Hua Qin Technology (688281) net profit in 2025 decreased by 24.28% year-on-year, due to increased R&D investment and losses from subsidiaries.

HuaQin Technology (688281) announced on February 14th that in 2025, the company achieved operating revenue of 1.251 billion yuan, a year-on-year increase of 9.83%; net profit attributable to the parent company’s owners was 313 million yuan, a decrease of 24.28% year-on-year.

HuaQin Technology stated in the announcement that the company’s headquarters’ special functional materials and other products are in a critical stage of product updates and replacements. The proportion of revenue from research and trial production products is gradually increasing. However, since these products have not yet been finalized for mass production, affected by process route optimization, new production line debugging, and yield ramp-up, the new model products have not yet achieved large-scale production, and trial production costs are relatively high. Some special functional material products at the headquarters are temporarily priced with a difference from the final approved prices, which also impacts the revenue and profit for 2025.

The company’s R&D investment in 2025 is approximately 59.65% higher than in 2024. As the number of R&D personnel increases and more projects are underway, the consumption of R&D materials, R&D personnel costs, external collaboration expenses, and testing expenditures have all shown significant growth. The increased R&D investment in 2025 will have a certain short-term impact on profitability, but these investments will effectively strengthen the company’s technological barriers and build a solid foundation for long-term sustainable development and core competitiveness.

The subsidiary is currently in the market expansion and capacity utilization ramp-up stage. Overall investment and current returns are temporarily mismatched. During this period, capitalized construction costs, trial operation expenses, and operating costs of unfinished production lines are relatively high, causing temporary pressure on overall profitability.

According to Tongbi Finance, the company mainly engages in the research, production, and sales of special functional materials. It also continues to expand its business in the aerospace industry chain and advanced new materials sector, developing businesses or products such as aerospace component processing, ceramic matrix composites, acoustic metamaterials and acoustic instruments, and ultra-fine crystal components manufacturing.