Sanchao New Materials (300554) 2025 Annual Report Brief Analysis: Net Profit Declined 12.86% Year-over-Year, Three Expenses Ratio Rose Significantly

According to publicly available data compiled by Securities Star, SanChao New Materials (300554) recently released its 2025 annual report. As of the end of this reporting period, the company’s total operating revenue was 228 million yuan, a decrease of 34.58% year-over-year, and net profit attributable to shareholders was -159 million yuan, down 12.86% year-over-year. Looking at quarterly data, in the fourth quarter, total operating revenue was 64.15 million yuan, down 9.31% year-over-year, and net profit attributable to shareholders was -140 million yuan, a decline of 48.19% year-over-year. During this reporting period, the proportion of three expenses (selling, general, and administrative expenses, and financial expenses) increased significantly, with the total of these expenses accounting for 50.84% of the total revenue.

These figures fell short of most analysts’ expectations, who previously anticipated a net profit of around 294 million yuan in 2025.

The financial data released in this report shows underwhelming performance. Specifically, gross profit margin was 21.8%, up 21.87% year-over-year; net profit margin was -69.0%, down 67.95% year-over-year; total selling, administrative, and financial expenses amounted to 62.49 million yuan, accounting for 27.38% of revenue, an increase of 50.84% year-over-year; net asset value per share was 4.37 yuan, a decrease of 24.17% year-over-year; operating cash flow per share was 0.22 yuan, up 123.4% year-over-year; and earnings per share were -1.39 yuan, down 12.86% year-over-year.

The explanations for significant changes in key financial items are as follows:

1. Sales expenses decreased by 7.21%, due to lower revenue leading to reduced sales staff salaries and entertainment expenses.
2. R&D expenses decreased by 36.32%, due to adjustments in actual R&D projects.
3. Fixed assets decreased by 27.73%, because some leased properties were reclassified as investment properties and some machinery and equipment impairment provisions were made.
4. Construction in progress increased by 294.05%, driven by increased investment in subsidiaries Jiangsu Sanjing Semiconductor Precision Manufacturing Equipment and Materials.

Securities Star’s valuation analysis tool indicates:

• Business Evaluation: Last year’s net profit margin was -69%, suggesting that after accounting for all costs, the company’s products or services have low added value. Historically, the median ROIC since listing is 5.05%, indicating average investment returns, with the worst year in 2025 at -20.61%, reflecting poor investment returns. The company’s historical financials are relatively average (note: the company has been listed for less than 10 years; the longer the listing, the more meaningful the financial averages). Over 8 annual reports since listing, there have been 3 years of losses, indicating a relatively fragile business model.

• Business Breakdown: Over the past three years (2023/2024/2025), net return on net operating assets was 3.5% / – / --; net operating profit was 23.66 million / -143 million / -157 million yuan; net operating assets were 668 million / 607 million / 463 million yuan.

  Over the same period, working capital to revenue ratios were 0.37 / 0.47 / 0.55, with working capital (funds invested by the company in its operations) at 177 million / 164 million / 126 million yuan, and revenue at 481 million / 349 million / 228 million yuan.

The financial health check indicates:

1. Attention should be paid to the company’s cash flow status (average operating cash flow over the past 3 years and current liabilities are only 2.72%).
2. Attention should be paid to financial expenses (financial expenses as a percentage of average operating cash flow over the past 3 years have reached 93.53%).

The above content is compiled by Securities Star based on publicly available information, generated by AI algorithms (NetTrust Backup 310104345710301240019), and does not constitute investment advice.