Chengdu Galaxy Magnet 2025 Annual Report Analysis: Net Profit Up 20.75%, Operating Cash Flow Drops 65.41%

Key Profitability Metrics: Revenue and Profit Grow Together, and Profit Quality Improves

In 2025, Chengdu Galaxy Magnet achieved operating revenue of 858.99900676 million yuan, up 7.38% year over year; net profit attributable to shareholders of listed companies was 177.72376967 million yuan, up 20.75% year over year; and net profit excluding non-recurring gains and losses was 172.70839422 million yuan, up 19.63% year over year.

Profit-side growth was faster than revenue growth, mainly due to optimized product mix and cost control: revenue from hot-pressed magnetic materials surged 18.79% year over year, with the share of high-gross-margin products increasing; meanwhile, costs were reduced through raw-material controls, automation upgrades, and other measures, bringing the overall gross margin up from 32.23% last year to 35.16%.

Earnings Per Share: Profitability Improves in Tandem

The company’s basic earnings per share (EPS) for 2025 was 0.55 yuan per share, up 19.57% year over year; non-GAAP EPS was 0.53 yuan per share, up 17.78% year over year. This is consistent with the trend of net profit growth and reflects the company’s steady improvement in profitability.

Expense Structure: Coexistence of Control and Investment

Selling Expenses: Growth Driven by Labor Input

In 2025, selling expenses were 11.1042 million yuan, up 18.88% year over year, mainly because employee compensation increased from 4.6092 million yuan to 7.4749 million yuan, an increase of 62.17%. The company stepped up sales team building to expand the market.

Administrative Expenses: Scale Expansion and Business Development Push Up Costs

Administrative expenses were 47.6930 million yuan, up 19.64% year over year. Of this, consulting fees increased from 5.2580 million yuan to 22.4620 million yuan, and repair expenses increased from 4.9630 million yuan to 20.6910 million yuan, reflecting higher investment in business expansion and optimization of internal management.

Financial Expenses: Revenue Shrinkage Leads to Higher YoY

Financial expenses were -10.6340 million yuan, up 31.54% year over year (revenue decreased). This was mainly because interest income in the current period fell from 14.1640 million yuan to 11.4732 million yuan, and net foreign exchange gains fell from 3.2085 million yuan to 0.3086 million yuan. The two items combined decreased by 4.5907 million yuan.

R&D Expenses: Precision Adjustment of Investment

R&D expenses were 50.1306 million yuan, down 8.74% year over year, but the structure of R&D investment became more focused on core projects. During the year, 8 new patent authorizations were added, including 4 invention patents, covering key technologies such as preparation of high-magnet-energy hot-pressed magnetic materials and preparation of permanent-magnet magnetic powders, providing a foundation for product upgrades.

R&D Personnel: Team Size Remains Stable with Growth

In 2025, the company had 200 R&D personnel, up 3.09% year over year. They accounted for 14.44% of total employees, up 0.74 percentage points year over year. Among R&D personnel, the proportion with a bachelor’s degree or above was 42%, further optimized from the previous year, ensuring the company’s technical innovation capabilities.

Cash Flow: Operating Cash Generation Pressured, Investment Outlays Surge

Cash Flow from Operating Activities: Sharp Contraction

In 2025, net cash flow from operating activities was 99.6622 million yuan, down 65.41% year over year. This was mainly because cash received from sales of goods decreased from 921 million yuan to 821 million yuan. At the same time, cash paid for purchases of goods increased from 406 million yuan to 476 million yuan. One decrease and one increase led to a sharp reduction in net cash flow.

Cash Flow from Investing Activities: Structural Deposits Drive Outlays

Net cash flow from investing activities was -191 million yuan, down 326.44% year over year. This was mainly due to the purchase of structured deposits of 110 million yuan in the current period. Meanwhile, spending on construction of fixed assets was 80.8612 million yuan, up from 44.7964 million yuan last year, an increase of 80.51%. This was used for projects such as construction of the second-phase plant for Galaxy magnet materials.

Cash Flow from Financing Activities: Pressure Eases Somewhat

Net cash flow from financing activities was -109 million yuan, up 43.48% year over year. This was mainly because debt repayment outflows were 30 million yuan in the current period, sharply lower than 70.8969 million yuan in the prior period. Meanwhile, dividend distribution outflows were 114 million yuan, down from 130 million yuan in the prior period.

Risk Warning: Four Major Challenges Need to Be Watched

2. Risk of Fluctuations in Raw Material Prices: The company’s production depends on rare-earth metals. In 2025, the average price of praseodymium and neodymium metals increased 23.8% year over year. If prices continue rising, it will squeeze profit margins.
3. Risk of Downstream Demand Structure Adjustment: The company’s products are used across many application fields and are updated quickly. If it fails to keep up with changes in demand in areas such as automotive motors and energy-saving appliances, it will affect product sales.
4. Export Controls and Tariff Risk: Tightening of rare-earth export controls, combined with changes in overseas tariff policies, may affect the company’s export business. In 2025, the growth rate of revenue from exports was 6.05%, lower than the 7.84% for domestic sales.
5. Risk of Exchange Rate Fluctuations: At the end of 2025, the combined balance of foreign-currency monetary funds and accounts receivable was 867 million yuan. Exchange-rate fluctuations will directly affect the company’s gains and losses from foreign exchange. This period’s net foreign exchange gains have already shrunk significantly.

Executive Compensation: Core Management Pay Tied to Performance

During the reporting period, the chairman Dai Yans tax-before compensation totaled 1.5232 million yuan, the general manager Wu Zhijian was 1.7221 million yuan, deputy general managers Dai Huajin was 1.0805 million yuan and Guo Huiyong was 1.2398 million yuan, and the financial director Zhu Kuiwen was 1.1964 million yuan. Executive compensation is linked to the company’s performance growth. Meanwhile, the company implemented an end-of-year bonus 10% deferred payment mechanism to strengthen the long-term alignment between management and the company’s long-term interests.

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Responsible editor: Xiao Lang Express