Zhongtian Rocket plans to recognize 100 million yuan in impairment losses in 2025. Can the veteran aerospace engineer turn the tide and reverse the unfavorable situation?

21st Century Business Herald reporter Ling Chen

In 2025, Zhongtian Rocket (003009.SZ) entered a highly dramatic turning point.

This annual report, interwoven with losses amounting to hundreds of millions of yuan, asset impairments exceeding 100 million yuan, and a major reshuffle of the core management team, reveals the truth behind how this aerospace-listed company “changed its financial face” and carried out strategic transformation under pressure from multiple cycles.

Over the past three years, Zhongtian Rocket’s profits have declined for three consecutive years: from parent-company attributable net profit of 96.01 million yuan in 2023, and 19.57 million yuan in 2024, to a cliff-like drop to -102 million yuan in 2025. In addition, the high impairment provisions are also a key reason for the losses.

On one hand, the weather modification business (hereinafter referred to as the weather influence business) continues to strengthen, and the cumulative bid-winning scale in the national debt projects reached 340 million yuan, hitting a historic high.

On the other hand, core businesses such as carbon/carbon heat field materials have been hit by the harsh cold of industry cycles, leading to declining profitability and a year-on-year contraction in revenue scale.

Against the backdrop of performance pressure for three consecutive years, Zhongtian Rocket pressed the “fast-forward key” for personnel reform. Cheng Hao, who has a deep background in supercode technology and experience with the Fourth Academy of Aerospace, took over as the new leader, supported by a practical team with a “research + capital” dual presence.

With the new management team formally taking office, whether Zhongtian Rocket can leverage its aerospace technology foundation to overcome the photovoltaic cycle, and turn “resilience in production output” into “profitability on financial statements,” has become the key factor determining how its future valuation can be reshaped.

Performance Dive

On March 30, Zhongtian Rocket disclosed its 2025 financial results, presenting an extremely contrasting sense of “tearing”: on one side, the production side is firing on all cylinders and market share is stable; on the other, the financial statements show eye-catching losses.

During the reporting period, the company achieved operating revenue of 783 million yuan, down 15.32% year-on-year. The most striking figure is that parent-company attributable net profit recorded a loss of 102 million yuan, a year-on-year decline of as much as 620.65%.

By drilling into the financial report, it can be found that this “plunge” in performance was not caused entirely by a collapse of operating businesses, but rather stemmed from a heavy set of provisions.

Zhongtian Rocket stated that, based on the prudence principle, it made an asset impairment provision of 92.09 million yuan and a credit impairment loss of 12.27 million yuan. Combined, these two items reduced profit by 104 million yuan, strongly offsetting the profit space for the whole year.

What is worth noting is that although net profit is mired in trouble, since the impairments are “non-cash costs,” they did not lead to any real cash outflow. The company’s net cash flow from operating activities still remains positive.

From the product structure perspective, Zhongtian Rocket’s rain enhancement and hail suppression rockets and supporting equipment grew by 39.87% year-on-year, accounting for more than 50% of revenue.

Meanwhile, the “growth pole” that had been highly expected—carbon/carbon heat field materials—saw a sharp year-on-year decline of -41.87%. At the same time, military small solid rockets fell by 54.04% year-on-year. These two businesses together account for more than 30% of revenue and have become important factors dragging down performance.

In addition, intelligent weighing systems and measurement-and-control system integration have almost come to a standstill, down 90.82% year-on-year. However, since this segment accounts for less than 1% of revenue, it is difficult to affect changes in the overall financial landscape.

Zhongtian Rocket’s current situation is a typical case of manufacturing capability rising while pressure on the financial statements moves downward.

On the production side, the company still maintains strong delivery capability. Specifically, the weather influence rockets produced 88,000 rounds, up 42%; various pyrotechnic elements produced 45,000 units, up 71%; and launch pads produced 1,200 units, up 226%. The output of core products significantly exceeded the expected targets.

This resilience on the production side sharply contrasts with the decline on the sales side, reflecting changes in pricing power in downstream markets, longer customer settlement cycles, or inventory pressure caused by industry overcapacity.

Pain of the Cycle

Under the dual squeeze of the downward photovoltaic cycle and setbacks in emerging businesses, a top-down “major reshuffle” of the core management team has become the company’s last card to try to turn things around.

In the awkward situation where traditional business can’t go it alone, the multi-point strategy implemented by Zhongtian Rocket in recent years is facing unprecedented tests of survival. Facing three consecutive years of performance decline, Zhongtian Rocket pressed the “fast-forward key” on personnel reform in 2025.

Cheng Hao, who has a deep background in the Fourth Academy of Aerospace, officially took on the role of chairman. It is worth mentioning that Cheng Hao had long served in charge of the subsidiary ChaoMa Technology, which is precisely the core operating entity for heat field materials and heat-resistant/ablative components. This appointment appears to precisely point to the strategic intention of “getting up from where one fell,” aiming to reverse the downturn by deeply restructuring core assets.

The subsequent selection and appointment of the general manager leaned toward a “practical combat” style. The newly appointed general manager, Li Huainian, has more than 30 years of experience in scientific research management, while vice president Ning Xinghua has extensive accumulation in asset management and capital operations.

This new team, composed of “aerospace system veterans,” faces a business operation challenge of great difficulty.

First is inventory reduction and cost efficiency. Against the background of the photovoltaic heat field materials industry cycle impact, it remains to be seen how the new management team can leverage past experience to quickly optimize process routes, digest inventory, and stop the “bleeding points.”

Second is rebalancing the business structure. Although the bid amount for the weather influence business reached a new high of 340 million yuan, its ceiling is visible. Whether the new team can leverage its deep aerospace system resources to open new growth poles for high-value products such as military small rockets will determine whether Zhongtian Rocket can reshape investors’ long-term confidence.

For Zhongtian Rocket, the “major reshuffle” of personnel is only the prelude. Whether it can achieve a second coupling of technology and the market during this cycle’s winter is the “touchstone” for testing the true quality of the newly appointed management.

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