Taili Technology 2025 Annual Report Analysis: Net profit down 29.88% year-over-year; net cash flow from investing activities plummeted by 2162.32%

Operating Revenue: Steady Growth Overall; Exports Drive Performance

In 2025, Tailee Science and Technology recorded operating revenue of RMB 1.044 billion, up 2.36% year over year, maintaining a generally steady growth momentum. By business segment, the company’s three main core businesses show divergent performance: its Health Home Living business, as the baseline, generated revenue of RMB 886 million, down 2.34% year over year; its High-Performance Protective business became a bright spot, with revenue of RMB 104 million, up 75.38% year over year; and its Outdoor and Emergency Equipment business recorded revenue of RMB 43.41 million, up 7.27% year over year.

By region, domestic sales revenue was RMB 622 million, down 10.35% year over year, while export revenue was RMB 422 million, up 29.37% year over year, becoming the core driver of the company’s revenue growth. In terms of sales model, revenue from online channels was RMB 853 million, up 3.33% year over year, with its share rising to 81.73%; revenue from offline channels was RMB 191 million, down 1.77% year over year.

Net Profit: Down Sharply YoY; Periodic Investment Pressures Performance

In 2025, the company’s net profit attributable to shareholders of listed companies was RMB 61.45 million, down 29.88% year over year; its non-recurring profit and loss (non-GAAP) net profit was RMB 56.21 million, down 34.39% year over year, with a clear deterioration in profitability. The company stated that the decline in net profit was mainly driven by multiple phased factors: (1) the contraction of the e-commerce traffic dividend, with customer acquisition and lead-generation costs for the C-end continuing to rise; (2) accelerating the layout of its B-end business and increasing investment in exhibition halls in key cities nationwide; and (3) increased R&D investment in the emerging High-Performance Protective business. R&D expenses grew 7.56% year over year, but related businesses have not yet generated substantial revenue contributions, creating a period mismatch between the investment phase and the return phase.

Looking at profitability indicators, basic earnings per share were RMB 0.63 per share, down 41.67% year over year; non-recurring profit and loss (non-GAAP) earnings per share were RMB 0.58 per share, down 45.71% year over year, with profitability indicators under broad pressure.

Expenses: Slight Overall Increase; Ongoing R&D Investment

In 2025, the company’s total period expenses were RMB 507 million, up 2.12% year over year, and remained stable overall. Of which:

• Selling expenses: RMB 383 million, up 7.01% year over year, mainly because e-commerce costs increased to RMB 316 million, up 7.75% year over year, reflecting rising customer acquisition costs in the company’s online channels.
• Administrative expenses: RMB 90.68 million, down 1.98% year over year; through refined management, the company achieved a slight reduction in expenses.
• Financial expenses: RMB -2.11 million, up 43.77% year over year, mainly due to increased foreign exchange losses caused by a decline in the USD exchange rate. At the same time, interest income rose significantly by 36.22% year over year to RMB 66.97 million.
• R&D expenses: RMB 35.40 million, up 7.56% year over year. The company continued to increase R&D investment in areas such as high-performance protection and new materials. It added 19 new R&D projects and brought in multiple senior R&D talents. As a result, R&D expenses as a percentage of operating revenue increased to 3.39%.

R&D Personnel: Stable Team; Higher Proportion of Master’s and PhD Holders

As of the end of 2025, the company had 157 R&D personnel, up 2.61% year over year, accounting for 13.42% of total employees. The R&D team remained stable. In terms of educational background, there were 19 master’s-level R&D personnel, up 90.00% year over year; there was 1 PhD-level R&D personnel. The proportion of master’s and PhD personnel in the R&D team increased from 6.54% in the prior year to 12.74%, and the educational structure of the R&D team continued to improve, providing talent support for the company’s technological innovation.

Cash Flow: Operating Cash Flow Steady; Investing Cash Flow Fluctuates Sharply

In 2025, the company’s cash flow showed a split pattern:

• Net cash flow from operating activities: RMB 81.07 million, down 9.39% year over year. Although it declined, it still remained a positive inflow, showing that the company’s main business cash-generating ability remained solid.
• Net cash flow from investing activities: RMB -540.75 million, down 2162.32% year over year, mainly due to an increase in purchases of wealth management products to RMB 1.042 billion during the period, up 60.84% year over year. Meanwhile, cash paid for purchasing/building fixed assets, intangible assets, and other long-term assets increased significantly.
• Net cash flow from financing activities: RMB 461.71 million, up 1538.05% year over year, mainly because the company received RMB 402 million of proceeds from fundraising upon listing, and added RMB 114 million of new bank borrowings, significantly strengthening its financing capacity.

Potential Risks: Five Key Risks Need Attention

Risk of Industrialization of New Materials

New materials face challenges such as unproven process maturity, excessively high costs, and low market acceptance when moving from the laboratory to large-scale production. If the industrialization process is hindered, it will affect the company’s market expansion and revenue growth. The company will respond by strengthening process validation, implementing refined cost control, and increasing market promotion.

Risk of Exchange Rate Fluctuation

Overseas revenue accounts for 40.42% of the company’s total, and is mainly settled in USD. Fluctuations in the RMB exchange rate will affect foreign exchange gains and losses and operating performance. The company will reduce risk through foreign exchange hedging, shortening the collection period, and adjusting the mix of settlement currencies.

Risk of Raw Material Price Volatility

The company’s main raw materials are plastic film and plastic pellets. Prices are highly affected by fluctuations in oil prices. If raw material prices continue to rise, it will squeeze the company’s profit margins. The company will respond through strategic reserves, optimizing product structure, improving pricing leverage, and establishing long-term cooperation with suppliers.

Risk of Ongoing Increases in E-commerce Platform Fees

Online revenue accounts for 81.73% of the company’s total. Rising e-commerce platform traffic costs will affect profitability levels. The company will strengthen its B-end deployment, enhance refined operations, and build a brand moat to reduce reliance on online traffic.

Risk of R&D and Commercialization Not Meeting Expectations

The company’s R&D in emerging areas such as robot protection and commercial aerospace coatings involves uncertainty. If R&D fails or the commercialization timeline is slow, it will affect the company’s future growth. The company will reduce risk by strictly controlling R&D processes and promoting joint customer validation.

Compensation for Senior Executives: Stable Pay for Core Management

In 2025, compensation for the company’s core senior executives remained stable:

• Chairman Shi Zhengbing: The total pre-tax remuneration received from the company during the reporting period was RMB 0.6527 million, consistent with the company’s declining performance trend, and compensation was adjusted.
• General Manager Shi Zhengbing (also serving as Chairman): The total pre-tax remuneration was also RMB 0.6527 million.
• Deputy General Manager Liao Jiang: The total pre-tax remuneration was RMB 0.5632 million.
• Deputy General Manager Rao Zhiming: The total pre-tax remuneration was RMB 0.4927 million.
• CFO Nie Qin: The total pre-tax remuneration was RMB 0.3460 million.

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Responsible editor: Xiao Lang Express