Lingyi iTech 2025 Annual Report Analysis: Net profit increased by 30.34%, financial expenses surged by 1272.48%

Key Financial Data Interpretation

Operating Revenue: Up 16.20% Year over Year; New Business Drives Growth Engine

In 2025, the company achieved operating revenue of 51.429 billion yuan, up 16.20% year over year. Judging by the business mix, AI hardware-related businesses generated revenue of approximately 44.793 billion yuan, up 9.84% year over year; the automotive and low-altitude economy business generated revenue of 2.954 billion yuan, up 39.56% year over year, becoming an important driver of revenue growth. By region, overseas sales were 37.767 billion yuan, up 18.95% year over year, while domestic sales were 13.662 billion yuan, up 9.20% year over year—performance in overseas markets was even more impressive.

Net Profit: Attributable Net Profit Up 30.34%; Profitability Improves Significantly

In 2025, the company’s net profit attributable to shareholders of listed companies was 2.288 billion yuan, up 30.34% year over year. The growth rate far exceeded that of operating revenue, indicating a significant improvement in the company’s profitability. Non-recurring profit and loss adjusted (non-NII) net profit was 1.747 billion yuan, up 7.41% year over year. The growth rate after excluding non-recurring items was lower than attributable net profit, mainly because non-recurring items contributed more significantly, including investment income of 178 million yuan and fair value change gains and losses of 134 million yuan.

Earnings Per Share: Basic EPS 0.33 Yuan; Up 32.00% Year over Year

Basic earnings per share (EPS) was 0.33 yuan/share, up 32.00% year over year; non-NII EPS was 0.24 yuan/share, up 2.08% year over year. The EPS growth rate was higher than the net profit growth rate, mainly because the company repurchased shares, reducing the total number of shares outstanding.

Deep-Dive Analysis of Expense Structure

Total Expenses: Up 45.67% Year over Year; Finance Expenses Become the Biggest Variable

In 2025, the company’s total expenses (selling expenses + administrative expenses + finance expenses + R&D expenses) totaled 5.216 billion yuan, up 45.67% year over year. The expense growth rate was significantly higher than the operating revenue growth rate, creating some pressure on the profit side.

Selling Expenses: Growth Slows; Early Signs of Improved Cost Control

Selling expenses were 399 million yuan, up 8.43% year over year. The growth rate was lower than the operating revenue growth rate. The selling expense ratio was 0.78%, down 0.06 percentage points year over year, showing that the company’s cost control on the sales side has started to take effect.

Administrative Expenses: Up 32.02% YoY; Employee Compensation Is the Main Cause

Administrative expenses were 1.870 billion yuan, up 32.02% year over year, mainly due to an increase in employee compensation during the period. The administrative expense ratio was 3.64%, up 0.39 percentage points year over year. As the company’s scale expands, administrative costs have increased somewhat.

Finance Expenses: Surge of 1272.48% YoY; Exchange Losses Are the Biggest Drag

Finance expenses were 566 million yuan, up dramatically 1272.48% year over year, mainly due to increased exchange losses resulting from FX rate changes during the period. The company has a relatively high share of overseas sales; FX fluctuations have a significant impact on finance expenses. The company should pay attention to the subsequent FX trend and the effectiveness of its hedging and risk management measures.

R&D Expenses: Up 19.65% YoY; Continuing to Build New Track(s)

R&D expenses were 2.382 billion yuan, up 19.65% year over year. R&D spending accounted for 4.63% of operating revenue, up 0.12 percentage points year over year. The company continues to increase R&D investment in new businesses such as AI hardware, automotive, and the low-altitude economy, laying a foundation for future growth.

Profile of R&D Personnel

The number of R&D personnel was 7,935, up 24.63% year over year. R&D personnel accounted for 7.90% of total staff, up 0.43 percentage points year over year. In terms of educational background, there were 2,817 R&D personnel with a bachelor’s degree or above, up 55.65% year over year. Among them, there were 225 master’s degree holders and 12 PhD holders, up 38.89% and 33.33% respectively year over year, indicating that the education level of the R&D team continues to improve. In terms of age structure, there were 3,574 R&D personnel aged 30–40, up 30.72% year over year; R&D personnel aged 40 and above were 1,125, up 54.11% year over year, meaning the R&D team has richer experience.

