Bethel's 2025 Annual Report Analysis: Net Investing Cash Flow Decreased by 431.90%, Net Financing Cash Flow Increased by 603.58%

Revenue Interpretation

In 2025, the company generated operating revenue of RMB 12.014 billion, a year-on-year increase of 20.91%. The scale of revenue continued to expand. In terms of business structure, revenue from smart electronic control products was RMB 5.855 billion, up 29.26% year on year, with a gross margin of 20.40%, up 0.42 percentage points year on year, becoming the core driver of revenue growth. Revenue from mechanical braking products was RMB 5.170 billion, up 16.21% year on year, but the gross margin was 15.87%, down 2.70 percentage points year on year. Revenue from mechanical steering products was RMB 0.574 billion, up only 2.59% year on year, with a gross margin of 10.18%, down 1.53 percentage points year on year.

From the regional structure perspective, domestic revenue was RMB 10.2964 billion, up 20.40% year on year, with a gross margin of 17.61%, up 0.47 percentage points year on year. Overseas revenue was RMB 1.414 billion, up 29.17% year on year, but the gross margin was 19.75%, sharply down 12.12 percentage points year on year, placing pressure on profitability in overseas operations.

Net Profit Interpretation

In 2025, the company’s net profit attributable to shareholders of listed companies was RMB 1.309 billion, up 8.32% year on year. The growth rate of net profit was lower than that of revenue, mainly due to factors such as rising costs and increased expenses. Non-recurring items adjusted net profit (excluding non-recurring gains and losses) was RMB 1.220 billion, up 9.63% year on year, slightly higher than the net profit growth rate, indicating that non-recurring gains and losses to some extent weighed on the growth of net profit.

Non-Recurring Items Adjusted Net Profit Interpretation

Non-recurring items adjusted net profit (excluding non-recurring gains and losses) was RMB 1.220 billion, up 9.63% year on year. This was mainly driven by the rapid growth of smart electronic control products and the improvement in gross margin, as well as the expansion of the company’s overall revenue scale. However, the gross margins of mechanical braking and mechanical steering products declined, which to a certain extent limited the growth magnitude of non-recurring items adjusted net profit.

Basic Earnings Per Share (EPS) Interpretation

Basic EPS was RMB 2.16 per share, up 8.54% year on year, basically matching the net profit growth rate. Due to the company reducing its total share capital by 35,000 shares through share repurchases, there was a slight positive impact on EPS.

Non-Recurring Items Adjusted EPS Interpretation

Non-recurring items adjusted EPS was RMB 2.01 per share, up 9.24% year on year, slightly higher than the growth rate of basic EPS. This is consistent with the trend that non-recurring items adjusted net profit growth exceeded net profit growth, reflecting that the stability of the company’s core business profit growth is relatively good.

Expense Interpretation

In 2025, the company’s total period expenses were RMB 977.732 million, up 18.02% year on year. The growth rate of expenses was lower than the growth rate of revenue. Overall expense control effects were acceptable, but the growth rates of various expense items showed clear divergence.

Selling Expense Interpretation

Selling expenses were RMB 60.2948 million, surging 51.16% year on year. This was mainly due to increases in market expansion expenses and rental expenses. The company accelerated the expansion of overseas markets. In 2025, it added international customers such as Renault in France and Ford Europe, leading to increased market expansion spending. Meanwhile, to meet needs related to capacity expansion and market layout, expenses for leasing factory premises, office spaces, and related facilities increased.

Administrative Expense Interpretation

Administrative expenses were RMB 30.3076 million, up 27.73% year on year. This was mainly due to increases in compensation for management personnel and travel expenses. As the company expanded its business scale, the number of management personnel increased, driving a corresponding rise in payroll expenses. At the same time, business expansion in both domestic and international markets led to higher travel frequency by management personnel, increasing travel expense spending.

Finance Expense Interpretation

Finance expenses were RMB 8.2911 million, turning from negative to positive year on year, with a substantial increase of 112.33%. This was mainly due to increases in interest expense and foreign exchange losses. In 2025, the company issued RMB 2.8 billion convertible corporate bonds, increasing interest expense. In addition, exchange rate fluctuations in currencies such as the U.S. dollar and euro led to higher foreign exchange losses, while interest income decreased somewhat due to changes in the capital structure.

R&D Expense Interpretation

R&D expenses were RMB 60.5497 million, up 5.21% year on year. The growth rate was relatively low, but R&D investment continued to increase. The company focused on core intelligent chassis technologies, completed the release of the B-sample stage for WCBS1.6, 2.1, and the domestically-produced-supply方案 WCBS2.2, advanced the EMB product production project completion, and steadily implemented R&D projects.

R&D Personnel Situation Interpretation

As of the end of 2025, the company had 1,535 R&D personnel, accounting for 24% of the company’s total headcount. In terms of educational background, there were 6 doctoral postgraduates, 214 master’s postgraduates, 1,157 undergraduates, 110 junior college graduates, and 48 high school or below. R&D personnel with an undergraduate degree or above accounted for 90.94%, indicating that the overall quality of the R&D team is high. In terms of age structure, there were 917 people under 30, accounting for 59.74%; 432 people aged 30–40, accounting for 28.15%. The R&D team showed a clear trend toward younger staffing, with strong innovation vitality.

