Shandong Molong's 2025 revenue is expected to grow by 30%, with a net profit of 5.16 million yuan, turning a profit year-on-year, and overseas revenue surging by 50% | Financial Report Insights

Shandong Molong Petroleum Machinery Co., Ltd. achieved an operational turnaround in 2025. After years of consecutive losses, it recorded positive net profit for the first time, with overseas markets becoming the core engine driving the rebound in performance.

According to the annual report, in 2025 the company’s net profit attributable to shareholders was RMB 5.1556 million, successfully reversing the situation of a RMB 43.70 million loss in 2024. Revenue was RMB 1.762 billion, up 29.88% year over year. Net cash flow from operating activities surged 630.85% year over year to RMB 321 million.

It is worth noting that even after deducting non-recurring gains and losses, net profit still stood at -RMB 27.6225 million, indicating that the profitability of the company’s core business has not yet fully returned to the right track. Given that the distributable profits are negative at both the consolidated financial statements and at the parent company level, the company announced that it will not distribute profits for 2025.

The overseas strategy has worked; revenue scale expands by leaps and bounds

Overseas markets are the most important driver of the year’s improvement in performance. The company has vigorously advanced its overseas strategy, and the year-over-year growth of revenue in foreign markets was approximately 50%, significantly higher than the company’s overall revenue growth rate.

The company’s main business centers on pipe-related products, including oil tubing, casing, pipeline pipe, boiler tube, hydraulic stanchion pipe, gas cylinder pipe, shipbuilding pipes, and nuclear power plant pipes, etc. These products together account for more than 90% of operating revenue.

The company adopts a “make to order based on sales” model. During the reporting period, it had sufficient product orders; both production and sales volumes increased significantly year over year, and capacity utilization improved further.

The company’s gross margin on products increased significantly year over year. Combined with the ongoing deepening of cost control, the company’s profitability improved markedly. The company said it achieves internal cost reduction and efficiency gains through lean management measures, comprehensively improving operating efficiency and market competitiveness.

There are concerns about the quality of profitability; core business repair is still under way

Although net profit turned positive, the sustainability of its earnings still carries a certain degree of uncertainty. The company’s net profit after deducting non-recurring items was a loss of RMB 27.62 million, meaning that the turnaround to positive net profit mainly depended on contributions from non-recurring items. At the level of the main business, it is still in the stage of loss repair.

Judging from quarterly data, the distribution of profits is clearly uneven.

In the first and second quarters, net profit attributable to shareholders of listed companies was RMB 5.42 million and RMB 6.74 million, respectively; in the third and fourth quarters, it was a loss of RMB 6.73 million and RMB 2.75 million, respectively. Performance in the second half of the year faced significant pressure. Operating cash flow also showed similar fluctuations, with both the second and third quarters recording negative values.

There are unaddressed losses at the level of the parent company. This directly prevents the company from paying cash dividends to shareholders.

Asset scale expands; equity structure is concentrated

As of the end of 2025, the company’s total assets were RMB 2.682 billion, up 10.82% from the beginning of the year. Net assets attributable to shareholders of listed companies were RMB 498 million, up slightly by 1.14% from the beginning of the year.

Regarding the equity structure, Hong Kong Securities Clearing Agency Nominees Limited holds 32.08%, making it the largest shareholder. Shouguang Molong Holding Co., Ltd. holds 29.53%. Together, the two entities hold more than 60% of the shares, indicating a highly concentrated ownership structure.

Of the 236 million shares held by Shouguang Molong Holding, approximately 99.35 million shares are pledged.

The company’s stock is listed on both the Shenzhen Stock Exchange and the Hong Kong Stock Exchange. The company previously used the stock short name “ST Molong.” Now it has been restored to its normal short name, reflecting a phased improvement in its operating situation.

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