information - The total number of shares increased from 902,031,312 to 947,618,963 due to the conversion of convertible bonds, adding 45,587,651 shares[183] - The basic earnings per share decreased from 0.05 yuan to 0.04 yuan after the share conversion[180] - The largest shareholder, Qian Zhida, holds 27.16% of the shares, totaling 257,395,438 shares, with 124,810,000 shares pledged[186] - The company did not engage in any repurchase transactions during the reporting period[186] Risks and Challenges - The company has acknowledged potential risks in its future development and has outlined corresponding countermeasures in its report[6] - The company faces risks from macroeconomic uncertainties and industry competition, and it will enhance its R&D capabilities to maintain competitive advantages[121] - The company has a significant portion of its sales from overseas, which exposes it to foreign exchange risks that can impact profitability[122]