Hongfa Co., Ltd. releases 2025 annual report: core product gross profit margin declines, Q4 net profit plunges by 20%

Reporter|Chen Qing Editor|Yang Yi

On the evening of April 1, after Huafeng Co., Ltd. (SH600885, share price 28.15 yuan, market cap 43.57B yuan) — a leading relay manufacturer — released its 2025 annual report, it showed that the company is a leading enterprise in China’s relay industry, with a global market share ranked No. 1. In 2025, Huafeng Co., Ltd. achieved operating revenue of 17.2B yuan, up 21.98% year over year; it recorded net profit attributable to shareholders of the parent company of 1.76B yuan, up 7.76% year over year.

Behind Huafeng Co., Ltd.’s seemingly impressive performance, however, the relay product that serves as the company’s “anchor” saw its profitability decline in 2025.

The financial report shows: In 2025, Huafeng Co., Ltd.’s core relay products generated revenue of 15.7B yuan, accounting for more than 90% of the company’s total revenue, but its gross margin was only 35.66%, down 2.33 percentage points year over year. As a reporter learned from The Economic Daily News, this may be related to changes in the company’s raw material costs.

According to publicly available information, the main raw materials for Huafeng Co., Ltd.’s relay products include copper, silver, enamel-coated wire, engineering plastics, and more. Huafeng Co., Ltd. has previously stated that the prices of the company’s main raw materials are affected by fluctuations in international commodity markets; fluctuations in raw material market prices directly affect product profits and the company’s working capital.

A reporter from The Economic Daily News learned that in 2025, both copper prices and silver prices experienced significant increases, drawing investor attention. Regarding the impact of rising raw material costs on the company’s gross margin, in late October 2025, Huafeng Co., Ltd. responded on an investor relations interaction platform that relay products have a relatively strong scale effect. In the first three quarters of 2025, the company’s overall business scale achieved solid growth, offsetting in some degree the impact of part of the materials price increases. In addition, the company has also been continuously optimizing its products, and by proactively working with customers, it achieves cost reduction.

However, judging from the 2025 annual report released by the company, Huafeng Co., Ltd.’s profitability does not appear to have improved significantly. The financial report shows that in the fourth quarter of 2025, Huafeng Co., Ltd.’s net profit attributable to shareholders fell 20.42% year over year, and declined 43.09% quarter over quarter.

In addition, regarding accounts receivable: as of the end of 2025, Huafeng Co., Ltd.’s accounts receivable reached 4.14B yuan, up about 26.69% from 3.27B yuan at the end of the previous year.

Regarding the above issues, on the evening of April 1, a reporter from The Economic Daily News called Huafeng Co., Ltd., but the phone call could not be connected.

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Responsible editor: Song Yafang