Brother Enterprises (SZ:002562)2022-04-27 16:00Financial Performance - The company's operating revenue for 2021 was approximately ¥2.73 billion, representing a 42.43% increase compared to ¥1.92 billion in 2020[21]. - The net profit attributable to shareholders for 2021 was approximately ¥28.33 million, a slight increase of 1.08% from ¥28.03 million in 2020[21]. - The net profit after deducting non-recurring gains and losses was approximately ¥9.75 million, reflecting a 5.67% increase from ¥9.22 million in 2020[21]. - The total assets at the end of 2021 amounted to approximately ¥5.60 billion, which is a 4.54% increase from ¥5.36 billion at the end of 2020[21]. - The net assets attributable to shareholders decreased by 1.04% to approximately ¥2.99 billion from ¥3.03 billion in 2020[21]. - The company reported a negative net cash flow from operating activities of approximately ¥68.96 million, worsening by 138.90% compared to a negative cash flow of ¥28.87 million in 2020[21]. - Basic and diluted earnings per share remained unchanged at ¥0.03 in 2021, consistent with 2020[21]. - The weighted average return on equity decreased to 0.94% in 2021 from 1.18% in 2020, indicating a decline in profitability[21]. - The overall gross profit margin declined due to lower sales prices and high production costs during the ramp-up phase of new projects[52]. - The gross profit margin for the pharmaceutical and chemical sector was 12.93%, reflecting a decrease of 11.10% compared to the previous year[59]. Revenue and Market Growth - In Q4 2021, the company's operating revenue reached ¥827,116,112.97, marking a significant increase compared to previous quarters[24]. - The net profit attributable to shareholders in Q4 2021 was ¥25,351,555.22, a recovery from a loss of ¥19,576,952.58 in Q2 2021[24]. - The net cash flow from operating activities in Q4 2021 was positive at ¥171,061,567.37, contrasting with negative cash flows in the earlier quarters[24]. - The vitamin market in China is projected to grow by 3.7% in 2021, with an estimated production of 404,000 tons, accounting for 81.8% of global output[30]. - The global flavor and fragrance market is expected to grow at a CAGR of 3.6% from 2021 to 2026, reaching a market size of $50.2 billion by 2026[30]. - The global API market is projected to grow from $182.2 billion in 2019 to $245.2 billion by 2024, with a CAGR of 6.1%[31]. - The Chinese pharmaceutical market has become the third largest globally, with significant profit growth in the pharmaceutical manufacturing sector in 2021[32]. - The CMO/CDMO market in China is expected to maintain a CAGR of over 18% from 2020 to 2025, with a market size exceeding ¥120 billion by 2025[33]. Production and Investment - The company focuses on the pharmaceutical, food, and specialty chemicals sectors, with major products including vitamins, flavors, and pharmaceutical raw materials[35]. - The company has established a production platform for four major vitamins: Vitamin K3, B1, B3, and B5, providing reliable products to various industries[35]. - The company has invested in the flavor and pharmaceutical sectors, aiming to become a recognized emerging enterprise in these fields[36]. - The first phase of the phenol project, with an annual production capacity of 20,000 tons of phenol and 31,100 tons of phenol derivatives, was completed and has started production[36]. - The iodine contrast agent project, with an annual production capacity of 1,000 tons, was also completed and has begun production, targeting X-ray imaging applications[36]. - The company has completed the first phase of a project to produce 13,000 tons of Vitamin B3 and 3,000 tons of flavors and intermediates, which is currently in the equipment debugging stage[46]. - The company has ongoing construction projects for an annual production capacity of 2,190 tons of flavors and 1,500 tons of vitamins and intermediates, with environmental approvals obtained[46]. - The company has a design capacity of 35,600 tons for pharmaceutical and food products, with a utilization rate of 67.58%[46]. Research and Development - The company invested ¥116,001,793.49 in R&D, marking a 66.26% increase compared to the previous year, driven by an expanding product line[70]. - The number of R&D personnel rose to 325, a 2.52% increase from 317 in 2020[72]. - The company holds multiple patents for its products, including Vitamin K3 and Vitamin B1, demonstrating strong R&D capabilities and proprietary technology[45]. - The company obtained 6 invention patents during the reporting period, focusing on innovations in vitamins, flavors, and raw material drugs[53]. Operational Strategies - The company emphasizes a market-oriented operational model, ensuring efficient production and procurement processes to meet customer demands[41]. - The procurement strategy focuses on scientific market forecasting and supplier management, maintaining a stable supply of raw materials[42]. - The marketing strategy is centered on customer satisfaction and building a strong ecosystem, with a focus on direct sales and a global marketing network[43]. - The company has established a comprehensive quality management system, achieving multiple certifications to ensure high production efficiency and safety[41]. Financial Management and Governance - The company launched its first employee stock ownership plan in December 2021 to enhance employee motivation and cohesion[52]. - The company has established a comprehensive internal control system in accordance with relevant laws and regulations, with the audit department responsible for monitoring its effectiveness[144]. - The company has a structured remuneration scheme based on performance evaluations and company operating results[126]. - The company maintains a high level of information disclosure, ensuring that all investors have equal access to company information through designated platforms[112]. - The company has established a strong internal audit and compliance framework to ensure financial accuracy and regulatory adherence[126]. Environmental and Social Responsibility - The company emphasizes safety and environmental protection as key to sustainable development, adhering to legal requirements and enhancing management capabilities[105]. - The company actively engages in public welfare activities, including support for pandemic prevention efforts and job creation for disabled individuals[161]. - The company has been recognized as a "National Green Factory" for its outstanding control in safety, environmental protection, and automation at its Jiujiang base[164]. - The company is committed to green development, focusing on reducing VOC emissions and controlling waste generation through cleaner production processes[163]. Shareholder Engagement - The company emphasizes shareholder rights protection by ensuring transparent communication and participation in shareholder meetings[160]. - The company held 2 shareholder meetings during the reporting period, including 1 annual and 1 extraordinary meeting, all conducted in compliance with legal procedures[109]. - The participation rate of investors in the 2021 first extraordinary general meeting was 45.10%[116]. - The company has a cash dividend policy that complies with its articles of association and relevant regulations, ensuring transparency and protection of minority shareholders' rights[142].