Eagle Eye Warning: Shengxing Co., Ltd.'s Operating Revenue and Net Profit Diverge

Sina Finance Listed Company Research Institute | Financial Report Eagle Eye Warning

On March 17, Shengxing Co., Ltd. released its 2025 annual report.

The report shows that the company’s total operating revenue for 2025 is 7.174 billion yuan, a year-on-year increase of 0.61%; the net profit attributable to the parent company is 307 million yuan, a year-on-year decrease of 27.44%; the net profit attributable to the parent company after deducting non-recurring gains and losses is 279 million yuan, a year-on-year decrease of 31.49%; basic earnings per share is 0.31 yuan/share.

Since its listing in April 2015, the company has issued cash dividends 10 times, with a cumulative cash dividend of 441 million yuan.

The listed company’s financial report eagle eye warning system conducts intelligent quantitative analysis of Shengxing Co., Ltd.'s 2025 annual report from four dimensions: performance quality, profitability, financial pressure and safety, and operational efficiency.

1. Performance Quality Aspect

During the reporting period, the company’s revenue was 7.174 billion yuan, a year-on-year increase of 0.61%; the net profit was 305 million yuan, a year-on-year decrease of 28.25%; the net cash flow from operating activities was 560 million yuan, a year-on-year increase of 6.85%.

From an overall performance perspective, key concerns include:

• The growth rate of net profit attributable to the parent company continues to decline. In the recent three annual reports, the year-on-year changes in net profit attributable to the parent company were 59.25%, 27.1%, and -27.44%, showing a consistent downward trend.

• The growth rate of net profit attributable to the parent company after deducting non-recurring gains and losses continues to decline. In the recent three annual reports, the year-on-year changes in net profit attributable to the parent company after deducting non-recurring gains and losses were 82.08%, 20.98%, and -31.49%, showing a consistent downward trend.

• Revenue and net profit changes are diverging. During the reporting period, revenue increased by 0.61% year-on-year, while net profit decreased by 28.25%, indicating a divergence between revenue and net profit changes.

• Net profit is quite volatile. In the recent three annual reports, net profits were 340 million, 420 million, and 300 million respectively, with year-on-year changes of 56.11%, 26.76%, and -28.25%, indicating significant volatility in net profit.

From the perspective of revenue costs and period expense ratios, key concerns include:

• Revenue and tax changes are diverging. During the reporting period, revenue increased by 0.61% year-on-year, while taxes and fees decreased by 3.32% year-on-year, indicating a divergence between revenue and tax changes.

From the perspective of operating asset quality, key concerns include:

• Inventory growth rate exceeds operating cost growth rate. During the reporting period, inventory increased by 22.1% compared to the beginning of the period, while operating costs increased by 4.7% year-on-year, indicating that inventory growth exceeds operating cost growth.

| Item | 20231231 | 20241231 | 20251231 | | Inventory growth rate compared to the beginning of the period | -12.25% | 1.28% | 22.1% | | Operating cost growth rate | -3.69% | -0.85% | 4.7% |

• Inventory growth rate exceeds revenue growth rate. During the reporting period, inventory increased by 22.1% compared to the beginning of the period, while revenue increased by 0.61% year-on-year, indicating that inventory growth exceeds revenue growth.

| Item | 20231231 | 20241231 | 20251231 | | Inventory growth rate compared to the beginning of the period | -12.25% | 1.28% | 22.1% | | Revenue growth rate | 0.6% | 0.5% | 0.61% |

2. Profitability Aspect

During the reporting period, the company’s gross profit margin was 11.03%, a year-on-year decrease of 23.96%; the net profit margin was 4.25%, a year-on-year decrease of 28.69%; the return on equity (weighted) was 8.82%, a year-on-year decrease of 32.1%.

From the perspective of company operations, key concerns include:

• Sales gross profit margin has significantly decreased. During the reporting period, the sales gross profit margin was 11.03%, a significant year-on-year decrease of 23.96%.

• Sales net profit margin has significantly decreased. During the reporting period, the sales net profit margin was 4.25%, a significant year-on-year decrease of 28.69%.

