Wasu Media 2025 Annual Report Analysis: Net Profit Excluding Non-Recurring Items Down 19.08%, Investment Cash Flow Net Amount Decreased by 45.91% Year-over-Year

Interpretation of Core Profitability Metrics

Slight Dip in Operating Revenue, Pressure on Traditional Operations

In 2025, Huashu Media achieved operating revenue of RMB 9.178 billion, down 2.30% year over year. By product segment, traditional business declined notably: digital television revenue was RMB 1.103 billion, down 9.36% year over year; interactive television business revenue was RMB 358 million, down sharply by 24.58% year over year; program transmission revenue was RMB 99 million, down 16.11% year over year; revenue from equipment and materials sales was RMB 375 million, down 21.57% year over year. Only broadband and data communications business revenue increased to RMB 1.602 billion, up 2.23% year over year; group customer integration project revenue was RMB 2.842 billion, up marginally by 1.02% year over year, becoming the main support on the revenue side.

Three Consecutive Drops in Net Profit; Pressure from Non-GAAP Profit Becomes Prominent

During the reporting period, net profit attributable to shareholders of listed companies was RMB 466 million, down 12.65% year over year—this marks the company’s third consecutive year of decline in net profit. Non-GAAP net profit was RMB 302 million, down significantly by 19.08% year over year; the decline far exceeded that of net profit, indicating that the company’s core business profitability pressure is continuing to increase.

Earnings Per Share Declines in Step

Basic earnings per share were RMB 0.25 per share, down 13.79% year over year. Non-GAAP earnings per share were RMB 0.16 per share, down 19.08% year over year, consistent with the change in non-GAAP net profit, reflecting that the decline in the company’s profitability level directly carried through to the EPS level.

Expense Control and R&D Investment

Optimized Expense Structure; Reduced R&D Spending

In 2025, the company’s total period expenses were RMB 2.335 billion, down slightly by 0.85% year over year. Of these:

• Selling expenses were RMB 990.2 million, up 1.12% year over year, mainly used for market expansion and user retention;
• Administrative expenses were RMB 873.57 million, down 2.29% year over year, reflecting the company’s cost-control effectiveness on the management side;
• Financial expenses were negative RMB 125 million, with little change year over year, mainly because interest income (RMB 196 million) exceeded interest expense (RMB 54 million);
• R&D expenses were RMB 595.78 million, down 7.59% year over year; the reduction in R&D investment may be related to the company’s short-term profitability pressure.

R&D Headcount Slightly Expands, But Age Structure Turns Older

As of the end of 2025, the company had 732 R&D personnel, up 2.23% year over year, and their share of total employees increased to 6.60%. However, the age structure of R&D personnel shows a trend toward aging: there were 112 R&D personnel under age 30, down sharply by 18.25% year over year; there were 261 R&D personnel age 40 and above, up significantly by 25.48% year over year. The attrition of younger R&D personnel may affect the company’s long-term capability for technical innovation.

Cash Flow and Capital Operations

Operating Cash Flow Is Stable; Investing Cash Flow Sees a Large Outflow

• Net cash flow from operating activities was RMB 1.860 billion, down 4.13% year over year, mainly due to an increase in cash paid for purchases of goods and acceptance of labor services of 10.44% year over year. Nevertheless, it remains at a relatively high level, showing that the company’s “cash-generating” ability from its core business is still stable;
• Net cash flow from investing activities was negative RMB 2.081 billion, with the decline reaching 45.91% year over year. This was mainly due to an increase in purchases of wealth-management products and funds placed in time deposits, leading to an increase in investing cash outflows of 5.95% year over year;
• Net cash flow from financing activities was negative RMB 171 million, with the loss narrowing by 84.74% year over year, mainly because cash paid for debt repayment decreased by 33.41% year over year.

Corporate Governance and Management Compensation

Chairman and CEO Compensation Remains Unchanged

During the reporting period, the chairman, Qiao Xiaoyan, received total pre-tax compensation from the company of RMB 1.0226 million, while the CEO, Shen Ziqiang, received total pre-tax compensation of RMB 1.0115 million. Their compensation levels were basically the same, and there was no significant change compared with the previous year.

Material Differences in Vice President Compensation

The company has multiple vice presidents with differing compensation: Lu Zhongqiang, Yao Miaohua, Cheng Fang, and Liu Xingwei all had pre-tax compensation of RMB 7.34 million; Xu Rui had RMB 6.34 million; Hong Fanglei had RMB 5.92 million; Cao Yanming started working in April 2025 with pre-tax compensation of RMB 1.885 million; Zhou Yan started working in November 2025 with pre-tax compensation of RMB 1.09 million; vice president He Gang, who left the post, had pre-tax compensation of RMB 6.84 million.

Financial Controller Compensation Is Stable

The financial controller, Che Tong, had pre-tax compensation of RMB 6.92 million, and the compensation level remained stable, consistent with the company’s compensation system for the core management team.

Risk Warnings

Risk of Decline in Traditional Business

With the continued penetration of new media businesses such as IPTV and OTT, the scale of the company’s cable TV user base continues to shrink, and revenue from traditional audio-visual businesses declines noticeably. If the company cannot continuously drive business transformation, it will have long-term negative impacts on the company’s performance.

Risk of Intensifying Market Competition

Although broadband and data communications business maintains growth, it faces fierce competition from traditional telecom operators such as China Telecom and China Unicom. The market for group customer integration projects also faces challenges from numerous system integrators, creating a risk that the company’s market share could be squeezed.

Risk of Lag in Technological Innovation

A reduction in R&D spending and the loss of young R&D personnel may lead to the company’s deployment in emerging technologies such as 5G, AI, and ultra-high-definition running behind schedule, making it difficult to capture development opportunities brought by technological changes in the industry.

Risk of Delayed Accounts Receivable Collection

As of the end of 2025, the company’s book value of accounts receivable was RMB 2.035 billion, up 9.07% year over year. If some customers’ operating conditions deteriorate, there will be a risk that accounts receivable are not collected on time, and even the risk of bad debts, which would affect the stability of the company’s cash flow.

Click to view the announcement text>>

Disclaimer: There are risks in the market; invest with caution. This article is automatically published by an AI large model based on third-party databases and does not represent the views of Sina Finance. Any information appearing in this article is for reference only and does not constitute personal investment advice. If there is any discrepancy, please refer to the actual announcement. If you have any questions, please contact biz@staff.sina.com.cn.

A massive amount of information and precise analysis—only on the Sina Finance app

Responsible editor: Xiaolang Express News