Hisense Visuals 2025 Annual Report Analysis: Net profit attributable to the parent company increased by 9.24%, operating cash flow increased by 27.43%

2026-04-01 01:49:08

Core Profitability Indicator Interpretation

Operating Revenue Slightly Down, Internal Structure Diverging

In 2025, the company achieved operating revenue of 57.679 billion yuan, down slightly by 1.45% year over year. By product category, smart display terminal revenue was 44.964 billion yuan, down 3.58% year over year, which is the main drag on revenue decline; revenue from the new display and new business was 8.458 billion yuan, up sharply by 24.92% year over year, becoming the core growth engine. Within this, businesses such as laser display, commercial displays, cloud services, and chips all achieved rapid expansion; other business revenue was 442 million yuan, down 14.07% year over year. By region, revenue from within China was 29.230 billion yuan, up 4.57% year over year, indicating relatively strong resilience in domestic market demand; revenue from overseas was 24.634 billion yuan, down 5.14% year over year, mainly affected by factors such as geopolitical risks abroad and exchange rate fluctuations.

Attributable Net Profit Grows Steadily, Profitability Improves

In 2025, the company recorded net profit attributable to shareholders of listed companies of 2.454 billion yuan, up 9.24% year over year; net profit excluding non-recurring items attributable to shareholders was 2.124 billion yuan, up 6.21% year over year, indicating high-quality earnings. The weighted average return on net assets was 12.11%, up 0.25 percentage points from the previous year, showing stronger shareholder return capability. The improvement in profitability is mainly driven by optimization of product mix, with the ongoing increase in the share of high-end large-screen products: the sales value share of 75+, 85+, 98+, and Mini LED products has continued to rise, supporting an increase in the brand price index. At the same time, cost management and control have been notably effective: operating costs declined 2.68% year over year, faster than the rate of revenue decline; gross margin rose 0.96 percentage points year over year to 16.70%.

Earnings Per Share Rise Steadily

In 2025, basic earnings per share were 1.888 yuan/share, up 10.02% year over year; earnings per share excluding non-recurring items were 1.438 yuan/share, up 4.05% year over year. The growth in EPS is basically aligned with the growth in net profit, reflecting that the company’s profit growth has been transmitted well to the shareholder level.

Expense Management and R&D Investment Interpretation

Optimization of Expense Structure, Evident Management and Control Effect

In 2025, total selling, general and administrative expenses and R&D expenses combined were 5.295 billion yuan, up 2.15% year over year, with the growth rate lower than the revenue growth rate, showing significant effects from expense management and control.

Selling expenses: up 12.79% year over year to 3.858 billion yuan, mainly due to an increase in marketing and promotion expenses, as the company strengthened brand marketing and market expansion efforts, especially in overseas markets by boosting brand influence through sports events, IP collaborations, and similar approaches.
Administrative expenses: down 2.86% year over year to 1.010 billion yuan, mainly due to the company promoting refined management, optimizing administrative processes, and reducing administrative costs.
Finance expenses: up 10.49% year over year to 58 million yuan, mainly due to increased FX exchange losses caused by exchange-rate fluctuations and increased interest expense.
R&D expenses: up 0.58% year over year to 2.388 billion yuan. The scale of R&D investment remained stable, accounting for 4.14% of operating revenue.

R&D Investment Focused on Core Technologies, Ample Talent Reserves

In 2025, the company’s total R&D investment was 2.389 billion yuan, including 2.388 billion yuan of R&D expenses expensed to the income statement and 0.01 billion yuan of R&D capitalized. The company focuses on core areas such as display technology, chip technology, and AI technology, and continues to advance technological innovation: in the display technology segment, RGB-Mini LED technology achieved breakthroughs and launched multiple high-end products; in the chip segment, the TCON chip business continued to grow, with a global market share of about 45%, and the share of the display TCON market increased to about 12%; in the AI technology segment, it completed iterative upgrades of voice wake-up recognition and standby wake-up functions, with the wake-up rate continuing to improve. Regarding R&D personnel, the company has 3,222 R&D staff members, accounting for 21.42% of the company’s total headcount. The education structure of R&D personnel has been optimized: 60 PhD candidates, 1,614 master’s degree holders, 1,323 bachelor’s degree holders, and 225 junior college or below; the proportion of high-education talent exceeds 80%. The age structure is reasonable: 1,584 R&D personnel aged 30–40, accounting for nearly 50%, forming the core force for R&D.

Cash Flow and Risk Analysis

Operating Cash Flow Jumps Significantly, Quality Improves

In 2025, net cash flow from operating activities was 4.583 billion yuan, up 27.43% year over year. The growth rate of operating cash flow far exceeded that of net profit, indicating a significant improvement in earnings quality. The main reasons are that the company strengthened management of accounts receivable: the days for turnover of accounts receivable were shortened; meanwhile, it optimized procurement payment policies, extending the days for turnover of accounts payable, enhancing the company’s cash flow creation capability.