From the perspective of company assets, key concerns include:

• Return on equity has significantly decreased. During the reporting period, the weighted average return on equity was 8.82%, a significant year-on-year decrease of 32.1%.

• Return on invested capital is below 7%. During the reporting period, the company’s return on invested capital was 6.85%, with an average value below 7% over three reporting periods.

From the perspective of customer concentration and minority shareholders, key concerns include:

• The top five suppliers account for a large proportion of purchases. During the reporting period, the ratio of purchases from the top five suppliers to total purchases was 63.46%, indicating a risk of excessive reliance on suppliers.

3. Financial Pressure and Safety Aspect

During the reporting period, the company’s asset-liability ratio was 54.07%, a year-on-year decrease of 3.57%; the current ratio was 1.1, and the quick ratio was 0.82; total debt was 3.027 billion yuan, of which short-term debt was 2.653 billion yuan, accounting for 87.66% of total debt.

From the perspective of short-term financial pressure, key concerns include:

• Short-term debt is large, and there is a funding gap. During the reporting period, broad money funds were 840 million yuan, while short-term debt was 980 million yuan, with a ratio of broad money funds to short-term debt of 0.85, indicating that broad money funds are below short-term debt.

• Cash ratio is below 0.25. During the reporting period, the cash ratio was 0.21, which is below 0.25.

From the perspective of fund management, key concerns include:

• The interest income to cash funds ratio is less than 1.5%. During the reporting period, cash funds were 750 million yuan, short-term debt was 980 million yuan, and the average ratio of interest income to cash funds was 1.142%, which is below 1.5%.

• Prepaid accounts have significant fluctuations. During the reporting period, prepaid accounts were 240 million yuan, with a change rate of 37.69% compared to the beginning of the period.

• The growth rate of prepaid accounts exceeds the growth rate of operating costs. During the reporting period, prepaid accounts increased by 37.69% compared to the beginning of the period, while operating costs increased by 4.7% year-on-year, indicating that the growth rate of prepaid accounts exceeds the growth rate of operating costs.

| Item | 20231231 | 20241231 | 20251231 | | Growth rate of prepaid accounts compared to the beginning of the period | 71.86% | -12.12% | 37.69% | | Operating cost growth rate | -3.69% | -0.85% | 4.7% |

From the perspective of financial coordination, key concerns include:

• Funds are coordinated, but there are payment difficulties. During the reporting period, working capital was 370 million yuan, while the company’s working capital requirement was 2.121 billion yuan, indicating that the operating capital from financing activities cannot fully cover the funding needs of the company’s operating activities, resulting in a cash payment capability of -1.754 billion yuan.

| Item | 20251231 | | Cash payment capability (yuan) | -1.754 billion | | Working capital requirement (yuan) | 2.121 billion | | Working capital (yuan) | 367 million |

4. Operational Efficiency Aspect

During the reporting period, the company’s accounts receivable turnover ratio was 3.81, a year-on-year decrease of 0.38%; inventory turnover ratio was 6.83, a year-on-year decrease of 6.31%; total asset turnover ratio was 0.91, a year-on-year increase of 5.9%.

From the perspective of operating assets, key concerns include:

• The accounts receivable turnover ratio continues to decline. In the recent three annual reports, the accounts receivable turnover ratios were 4.12, 3.83, and 3.81, indicating a weakening ability to turn over accounts receivable.

• The ratio of inventory to total assets continues to grow. In the recent three annual reports, the ratios of inventory to total assets were 9.67%, 10.6%, and 13.23%, indicating continuous growth.

From the perspective of long-term assets, key concerns include:

• Long-term prepaid expenses have changed significantly compared to the beginning of the period. During the reporting period, long-term prepaid expenses were 50 million yuan, an increase of 108.63% compared to the beginning of the period.

• Other non-current assets have significant fluctuations. During the reporting period, other non-current assets were 70 million yuan, an increase of 62.42% compared to the beginning of the period.

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Editor: Xiao Lang Quick Report