Cash Flow Performance Analysis

Overall Cash Flow: Net Decrease of 591 million Yuan in Cash and Cash Equivalents

In 2025, the company recorded a net decrease of 591 million yuan in cash and cash equivalents, down 118.85% year over year. This was mainly due to a sharp increase in cash outflows from investing activities.

Operating Cash Flow: Net Amount Up 10.40%; Cash-Building Capacity Stable

Net cash flow from operating activities was 4.433 billion yuan, up 10.40% year over year. The ratio of operating cash flow to net profit was 1.94, indicating that the company’s profit quality is relatively high and its cash-building capacity remains stable.

Investing Cash Flow: Net Amount Declines Sharply; Expansion Pace Accelerates

Net cash flow from investing activities was -8.199 billion yuan, down 120.62% year over year. This was mainly due to an increase in cash paid during the period for purchasing long-term assets, acquiring subsidiaries, and purchasing wealth management products. This shows that the company’s expansion pace is accelerating and it is increasing investment in new businesses and production capacity.

Financing Cash Flow: Net Amount Up 18.58%; Financing Scale Expands

Net cash flow from financing activities was 3.238 billion yuan, up 18.58% year over year, mainly because the bank financing amount increased during the period. By expanding its financing scale, the company meets its investment and operating needs.

Potential Risks Ahead

Risk of Industry Volatility

Downstream AI hardware, automotive, and low-altitude economy industries are highly affected by factors such as technology cycles and changes in market demand. If the industry experiences volatility, it may adversely affect the company’s performance. The company needs to continuously strengthen technological innovation, optimize its product mix, and reduce risks arising from industry fluctuations.

Risk of FX Rate Volatility

Since the company has a high proportion of overseas sales, FX fluctuations may increase exchange losses and affect the company’s profits. The company should further improve its hedging strategies to reduce the impact of FX volatility on its performance.

Risk in Internationalized Management

As the company accelerates its international expansion, differences in culture, laws, and policies across countries may pose challenges for management. The company needs to strengthen the development of international management teams, improve its global operating system, and enhance cross-regional management capabilities.

Risk of Intensifying Industry Competition

Competition in industries such as AI hardware, automotive, and the low-altitude economy is fierce. If the company cannot continuously enhance its product competitiveness, its market share may decline. The company needs to increase R&D investment, improve the technical content of its products, and consolidate its market position.

Risk of Investment and M&A Integration

The company lays out new businesses through investment and acquisitions. If the integration results fall short of expectations, it may affect the company’s performance. The company needs to strengthen post-merger integration management, achieve resource synergy, and improve the profitability of the acquired targets.

Compensation of the Core Management Team

Chairman’s Pre-Tax Compensation: 7.1727 million Yuan

Chairman Zeng Fangqin’s total pre-tax compensation received from the company during the reporting period was 7.1727 million yuan. The compensation level aligns with the company’s performance growth and industry standing.

General Manager’s Pre-Tax Compensation: 7.1727 million Yuan

The general manager is concurrently appointed by chairman Zeng Fangqin, and the total pre-tax compensation during the reporting period is also 7.1727 million yuan.

Deputy General Manager’s Pre-Tax Compensation: 2.6036 million Yuan

Deputy general manager Guo Rui’s total pre-tax compensation received from the company during the reporting period was 2.6036 million yuan.

Chief Financial Officer’s Pre-Tax Compensation: 2.2728 million Yuan

Chief financial officer Wang Tao’s total pre-tax compensation received from the company during the reporting period was 2.2728 million yuan.

Overall, the company’s management compensation is linked to the company’s performance. The compensation for the core management team is at a reasonable level within the industry, which helps attract and retain excellent management talent.

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