Cash Flow Interpretation

In 2025, the net increase in cash and cash equivalents was -RMB 299 million, decreasing by RMB 134.3128 million year on year, indicating that the cash flow situation faced pressure. Net cash flow from operating activities declined year on year. Cash flow from investing activities saw a large outflow, while cash flow from financing activities saw a large inflow. The company is in an expansion period, with strong demand for funds.

Interpretation of Net Cash Flow from Operating Activities

Net cash flow from operating activities was RMB 0.867 billion, down 18.04% year on year. This was mainly due to changes in the company’s revenue scale during the period and increases in cost and expense spending. On one hand, while revenue grew, accounts receivable increased, and operating receivable items decreased by -RMB 1.012 billion, leading to increased capital occupation. On the other hand, inventory increased by RMB 0.399 billion, and operating payable items increased by RMB 0.639 billion. This partially offset the pressure from capital occupation, but overall the company’s cash generation ability from operating activities declined somewhat.

Interpretation of Net Cash Flow from Investing Activities

Net cash flow from investing activities was -RMB 3.7564 billion, sharply down 431.90% year on year, mainly due to an increase in investment expenditures during the period. In 2025, the company intensified its capacity expansion plans and paid RMB 785 million for the purchase/construction of fixed assets and intangible assets, up RMB 52.6237 million year on year. Meanwhile, it paid RMB 4.639 billion for external investments, up 40.88% year on year, including establishing industrial funds, joint ventures, and similar initiatives, accelerating the strategic layout of core robotic components, as well as overseas capacity construction such as the Mexico factory.

Interpretation of Net Cash Flow from Financing Activities

Net cash flow from financing activities was RMB 2.596 billion, up 603.58% year on year, mainly due to an increase in financing income during the period. In 2025, the company successfully issued RMB 2.8 billion convertible corporate bonds, obtaining RMB 790 million in borrowings. At the same time, it received RMB 449 million in cash from restricted stock. Financing channels were diversified, providing ample funding support for capacity expansion and strategic deployment.

Interpretation of Potential Risks

2. Industry fluctuation risk: The company’s business is highly related to the automotive industry, which has a strong cyclical nature. If the macroeconomy declines and consumers’ willingness to purchase vehicles decreases, it will lead to reduced sales volumes of the company’s products, adversely affecting operations.
3. Risk of relatively concentrated customers: During the reporting period, the company’s customer concentration was relatively high. The sales revenue of the top five customers accounted for 73.40% of the company’s total annual sales. Among them, sales to related parties accounted for 38.45%. If the cooperation relationship with core customers changes and the number of orders decreases, it will significantly affect the company’s profitability.
4. Risk of raw material price fluctuations: Direct materials account for 80.98% of the cost of principal business. Fluctuations in the prices of raw materials such as steel, pig iron, and aluminum ingots can have a substantial impact on production costs. If raw material prices rise significantly while product prices remain relatively stable, it will directly compress the company’s profit margins.
5. Risk of technological upgrades: As electrification and intelligentization trends accelerate in the automotive industry, if the company does not upgrade its technology in a timely and sustained manner, and new product development lags, it will not be able to meet market demand and will weaken core competitiveness.
6. Risk of bad debts in accounts receivable: The company’s accounts receivable book value of original amount was RMB 4.030 billion. Although the company’s main customers are large passenger-vehicle manufacturers with good credit records, if customers’ financial conditions deteriorate, the risk of bad debts in accounts receivable will increase.
7. Risk of declining gross margin: Price reduction pressure on OEMs is transmitted upstream to component suppliers. If the company cannot absorb the pricing pressure through cost control and product upgrades, it will face the risk of a decline in gross margin.
8. Quality responsibility risk: The company’s products are core safety components for automobiles. If quality incidents or product recalls occur due to design or manufacturing defects, the company will bear compensation liability, facing the risk of major economic losses and reputational damage.
9. Risk of geopolitical issues and international trade policy: The company is advancing a globalized capacity layout. Risks arising from changes in geopolitics and trade policies may affect the construction of the factories in Mexico and Morocco. If agreements such as the USMCA are renegotiated, or the U.S. imposes additional tariffs, it will affect overseas project investment returns and production supply arrangements.

Interpretation of the Total Pre-Tax Compensation Received from the Company During the Reporting Period by the Chairman

During the reporting period, the total pre-tax compensation received from the company by Chairman Yuan Yongbin was RMB 1.795 million, slightly higher than RMB 1.780 million in 2024, and basically matched the company’s performance growth.

Interpretation of the Total Pre-Tax Compensation Received from the Company During the Reporting Period by the General Manager

The general manager is concurrently served by Chairman Yuan Yongbin. The total pre-tax compensation includes that of the chairman, amounting to RMB 1.795 million.

Interpretation of the Total Pre-Tax Compensation Received from the Company During the Reporting Period by the Vice General Managers

Vice general manager Yang Dongwei’s total pre-tax compensation during the reporting period was RMB 1.6694 million. Vice general manager Cai Chun’s total pre-tax compensation was RMB 0.8115 million. Yang Dongwei’s compensation was higher mainly because he is responsible for important business segments of the company and made a larger contribution to the company’s performance during his tenure; Cai Chun’s compensation fluctuated due to taking an extended leave for family reasons.

Interpretation of the Total Pre-Tax Compensation Received from the Company During the Reporting Period by the Chief Financial Officer

The chief financial officer, Wang Xiaojie, had total pre-tax compensation during the reporting period of RMB 0.5210 million, up from RMB 0.4980 million in 2024, reflecting the company’s emphasis on financial work and the effectiveness of the chief financial officer’s fulfillment of duties.

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