Investment Cash Flow Turns from Positive to Negative, Laying Out for Long-Term Development

Net cash flow from investing activities was -1.893 billion yuan, compared with 0.36 billion yuan in the same period last year, mainly due to the company increasing efforts in fixed asset investment and financial asset investment. The company advanced projects such as the construction of the Vietnam factory and R&D and technology renovation at Qiangzhao Optoelectronics, while also increasing investments in financial assets such as bank wealth management products and trust products, laying out for long-term development.

Reduced Cash Outflow from Financing Activities, Alleviating Debt Servicing Pressure

Net cash flow from financing activities was -2.186 billion yuan, compared with -3.199 billion yuan in the same period last year. The cash outflow decreased, mainly because the company reduced the scale of debt financing and dividend payments. At the end of the period, the company had short-term borrowings of 744 million yuan and long-term borrowings of 149 million yuan, which helped ease debt-servicing pressure to some extent.

Key Risks Facing the Company

Risk of Uncertainty in International Trade: The global trade environment is increasingly affected by fluctuations in geopolitical conditions. The company’s share of overseas business is nearly 43%, and it faces risks such as upgrades to export tariff barriers and exchange rate fluctuations. The company addresses this by accelerating the construction of regional operation centers, strengthening localized procurement, and using foreign exchange hedging and preservation tools, but there is still some uncertainty.
Risk of Changes in Market Demand: As black home appliances are durable household appliances, domestic market demand has relatively weak intrinsic consumption momentum, and there is uncertainty regarding the recovery of end-market demand. Overseas market demand is also affected by the slowdown in economic growth. The company responds by deepening its global strategic layout, promoting product structure upgrades, and expanding into new businesses, but weak demand may adversely affect the company’s performance.
Risk of Intensified Competition from Technological Transformation: The AI technology revolution is driving a restructuring of industry value. The display industry is seeing accelerated technology iteration, and the company faces pressure to innovate technologically. The company responds by increasing R&D investment, focusing on core technologies, and promoting university-industry-research collaborations; however, if technological innovation lags, it may lead to a decline in product competitiveness.
Risk of Global Market Exchange Rate Fluctuations: With deeper internationalized development, the company’s overseas business involves settlement in multiple currencies. Exchange rate fluctuations may cause FX-related risks and increase financial costs. The company uses foreign exchange hedging tools to reduce risk, but uncertainty arising from exchange rate fluctuations may still affect the company’s profitability.

Interpretation of Executive Compensation

Chairman Yu Zhi tao did not receive compensation from the company

The total pre-tax compensation amount that Chairman Yu Zhitao received from the company during the reporting period was 0 yuan. His main compensation is paid by the controlling shareholder, Hisense Group Holding Co., Ltd.

President Li Wei Compensation 3.3988 million yuan

The total pre-tax compensation amount that President Li Wei received from the company during the reporting period was 3.3988 million yuan. The compensation structure includes basic salary, performance bonuses, and operating bonuses, which are linked to the company’s performance and the individual’s performance.

Vice President Li Minhua Compensation 2.0637 million yuan

The total pre-tax compensation amount that Vice President Li Minhua received from the company during the reporting period was 2.0637 million yuan, and her compensation level aligns with the company’s performance and her personal responsibilities.

Financial Officer Zheng Li fei Compensation 1.7368 million yuan

The total pre-tax compensation amount that Financial Officer Zheng Lifei received from the company during the reporting period was 1.7368 million yuan. The compensation structure includes basic salary and performance bonuses, which are linked to the effectiveness of the company’s financial management and control and the individual’s performance.

Board Secretary Fan Xiaop Compensation 1.0646 million yuan

The total pre-tax compensation amount that Board Secretary Fan Xiaop received from the company during the reporting period was 1.0646 million yuan, and his compensation level aligns with the effectiveness of work such as the company’s information disclosure and investor relations management.

Summary and Outlook

In 2025, Hisense Visuals achieved steady growth in profitability through measures such as product structure upgrades, expansion of new businesses, and expense management and control while facing external market pressure, with an improvement in the quality of operating cash flows. In the future, the company will continue to advance the “premiumization, large-screening, and smartization” strategy, increase the layout of new display and new businesses, and enhance its share in the global market. At the same time, it will strengthen technological innovation to respond to industry changes and market competition and achieve high-quality development. However, the company also needs to pay attention to risks such as international trade, changes in market demand, technological transformation, and exchange rate fluctuations, and take proactive measures to respond, ensuring the company’s continuous and stable development.

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