Lushou Observation | Qingdao Yunlu Shares Experience "Double Drop" in First Listing, Dividend Ratio Rises Against the Trend Amid Performance Pressure

On the evening of March 30, Qingdao Yunlu Advanced Materials Technology Co., Ltd. (688190.SH, hereinafter referred to as “Yunlu Co.”) disclosed its 2025 annual report.

Data show that in 2025, the company achieved operating revenue of RMB 1.89 billion, a slight year-on-year decrease of 0.56%; net profit attributable to shareholders of RMB 294 million, down 18.45% year on year; and net profit after deducting non-recurring items of RMB 281 million, down 18.27% year on year.

Meanwhile, the company released its 2025 profit distribution plan. According to the plan, the company intends to distribute a cash dividend of RMB 6 per 10 shares to all shareholders (inclusive of tax), for a total distribution of RMB 72 million. Combined with the RMB 36 million cash distributed in the 2025 interim period and the RMB 60 million distributed in the first three quarters, the total cash dividends for the full year will be RMB 168 million, accounting for 57.07% of the company’s net profit attributable to shareholders for the year.

Image source: Yunlu Co. official website

Sales are rising, but gross margin is falling; profit room is narrowing

According to disclosures in the annual report, while Yunlu Co.’s main product sales volume all increased year over year in 2025, operating profit declined from the same period of the previous year due to the decline in product gross margin.

As a high-tech enterprise focused on three major materials—amorphous alloy, nanocrystalline alloy, and magnetic powder—and their products, Yunlu Co.’s products are widely used in cutting-edge fields such as power distribution, new-energy vehicles, 5G new infrastructure, and more.

In terms of business structure, amorphous alloy thin strip and its products remain the company’s primary source of revenue. The annual report shows that in 2025, this segment generated revenue of RMB 1.38B, accounting for 72.92% of operating revenue, down slightly by 2.94% year over year. Revenue from nanocrystalline products was RMB 350 million, up 14.66% year over year, with its revenue share increasing to 18.53%. Revenue from magnetic powder and its products was RMB 144 million, up 1.95% year over year.

As for gross margin, in 2025 the company’s overall gross margin was 27.74%, down 2.84 percentage points from the same period last year. By product, gross margin for amorphous alloy thin strip and its products was 36.31%; for nanocrystalline products it was 7.67%, which has been partially restored from the previous year; and for magnetic powder and its products it was -5.44%.

Screenshot of the annual report

In its performance bulletin, Yunlu Co. said that, in the face of multiple factors such as global macroeconomic conditions and intensified industry market competition, the company actively took various response measures to fully consolidate and stabilize its market share.

Regarding expenses, in 2025 the company’s period expenses were RMB 195 million, up RMB 6.44M year over year; the period expense ratio was 10.32%, up 0.4 percentage points from the same period last year. Among them, finance costs changed from -RMB 6.67M in the same period of the previous year to RMB 2.51M, mainly due to a decrease in interest income. Research and development expenses were RMB 119 million, up 4.15% year over year, accounting for 6.27% of operating revenue.

Operating cash flow declines; accounts receivable ratio rises

The annual report shows that in 2025, the company’s net cash flow generated from operating activities was RMB 31.1151 million, sharply down 78.4% year over year. In the same period, net profit was RMB 294 million, and the ratio of net operating cash flow to net profit was 0.11.

According to statistics from Sina Finance’s listed company research institute’s financial report “Eagle Eye” early-warning system, from 2023 to 2025, Yunlu Co.’s net cash flow from operating activities was RMB 219 million, RMB 144 million, and RMB 31.1151 million, respectively; the ratios of net operating cash flow to net profit were 0.66, 0.4, and 0.11, respectively—declining for three consecutive years.

Screenshot of the annual report

As for accounts receivable, as of the end of 2025, the company’s accounts receivable had a book balance of RMB 626 million. After provisioning for bad debt of RMB 32.7M, the book value was RMB 593 million. The proportion of accounts receivable to operating revenue increased from 24.97% in 2023 to 29.36% in 2024, and further to 31.38% in 2025—rising for three consecutive years.

As for inventories, as of the end of 2025, the company’s inventory book value was RMB 247 million, an increase of RMB 122 million from the end of the previous year, representing a growth rate of 96.73%. This increase far exceeds the changes in revenue and operating costs over the same period.

In terms of operating efficiency indicators, in 2025 the company’s accounts receivable turnover ratio was 3.28 times, down 13.56% year over year; inventory turnover was 7.32 times, down 26.56% year over year; and total asset turnover was 0.58 times, down 10.2% year over year.

With performance under pressure, the dividend payout ratio exceeds 50%

According to the profit distribution plan, the company’s total cash dividend for 2025 was RMB 168 million, accounting for 57.07% of net profit attributable to shareholders.

Screenshot of the annual report

From the perspective of the equity structure, the controlling shareholder is China Aero-Engine Asset Management Co., Ltd., holding 28.5%; the second-largest shareholder is Li Xiaoyu, Chairman and General Manager, holding 20.82%; the third-largest shareholder is Guo Keyun, Vice Chairman, holding 16.5887%.

According to publicly available information, on June 17, 2025, Li Xiaoyu, Chairman and General Manager, was placed under custody measures by the Jilin Municipal Supervisory Commission in Jilin Province. In the company’s third-quarter report, it noted, “The company’s person in charge, the person in charge of accounting matters, and the person in charge of the accounting organization (the person in charge of accounting) ensure that the financial information in the quarterly report is true, accurate, and complete.” On February 8, 2026, the company announced that Li Xiaoyu had been released from the custody measures and had resumed normal duties.

In addition, according to the reduction in holdings results disclosed on February 14, 2026, Vice Chairman Guo Keyun reduced his holdings by a total of 3.5997 million shares, accounting for 3% of the company’s total share capital, through centralized bidding and block trades, due to “personal capital needs.” The total amount of the reduction was approximately RMB 352 million. After the reduction, Guo Keyun’s shareholding proportion was 16.5887%, and he remains the company’s third-largest shareholder.

Against this backdrop, the company rolled out its 2025 profit distribution proposal. Under the proposal, Li Xiaoyu and Guo Keyun—both shareholders with higher shareholdings—will participate in this dividend distribution.

Given the 2025 operating situation of “rising sales but falling profits,” how the company will balance market share and profitability capacity, and how it will improve the quality of cash flow going forward, are the key issues the market will focus on subsequently.

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