Gaocao Co., Ltd. | 2025 Annual Report Review: The company's performance inflection point has emerged, with overseas photovoltaic and robotics businesses opening new growth opportunities

（Source: A New Perspective on Advanced Manufacturing）

【Dongwu Machinery】Zhou Ershuang 13915521100 / Li Wenyi 18867136239 / Wei Yijie / Qian Yaotian / Huang Rui / Tan Yixin 17851090557 / Tao Ze

Investment rating: Buy (maintained)

1  In 2025, performance came under pressure due to industry effects; the Q4 performance inflection point has already appeared

In 2025, the company achieved revenue of RMB 3.65B, down -18.43% year over year. This was mainly driven by the overall downturn of the photovoltaic industry chain. Specifically, revenue from photovoltaic wafer cutting equipment was RMB 242 million, down -88.04% year over year, accounting for 6.63%; wafer slicing contract manufacturing revenue was RMB 1.86B, up +43.85% year over year, accounting for 51.02%; revenue from diamond wire was RMB 798 million, up +15.12% year over year, accounting for 21.86%; revenue from innovation and other businesses was RMB 290 million, up +18.22% year over year, accounting for 7.94%. In 2025, the company’s net profit attributable to shareholders was -RMB 41 million, with the year-over-year loss narrowing. In Q4 2025, single-quarter revenue was RMB 1.22B, up +16.92% year over year and +11.63% quarter over quarter; net profit attributable to shareholders was RMB 41 million, turning loss into profit year over year, and up +493.46% quarter over quarter.

2  Full-year profitability faced overall pressure; the Q4 inflection point has already appeared

In 2025, gross margin was 14.35%, down -4.63 percentage points year over year; net sales profit margin was -1.11%, down -0.12 percentage points year over year. The period expense ratio was 16.59%, down -1.30 percentage points year over year. Among them, sales expense ratio was 2.02%, down -0.14 percentage points; administrative expense ratio was 7.53%, down -1.75 percentage points; R&D expense ratio was 5.17%, down -0.38 percentage points; and financial expense ratio was 1.87%, up +0.97 percentage points. In Q4 2025, single-quarter gross margin was 18.27%, up +12.32 percentage points year over year and +4.54 percentage points quarter over quarter; net sales profit margin was 3.37%, up +27.3% year over year and +2.66 percentage points quarter over quarter.

3  Contract liabilities/inventory moved in reverse; year-over-year cash outflows increased

As of end-2025, the company’s contract liabilities were RMB 113 million, down -50.98% year over year; inventories were RMB 1.03B, up +56.61% year over year. Net cash flow from operating activities in 2025 was -RMB 328 million, down -73.99% year over year. This was mainly due to the photovoltaic industry chain impact: the company reduced procurement payments.

4  The “anti-overheating” effect in PV has started to show results; overseas demand has resumed an upward recovery curve

（1）Domestic: The “anti-overheating” trend at the PV manufacturing end is established. As the policy side strengthens governance of disorderly competition, photovoltaic wafer prices have entered a rebound channel. The company’s wafer slicing contract manufacturing business has become a revenue pillar, benefiting from industry recovery. As the wafer segment enters a buyer’s market, the company is expected to build low-cost barriers through deep R&D in a single segment and scale effects, benefiting during industry clearing. (2) Overseas: Within the past three years, Tesla has built 100GW of photovoltaic capacity on the ground and in Space, respectively. As a leading wafer cutting equipment provider, the company is expected to benefit fully.

5  Entering the robot blue-ocean market; core technology opens up new space

Relying on its core technological accumulation in grinding equipment and tungsten wire materials, the company has actively deployed in the humanoid robot blue-ocean market, achieving breakthrough in orders and product implementation. (1) From grinding technology to lead-screw grinding machines: the planetary roller screw is a core component of the linear actuator for humanoid robots, while grinding machines are the key equipment for its production and manufacturing. With Tesla Optimus entering small-batch mass production in 2025, upstream equipment demand is expected to be released first. Relying on its solid grinding technology foundation, the company can quickly complete the R&D of external/internal thread grinding machine prototypes, and is expected to seize an advantage in the early stage of industry breakout. (2) From diamond wire tungsten to tendon-rope mechanisms for dexterous hands: tendon-driven actuation is one of the mainstream technical solution for enabling precise operations of a robot dexterous hand. Compared with conventional polyethylene materials, a tungsten wire dexterous hand tendon rope has stronger load-bearing capacity and anti-creep performance, which can provide the dexterous hand with more stable operating capability. Currently, the company has completed product R&D and entered trial use with leading customers, achieving a breakthrough in small-batch orders.

Earnings forecast and investment rating

Considering the order-to-revenue recognition schedule, we adjust our forecast for the company’s net profit attributable to shareholders for 2026–2027 to RMB 150 million (original value: 130 million) / RMB 210 million (original value: 240 million). We expect net profit attributable to shareholders in 2028 to be RMB 250 million. Based on the current market value, the corresponding PE multiples are 74/51/43 times, respectively. We maintain the “Buy” rating.

Risk warning

Photovoltaic industry demand falls short of expectations; R&D of new technologies falls short of expectations; industrialization of new businesses falls short of expectations.

Dongwu Machinery team

Dongwu Machinery research team honors

2024 New Fortune Best Analyst, machinery industry, 4th place

2024 Wind Gold Analyst, machinery industry, 1st place

2023 New Fortune Best Analyst, machinery industry, 4th place

2023 Wind Gold Analyst, machinery industry, 1st place

2022 New Fortune Best Analyst, machinery industry, 3rd place

2022 Wind Gold Analyst, machinery industry, 2nd place

2021 New Fortune Best Analyst, machinery industry, 3rd place

2021 Wind Gold Analyst, machinery industry, 1st place

2020 New Fortune Best Analyst, machinery industry, 3rd place

2020 Sell-side Analyst Crystal Ball Award, machinery industry, 5th place

2019 New Fortune Best Analyst, machinery industry, 3rd place

2017 New Fortune Best Analyst, machinery industry, 2nd place

2017 NiuNiu Award Best Analyst, high-end equipment industry, 2nd place

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