Guoen Co., Ltd. 2025 Annual Report Analysis: Non-recurring Net Profit Surges by 55.15%, Financial Expenses Soar by 46.45%

Core Profitability Indicator Interpretation

Operating Revenue Grows Steadily

In 2025, Guoen Co., Ltd. recorded operating revenue of RMB 21.251 billion, up 10.57% year over year. Judging by the business structure, revenue from green petrochemical materials and new materials reached RMB 5.290 billion, up 36.72% year over year, becoming the core driver of revenue growth; organic polymer composite materials revenue was RMB 3.917 billion, up 23.36%; and organic polymer modified materials revenue was RMB 10.357 billion, up only 0.31% year over year. The share decreased from 53.72% last year to 48.74%, and the business structure continued to improve.

Net Profit and Non-GAAP Net Profit Diverge Significantly

Net profit attributable to shareholders of listed companies was RMB 841.29 million, up 24.38% year over year; non-GAAP net profit was RMB 823.34 million, up 55.15% year over year, far outpacing the growth rate of net profit. This is mainly because non-recurring gains and losses totaled RMB 146 million in the prior year, while only RMB 18 million occurred in the current period, making the underlying profitability after adjusting for non-GAAP items stand out.

Earnings Per Share Also Improves in Sync

Basic earnings per share were RMB 3.17 per share, up 25.79% year over year; non-GAAP earnings per share were RMB 3.04 per share, up 55.31% year over year. This matches the growth rate of non-GAAP net profit, reflecting a significant improvement in earnings per share.

Deep Dive into Expense Structure

Total Expenses Up 20.42% Year over Year

In 2025, the company’s total period expenses were RMB 1.252 billion, up 20.42% year over year. The growth rate is higher than that of operating revenue, creating some pressure on profitability.

R&D Spending Continues to Increase

R&D expenses were RMB 685 million, up 15.93% year over year. R&D spending as a percentage of operating revenue was 3.27%, up 0.13 percentage points from the prior year. The number of R&D personnel was 761, up 1.20% year over year. Among them, R&D personnel aged 30–40 increased by 7.62%, further optimizing the structure of the R&D team. Major R&D projects include biodegradable PHB materials, low warpage ultra-high-heat HIPS materials, and more. Multiple projects have already entered mass production, laying a foundation for the company’s long-term competitiveness.

Cash Flow Performance Analysis

Operating Cash Flow Grows Steadily

Net cash flow from operating activities was RMB 567.48 million, up 2.64% year over year. Cash inflow from operating activities was RMB 22.197 billion, up 6.94% year over year. This is broadly aligned with the operating revenue growth rate, and the company’s ability to collect payments remains stable.

Investment Cash Flow Outflow Pressure Eases

Net cash flow from investing activities was RMB -495.19 million, versus RMB -941.54 million last year. This improved by 47.41% year over year, mainly because the amount of cash paid for investments in the current period dropped significantly. Expenditures on purchasing fixed assets, intangible assets, and others were RMB 568 million, up 42.82% year over year, and the company still maintained a relatively high level of capital expenditure intensity.

Financing Cash Flow Contracts Sharply

Net cash flow from financing activities was RMB 123.27 million, versus RMB 659.55 million last year. It fell by 81.31% year over year. This is mainly due to a decrease in net cash received from obtaining borrowings. At the same time, cash paid to repay debt was RMB 4.049 billion, up 15.21% year over year, and the debt structure continued to be optimized.

Risk Factor Disclosures

2. Risk of Management for Expansion of Operating Scale: As the company’s operating scale continues to expand, higher requirements are placed on subsidiary management, new business team building, and technology R&D investment. If management capabilities cannot be enhanced in step, it may affect operational efficiency.
3. Risk of Fluctuations in Raw Material Prices: Prices of basic chemical raw materials fluctuate significantly, influenced by crude oil prices. If raw material prices rise too quickly, it will directly push up production costs and squeeze profit margins.
4. Information Technology Construction Risk: As the company accelerates upgrades to information technology and digitalization, if the system’s fit with the operating and management model is insufficient, it may affect production and operational efficiency.
5. Risk of Exchange Rate Fluctuations: Overseas orders are increasing year by year. Changes in exchange rates may cause fluctuations in profitability, especially for major settlement currencies such as the U.S. dollar and the euro.

Compensation of Directors, Supervisors, and Senior Management

The Chairman and General Manager, Wang Aiguo, reported total pre-tax remuneration received from the company during the reporting period of RMB 1.236 million; Deputy General Manager Han Bo’s pre-tax remuneration was RMB 0.8098 million; Financial Controller and Deputy General Manager Yu Cuibo’s pre-tax remuneration was RMB 0.8001 million; Board Secretary and Deputy General Manager Yu Yu’s pre-tax remuneration was RMB 0.612 million. Overall, the compensation level is broadly consistent with comparable companies in the industry and is linked to the company’s performance growth.

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