Shu Dian Co., Ltd. (002463) 2025 Annual Report Brief Analysis: Revenue and net profit both increased year-over-year, accounts receivable rose

According to financial data compiled from publicly available information by Securities Star, Hubei DriLink Co., Ltd. (002463) has released its 2025 annual report. As of the end of this reporting period, the company’s total operating revenue was RMB 18.945 billion, up 42.0% year over year, and its net profit attributable to shareholders was RMB 3.822 billion, up 47.74% year over year. Based on single-quarter data, in Q4 total operating revenue was RMB 5.433 billion, up 25.45% year over year, while Q4 net profit attributable to shareholders was RMB 1.105 billion, up 49.52% year over year. In this reporting period, Hubei DriLink’s accounts receivable increased, with the year-over-year increase in accounts receivable reaching 36.2%.

These figures are below expectations from most analysts. Previously, analysts generally expected 2025 net profit to be around RMB 3.851 billion.

All key data indicators disclosed in this earnings report are performing well. Among them, gross margin was 35.48%, up 2.71% year over year; net profit margin was 20.16%, up 4.79% year over year. Selling, administrative, and finance expenses totaled RMB 0.883 billion; these three expenses as a proportion of revenue were 4.66%, up 22.7% year over year. Net assets per share were RMB 7.85, up 27.25%; operating cash flow per share was RMB 2.01, up 66.02%; earnings per share was RMB 1.99, up 47.05%.

Explanations in the financial statements for major changes in financial line items are as follows:

1. The selling expense change was 45.2%; reason: the company’s business scale expanded, and it increased R&D investment. The stock option incentive expenses introduced in 2024 have continued to be amortized.
2. The administrative expense change was 29.93%; reason: the company’s business scale expanded, and it increased R&D investment. The stock option incentive expenses introduced in 2024 have continued to be amortized.
3. The finance expense change was 62.7%; reason: during the reporting period, the RMB/USD exchange rate overall declined. With a relatively high proportion of exports, and a larger scale of foreign-currency monetary items, although the company has already mitigated exchange-rate risks by optimizing its foreign-currency structure and reasonably arranging foreign-currency receipts and payments, the year-over-year exchange differences still decreased significantly, shifting from gain to loss.
4. The R&D expense change was 44.5%; reason: the company’s business scale expanded, and it increased R&D investment. The stock option incentive expenses introduced in 2024 have continued to be amortized.
5. The net cash flow from operating activities change was 66.52%; reason: during the reporting period, the company’s business scale expanded and net profit increased.
6. The net cash flow from investing activities change was 12.51%; reason: during the reporting period, the amount of time-deposit investments purchased decreased.
7. The net cash flow from financing activities change was -393.93%; reason: during the reporting period, due to the acquisition of a controlling subsidiary, minority shareholders’ equity changed.
8. The change in cash and cash equivalents was 67.18%; reason: the company continued to be profitable, and the year-over-year increase in net cash flow from operating activities was approximately RMB 1.547 billion.
9. The accounts receivable change was 36.2%; reason: the company’s operating revenue increased, and accounts receivable increased accordingly.
10. The inventory change was 74.29%; reason: during the reporting period, business scale expanded, and inventories were held.
11. The change in non-current assets due within one year was 207.89%; reason: the time deposits due within one year increased at the end of the reporting period.
12. The change in long-term equity investments was 36.23%; reason: adjustments to changes in equity of associates accounted for using the equity method.
13. The change in fixed assets was 41.5%; reason: during the reporting period, construction in progress was converted into fixed assets of approximately RMB 2.304 billion. In addition, depreciation of approximately RMB 0.579 billion was accrued.
14. The change in construction in progress was 20.09%; reason: during the reporting period, the construction of the Huzhi Thailand plant and the company’s expansion and retrofit projects invested approximately RMB 2.7 billion, which was converted into fixed assets of approximately RMB 2.304 billion.
15. Reason for the change in right-of-use assets: new leases of factory premises were added during the reporting period.
16. The change in other non-current assets was -36.57%; reason: the time deposits due after one year decreased at the end of the reporting period.
17. The change in short-term borrowings was 31.15%; reason: at the end of the reporting period, outstanding RMB loans that were not yet due increased.
18. The change in accounts payable—bills was 50.78%; reason: at the end of the reporting period, the amount of bank acceptance bills not yet due paid to suppliers increased.
19. The change in accounts payable was 57.45%; reason: during the reporting period, business scale expanded, and the payments for raw materials and purchases payable increased.
20. The change in contract liabilities was 127.9%; reason: due to the expansion of revenue scale, advance payments from customers increased.
21. The change in long-term borrowings was 43.95%; reason: at the end of the reporting period, outstanding RMB long-term borrowings not yet due increased.
22. Reason for the change in lease liabilities: new leases of factory premises were added during the reporting period.

