Xidian New Energy's revenue increased by 28.52%, net profit rose by 14.50%, operating cash flow surged by 42.29%, but gross profit margin remains under pressure.

Baleen News, March 27—Today, Xidian New Energy released its 2025 annual financial report. In 2025, the company saw both revenue and net profit rise year over year. The growth rate of operating cash flow was significantly higher than that of profits, and its collections improved. However, both the gross margin and net profit margin fell. The growth rate of selling expenses was faster than revenue, putting pressure on earnings quality. Business activities continued to shift toward a battery connection system, and capacity expansion supports growth, but internationalization has lagged; its share of overseas revenue still stands at only 6.58%.

Revenue and profit both grew, but earnings quality came under pressure

In 2025, the company achieved operating revenue of RMB 2.782 billion, up 28.52% year over year; attributable net profit was RMB 261 million, up 14.50% year over year; and non-recurring profit-and-loss excluded net profit was RMB 258 million, up 18.02% year over year, with the growth rate 3.52 percentage points higher than attributable net profit. Net cash flow from operating activities was RMB 218 million, up 42.29% year over year; the increase was notably higher than the growth rates of revenue and attributable net profit. The financial report explicitly states that this growth was mainly driven by increased sales collections.

Gross margin was 15.73%, down 1.68 percentage points year over year; net profit margin was 9.38%, down 1.22 percentage points year over year. Operating costs rose 31.77% year over year, exceeding the revenue growth rate by 2.63 percentage points, directly leading to the decline in gross margin. By product, the battery connection system generated revenue of RMB 2.315 billion, accounting for 83.22% of total revenue. Its gross margin declined 1.56 percentage points year over year, which was the main single factor pulling down the overall gross margin. Industrial electrical busbar revenue was RMB 196 million, accounting for 7.06%, with gross margin down 0.99 percentage points year over year. The gross margin of the control cabinet busbar increased 1.00 percentage point year over year.

Total non-recurring gains and losses were RMB 2.8261 million, accounting for 1.08% of attributable net profit. Of this, government subsidies were RMB 1.4074 million, and the fair value changes and disposal gains/losses of financial assets were RMB 3.7117 million. Although the latter amount exceeded the former, under the non-recurring gains and losses total measure, the overall proportion still remained at a relatively low level, indicating that the profit structure continued to be mainly driven by recurring income.

Selling expenses were RMB 13.0419 million, up 33.83% year over year, which was 5.31 percentage points higher than the revenue growth rate, and also significantly higher than the 18.86% growth rate of R&D investment. Against the backdrop of gross margin pressure and operating cost growth outpacing revenue, the faster growth of selling expenses created a certain dilution effect on net profit margin. R&D investment was RMB 74.2612 million, up 18.86% year over year, accounting for 2.67% of operating revenue. The number of R&D personnel was 185, but the report did not disclose comparable data from the prior year. The growth rate of R&D investment was 9.66 percentage points lower than the revenue growth rate, and also 14.97 percentage points lower than the growth rate of selling expenses. This indicates that, at this stage, the focus of resource allocation has temporarily shifted toward market expansion.

Core business concentration increased, but internationalization progressed slowly

The company’s main business is highly concentrated in the battery connection system, with this segment accounting for 83.22% of revenue. Industrial electrical busbars and control cabinet busbars account for 7.06% and 6.44%, respectively; the combined share of the three exceeds 97% of operating business revenue. The combined share of the battery connection system and industrial electrical busbars rose to 90.28%, further concentrating the product structure toward core high-share categories. The expansion project for an annual output of 8 million pieces of battery connection systems has been completed. Cumulative investment was RMB 220 million, with progress at 100.73%. Capacity release effectively supported the expansion of revenue scale.

Market regional distribution continues to be highly concentrated. Revenue from domestic markets was RMB 2.555 billion, accounting for 91.85% of total revenue; overseas revenue was RMB 183 million, accounting for 6.58%. Although the company’s overseas factory in Chonburi Province, Thailand, has been completed and leasing operations have been launched, and Xidian Technology has also newly established operations, the proportion of overseas revenue has not increased. The market layout still relies heavily on the domestic market. The Chengdu battery connection system production and construction project had cumulative investment of RMB 202 million, with progress at 52.39%; the R&D center construction project had cumulative investment of RMB 22.8014 million, with progress at 34.59%. The above fund-raised investment projects have not yet fully reached production capacity. The over-raised funds of RMB 170 million have been fully used.

In summary, the company’s revenue has maintained relatively rapid growth, and operating cash flow performs better than the profit growth rate, reflecting improved collection capability. However, both gross margin and net profit margin are under pressure at the same time; the growth rate of selling expenses has continued to exceed that of revenue. Combined with the decline in gross margin for core products, earnings quality faces structural pressure. The business structure has further concentrated toward the battery connection system, and capacity expansion projects have been landing one after another, but internationalization has lagged; the overseas revenue share has not increased in line with overseas factory construction. At the capital level, the company has a strong dividend and share repurchase力度, and the proportion of shareholder returns remains at a relatively high level.