Eagle Eye Warning: Shandong Expressway sales gross profit margin is quite volatile

Sina Finance Listed Companies Research Institute | Earnings Hawk-Eye Early Warning

On April 3, Shandong Expressway Co., Ltd. released its 2025 annual report.

The report shows that the company’s operating revenue for the full year of 2025 was 23.93B yuan, down 16.03% year over year; net profit attributable to shareholders was 3.21B yuan, up 0.3% year over year; non-GAAP net profit attributable to shareholders was 3.02B yuan, up 3.71% year over year; basic earnings per share were 0.545 yuan per share.

Since it went public in March 2002, the company has conducted cash dividends 23 times, with cumulative cash dividends implemented totaling 4.01B yuan.

The Listed Companies Earnings Hawk-Eye Early Warning System analyzes Shandong Expressway’s 2025 annual report via intelligent quantitative assessment across four major dimensions: performance quality, profitability, capital pressure and safety, and operating efficiency.

I. Performance Quality

During the reporting period, the company’s operating revenue was 26.55B yuan, down 16.03% year over year; net profit was 26.55B yuan, down 0.93% year over year; net cash flow from operating activities was 28.49B yuan, up 2.3% year over year.

From an overall performance perspective, key items to focus on include:

• Ongoing decline in operating revenue growth rate. In the last three annual reports, the year-over-year changes in operating revenue were 18.62%, 7.34%, and -16.03%, respectively, with the downward trend continuing.

From the matching of revenue, costs, and period expenses, key items to focus on include:

• A divergence between operating revenue and taxes and surcharges. During the reporting period, operating revenue’s year-over-year change was -16.03%, while taxes and surcharges’ year-over-year change was 8.77%, indicating a divergence between operating revenue and taxes and surcharges.

II. Profitability

During the reporting period, the company’s gross margin was 32.99%, up 26.6% year over year; net profit margin was 16.78%, up 17.99% year over year; and return on net assets (weighted) was 8.2%, down 8.38% year over year.

Combining the company’s operations, key items to focus on include:

• Gross margin on sales is subject to significant fluctuations. In the last three annual reports, gross margins on sales were 30.38%, 26.06%, and 32.99%, with year-over-year changes of -7.98%, -14.23%, and 26.6%, respectively, indicating abnormal fluctuations in gross margin on sales.

• Gross margin on sales increased, while inventory turnover declined. During the reporting period, the gross margin on sales increased from 26.06% in the prior-year period to 32.99%, and inventory turnover declined from 23.11 times in the prior-year period to 18.03 times.

• Gross margin on sales increased, while accounts receivable turnover declined. During the reporting period, the gross margin on sales increased from 26.06% in the prior-year period to 32.99%, while accounts receivable turnover declined from 9.23 times in the prior-year period to 7.78 times.

From the asset side, key items to focus on include:

• Continuous decline in return on net assets. In the last three annual reports, the weighted average return on net assets was 9.3%, 8.95%, and 8.2%, respectively, with the downward trend continuing.

• Return on invested capital is below 7%. During the reporting period, the company’s return on invested capital was 5.23%, and the average value across the three reporting periods was below 7%.

From unusual gains and losses, key items to focus on include:

• Unusual gains account for a high proportion. During the reporting period, the ratio of unusual gains to net profit was 49%. (Note: Unusual gains = net investment gains + net gains from fair value changes + non-operating income + losses from disposal of non-current assets).

III. Capital Pressure and Safety

During the reporting period, the company’s asset-liability ratio was 63.83%, down 1.14% year over year; the current ratio was 0.65, and the quick ratio was 0.63; total debt was 12.85B yuan, of which short-term debt was 136.47 billion yuan, and short-term debt as a proportion of total debt was 19.22%.

From the perspective of short-term capital pressure, key items to focus on include:

• The ratio of short-term to long-term debt continues to rise. In the last three annual reports, the ratio of short-term debt to long-term debt was 0.14, 0.16, and 0.22, respectively, showing a continuing upward trend.

• Large short-term debt and a shortage gap in existing funds. During the reporting period, broad money funds were 2.99B yuan, while short-term debt was 730M yuan; broad money funds / short-term debt was 0.73, meaning broad money funds are below short-term debt.

• The cash ratio is less than 0.25. During the reporting period, the cash ratio was 0.12, which is below 0.25.

• The cash ratio continues to decline. In the last three annual reports, the cash ratio was 0.15, 0.13, and 0.12, respectively, showing a continuing decline.

• The ratio of net cash flow from operating activities to current liabilities continues to decline. In the last three annual reports, this ratio was 0.19, 0.18, and 0.17, respectively, continuing to decrease.

From the perspective of capital management, key items to focus on include:

• The ratio of total debt to total liabilities is greater than 20%, and the ratio of interest expense to net profit is greater than 30%. During the reporting period, the ratio of total debt to total liabilities was 67.72%, and the proportion of interest expense to net profit was 51.35%, indicating that interest expense has a significant impact on the company’s operating performance.

• Prepaid accounts show large changes. During the reporting period, prepaid accounts were 7.3 billion yuan, with a change rate of 45.89% compared with the beginning of the period.

• The ratio of prepaid accounts to current assets continues to increase. In the last three annual reports, the ratio of prepaid accounts to current assets was 1.55%, 2.07%, and 2.76%, respectively, continuing to rise.

• The growth rate of prepaid accounts is higher than the growth rate of operating costs. During the reporting period, prepaid accounts increased 45.89% compared with the beginning of the period, while operating costs increased -23.91% year over year; the growth rate of prepaid accounts is higher than that of operating costs.

• Accounts payable bills show large changes. During the reporting period, accounts payable bills were 8 billion yuan, with a change rate of 44.96% compared with the beginning of the period.

From the perspective of capital coordination, key items to focus on include:

• The pressure from short-term debt continues to rise, and financing channels are tightening. In the last three annual reports, the ratio of long-term and short-term debt was 0.14x, 0.16x, and 0.22x, respectively, continuing to grow, while net cash flow from financing activities was 23.3 billion yuan, -7.4 billion yuan, and -49.3 billion yuan, respectively, continuing to decline.

IV. Operating Efficiency

During the reporting period, the company’s accounts receivable turnover was 7.78, down 15.69% year over year; inventory turnover was 18.03, down 22% year over year; and total asset turnover was 0.15, down 18.99% year over year.

From operating assets, key items to focus on include:

• Inventory turnover declines significantly. During the reporting period, inventory turnover was 18.03, down significantly by 22% year over year.

From long-term assets, key items to focus on include:

• Unit fixed-asset income value declines year by year. In the last three annual reports, the ratio of operating revenue to original value of fixed assets was 2.33, 2.1, and 1.88, respectively, continuing to decline.

• Construction in progress changes are large. During the reporting period, construction in progress was 1.06B yuan, up 61.98% from the beginning of the period.

Click Shandong Expressway’s Hawk-Eye Early Warning to view the latest warning details and a visual financial report preview.

Introduction to Sina Finance Listed Companies Earnings Hawk-Eye Early Warning: The Listed Companies Earnings Hawk-Eye Early Warning is a specialized intelligent analysis system for listed companies’ financial reports. By bringing together a large number of authoritative financial experts such as accounting firms and listed companies, the Hawk-Eye Early Warning tracks and interprets listed companies’ latest financial reports across multiple dimensions—including company performance growth, earnings quality, capital pressure and safety, and operating efficiency—and highlights potentially existing financial risk points in a combination of text and visuals. It provides professional, efficient, and convenient technical solutions for financial risk identification and early warning for financial institutions, listed companies, regulatory departments, and others.

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Editor: Xiao Lang Express