China National Heavy Duty Truck Group 2025 Annual Report Analysis: Operating Cash Flow Plummets by 89.34%, R&D Staff Decrease by Nearly 20%

Core Profitability Indicator Interpretation

Operating Revenue: Up 28.51% year over year; the Accessories Business is the Main Growth Driver

In 2025, the company achieved operating revenue of 57.737 billion yuan, up 28.51% from 44.929 billion yuan in 2024. By product, revenue from full-vehicle sales was 44.610 billion yuan, up 24.14% year over year; revenue from parts sales was 13.022 billion yuan, surging 46.20% year over year, becoming the core driver of revenue growth, while leasing income fell 17.07% year over year.

Net Profit and Non-GAAP Net Profit: Both Rise, but Growth Rates Diverge

Net profit attributable to shareholders of listed companies was 1.666 billion yuan, up 12.58%; non-GAAP net profit was 1.558 billion yuan, up 17.43%. The growth rate of non-GAAP net profit was higher than that of net profit, indicating stronger profitability resilience in the company’s core business, while the contribution of non-recurring gains and losses to net profit has weakened somewhat.

Earnings per Share: Growing in Step with Profitability

Basic earnings per share were 1.42 yuan per share, up 11.81% year over year. Non-GAAP earnings per share were 1.33 yuan per share, up about 17.43%, consistent with the growth trend of net profit and non-GAAP net profit, reflecting that the improvement in the company’s profitability is directly transmitted to the earnings-per-share level.

Fee Structure Analysis

Selling Expenses: Up 12.37%, Matching Revenue Growth with Volume Growth

In 2025, selling expenses were 422.18 million yuan, up 12.37% year over year, mainly because the rise in the company’s sales volume drove an increase in staff compensation. Full-year sales volume of heavy trucks was 1.739 million units, up 30.77% year over year. The growth rate of selling expenses was lower than that of sales volume, indicating improved sales efficiency.

Administrative Expenses: Slight Increase of 0.50%; Strong Management Effect

Administrative expenses were 329.29 million yuan, up only 0.50% year over year. Against the backdrop of a large increase in revenue, administrative expenses were nearly flat, showing effective control over management costs and further optimization of the expense structure.

Financial Expenses: Negative Growth Expands; Interest Income Contribution Increases

Financial expenses were -268.0 million yuan, down 6.34% year over year, mainly due to an increase in interest income from cash deposits during the year. Specifically, interest income was 280.0 million yuan, up 6.46% from 263.0 million yuan in 2024. Interest expense was only 5.3354 million yuan, further expanding the positive contribution of financial expenses to profit.

R&D Expenses: Up 12.60%, Ongoing Investment in Technology Upgrades

R&D expenses were 900.136 million yuan, up 12.60% year over year, mainly used for the development of new products such as tractor units, dump trucks, and cargo trucks, as well as for technological upgrades. The company continues to invest in areas such as intelligent driving and new-energy heavy trucks. During the reporting period, sales volume of new-energy heavy trucks reached 17.9 thousand units, up significantly year over year, and the effectiveness of R&D investment has gradually become apparent.

R&D Personnel Profile: Headcount Down by Nearly 20%; Structure Optimized Significantly

In 2025, the number of R&D personnel was 496, down from 616 in 2024, a decrease of 19.48%. The proportion of R&D personnel fell from 9.48% to 7.39%. However, the personnel structure was significantly optimized: the number of master’s degree R&D personnel increased from 54 to 97, a year-over-year surge of 79.63%; the number of R&D personnel under 30 years old increased from 170 to 265, up 55.88% year over year. The trend toward a younger R&D team and higher educational attainment is evident, which is beneficial for the company’s long-term development of technological innovation.

Cash Flow: Operating Cash Flow Drops Sharply; Investing Cash Flow Outflows Surge

Cash Flow from Operating Activities: Down 89.34%; Dual Pressure from Receivables Collection and Procurement

Net cash flow from operating activities was 563.05 million yuan, down 89.34% year over year from 5.277 billion yuan in 2024. This was mainly because during the reporting period, increased cash collection through bills contributed more, while cash paid for purchasing goods and receiving services increased as well. As a result, cash inflow from operations only grew by 2.20%, whereas cash outflow from operations surged by 15.96%, significantly increasing pressure on operating cash flow.

Cash Flow from Investing Activities: Net Outflow Doubles; Increased Outlays for Investments Like Wealth Management

Net cash flow from investing activities was -8.173 billion yuan, with net outflow widening by 114.28% year over year from -3.8142 billion yuan in 2024, mainly due to an increase in investment outlays such as wealth management products. During the reporting period, cash outflow from investing activities was 14.402 billion yuan, up 41.01% year over year, far exceeding the slight decline in cash inflow from investments, as the company stepped up its external investment and deployment.

Cash Flow from Financing Activities: Net Outflow Increases by 27.61%; Higher Dividend Payments

Net cash flow from financing activities was -1.453 billion yuan, with net outflow increasing by 27.61% year over year from -1.1383 billion yuan in 2024, mainly due to an increase in the distribution of dividends. During the reporting period, cash outflow from financing activities was 1.454 billion yuan, up 25.38% year over year. Of this, dividends paid by subsidiaries to minority shareholders were 613 million yuan, up significantly year over year.

Risk Warning

Risk of Industry Cyclical Fluctuations

The heavy-duty truck industry is highly affected by factors such as the macroeconomic environment, infrastructure investment, and logistics demand. If, in the future, China’s domestic economic growth slows down, infrastructure investment falls short of expectations, or demand declines after the withdrawal of policies for upgrading old vehicles, the company’s production and sales volumes and profitability may face downward pressure.

Risk of Intensifying Competition in the New-Energy Business

In 2025, China’s sales volume of new-energy heavy trucks surged 192% year over year, and competition in the industry is becoming increasingly fierce. If the company cannot continue to advance technology upgrades for its new-energy products and cost control, it may lose market share in competition and affect profitability in the new-energy business.

Risk of Cash Flow Pressure

Operating cash flow declined significantly, while investment outlays continued to increase. If subsequent receivables collection does not improve or financing channels are constrained, the company’s tight cash flow situation may worsen, limiting day-to-day operations and project investment.

Executive Compensation

The chairman, Liu Hongyong, received a total pre-tax remuneration of 494,500 yuan from the company during the reporting period. The general manager, Zhao Hai, received a total pre-tax remuneration of 625,600 yuan. The chief financial officer, Bi Yanxun, received a total pre-tax remuneration of 652,200 yuan. The compensation of the three core executives is basically consistent with the company’s performance growth, reflecting an incentive mechanism that links compensation with performance.

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