Longyuan Power (001289) 2025 Annual Report Summary: Net Profit Decreased by 28.78% Year-over-Year

According to financial data publicly compiled by Securities Star, in the recent period, Longyuan Power (001289) released its 2025 annual report. Based on the financial statements, Longyuan Power’s net profit fell 28.78% year over year. As of the end of this reporting period, the company’s total operating revenue was 30.253 billion yuan, down 18.6% year over year, and net profit attributable to shareholders was 4.526 billion yuan, down 28.78% year over year. Judging by quarterly data, in the fourth quarter total operating revenue was 8.032 billion yuan, down 22.0% year over year, and net profit attributable to shareholders in the fourth quarter was 133 million yuan, down 83.18% year over year.

The data is below expectations from most analysts. Previously, analysts generally expected that the company’s 2025 net profit would be around 6.77 billion yuan.

The performance of various data indicators disclosed in this earnings report is not satisfactory. Among them, the gross margin was 34.79%, down 7.33% year over year; the net profit margin was 18.14%, down 18.74% year over year; selling expenses, administrative expenses, and financial expenses totaled 3.957 billion yuan; the three-fee ratio to revenue was 13.08%, up 22.17% year over year; net assets per share were 8.97 yuan, up 2.26% year over year; operating cash flow per share was 2.61 yuan, up 27.61% year over year; earnings per share were 0.54 yuan, down 28.25% year over year.

Explanations in the financial statements for financial items with large changes are as follows:

1. The R&D expense change in magnitude was -30.76%. Reason: the number of in-house R&D projects in progress decreased during the period, and outsourced technical service fees also declined.
2. The net change in cash flow from operating activities had a magnitude of 27.61%. Reason: (1) the receipt of renewable energy electricity fee subsidies during the year increased significantly compared with the same period of the prior year; (2) in the second half of 2024, the company disposed of its affiliated thermal power companies, so this year there is no longer operating cash flow from a thermal power segment; (3) the related expenses paid this year and fees collected on behalf of others decreased year over year.
3. The net change in cash flow from financing activities had a magnitude of -89.63%. Reason: the net amount of borrowings during the year decreased by a larger margin than in the prior year.
4. The change in cash and cash equivalents had a magnitude of -34.8%. Reason: the purchase and construction of fixed assets, intangible assets, and other long-term assets during the period had an impact.
5. The change in short-term borrowings had a magnitude of -42.2%. Reason: the renewable energy subsidy receipts during the period were good; the company’s operating cash flow improved; and to optimize the debt structure, repayment of some short-term borrowings affected the figures.
6. The change in long-term borrowings had a magnitude of -20.5%. Reason: at period end, the amount of long-term borrowings reclassified to long-term borrowings due within 1 year increased in accordance with the repayment plan set out in the borrowing contracts.

The Securities Star Price Investing Circle financial report analysis tool shows:

• Business Assessment: Last year’s ROIC of the company was 3.94%, indicating a weak return on capital. However, last year’s net profit margin was 18.14%; considering all costs, the company’s products or services have a high added value. Based on historical annual report data statistics, the company’s median ROIC since listing was 5.46%, with investment returns generally average. Among the worst years, 2025’s ROIC was 3.94%, with average investment returns. The company’s historical financial reports are relatively solid (Note: the company has been listed for less than 10 years; the longer the listing period, the greater the reference value of the financial averages.).

• Debt-Paying Ability: The company’s interest-bearing liabilities are not insignificant compared with its current profit level.

• Business Model: The company’s performance mainly relies on capital expenditure-driven factors; it is also necessary to focus on whether the company’s capital expenditure projects are worth it and whether capital spending is inflexible and faces funding pressure. This type of driving force needs to be studied carefully to understand the actual situation behind it.

• Breaking Down the Business: Over the past three years (2023/2024/2025), the net operating asset return on net operating assets was 4.2%/4.6%/3.3%, respectively; net operating profits were 6.505 billion/7.602 billion/5.488 billion yuan, respectively; and net operating assets were 156.145 billion/163.889 billion/163.861 billion yuan, respectively.

  Over the past three years (2023/2024/2025), the company’s working capital/revenue (i.e., the capital the business needs to front for each 1 yuan of revenue generated in production and operations) was -0.44/-0.47/-0.46, respectively. Of that, working capital (the money the company itself pays out during production and operations) was -16.877 billion/-17.382 billion/-14.059 billion yuan, respectively, and revenue was 38.052 billion/37.164 billion/30.253 billion yuan, respectively.

The Financial Report Health Check tool shows:

1. It is recommended to pay attention to the company’s cash flow situation (cash and cash equivalents/current liabilities are only 3.48%).
2. It is recommended to pay attention to the company’s debt situation (interest-bearing asset-liability ratio has reached 48.79%).

The above content is compiled by Securities Star based on publicly available information and generated by an AI algorithm (filing number for network information computation and record 310104345710301240019), and does not constitute investment advice.