Securities Star’s price-to-earnings report analysis tool shows:

• Business assessment: The company’s ROIC last year was 21.24%, indicating an extremely strong return on capital. Last year’s net profit margin was 20.16%; after accounting for all costs, the added value of the company’s products or services is high. Based on statistics from historical annual report data, the company’s median ROIC over the past 10 years was 14.68%, and median investment returns were generally average. The worst year in that period was 2016, when ROIC was 3.93%, with investment returns generally average. The company’s historical financial reports appear quite strong; since it listed, it has had 15 annual reports, with only 1 loss-making year, which should be examined carefully to see whether there were any special reasons.

• Business breakdown: Over the past three years (2023/2024/2025), the return on net operating assets was 23.4%/30.4%/33.1%, and net operating profits were RMB 1.49 billion/RMB 2.566 billion/RMB 3.819 billion, while net operating assets were RMB 6.37 billion/RMB 8.434 billion/RMB 11.523 billion.

  In the past three years (2023/2024/2025), the company’s working capital/revenue (i.e., the amount of capital the company needs to advance in its production and operations for every RMB 1 of revenue generated) was 0.2/0.17/0.17 respectively. Of that working capital (money the company pays out for its own production and operations), the figures were RMB 1.813 billion/RMB 2.255 billion/RMB 3.156 billion, and revenue was RMB 8.938 billion/RMB 13.342 billion/RMB 18.945 billion.

The financial report health check tool shows:

1. Suggest paying attention to the company’s cash flow situation (cash and cash equivalents/current liabilities are only 51.29%)
2. Suggest paying attention to the company’s accounts receivable situation (accounts receivable/profit has reached 144.08%)

The analyst tool shows: Securities analysts generally expect that the company’s performance in 2026 will be RMB 5.745 billion, with the average earnings per share at RMB 2.99.

This company is held by nine star fund managers. These star fund managers have also increased their positions recently. The most watched fund manager holding the company is Yuanhai Liu from Soochow Fund. In the 2025 Securities Star public fund manager top investment rankings, he ranked within the top 50. His current total fund size is RMB 11.392 billion; he has 13 years and 185 days of experience in the industry. Based on an analysis of his past performance, this fund manager demonstrates outstanding fundamental stock-picking ability and is skilled at identifying value stocks and growth stocks.

The fund holding the most shares of Hubei DriLink is Yongying Technology Optimum Choice Hybrid Initiation A, currently with a size of RMB 4.69 billion and the latest net value of 3.7972 (March 24), up 2.27% from the previous trading day and up 186.91% over the past year. The fund’s current fund manager is Jie Ren.

Recently, well-known institutions have focused on the following questions about the company:

Q: Capital expenditures and market conditions

A: The increasing demand for servers driven by I, data storage, and high-speed network infrastructure, as well as the expansion of emerging application areas, bring development opportunities to the industry. In the past two years, the company has accelerated capital expenditures. In the cash flow statement for the first three quarters of 2025, cash paid for the purchase and construction of fixed assets, intangible assets, and other long-term assets was approximately RMB 2.104 billion. The company planned in 2024 Q4 to invest approximately RMB 4.3 billion to build an expansion project for high-end printed circuit boards supporting AI chip manufacturing, which started construction in late June 2025, and it is also being advanced in an orderly manner. It is expected that trial production will begin in the second half of 2026 and production capacity will be gradually ramped up. Implementing this project will further expand the company’s high-end product production capacity and better meet customers’ long- and medium-term demand for high-end printed circuit boards in emerging computing scenarios such as high-speed computing servers and artificial intelligence. This will strengthen the company’s core competitiveness, improve its economic efficiency. In addition, before the Spring Festival, the company issued an announcement regarding the construction of a production project for high-end printed circuit boards, with a construction period of 2 years. The company’s wholly owned subsidiary, Kunshan Huli Microelectronics Co., Ltd., also plans to purchase land-use rights and buildings from an independent third party to build the printed circuit board production project and its supporting facilities. In 2025, it is clearly visible that more peer companies have also been directing resources toward this area, attempting to enter and capture a certain market share; competition is therefore expected to intensify in the future. The company needs to accurately grasp the strategic timing, moderately accelerate the pace of investment, and through in-depth analysis of market trends and its own development needs, reasonably allocate resources—investing more funds into sectors with potential and innovation. The company should continuously upgrade and innovate its technology, develop interconnect technologies with higher density and transmission performance with higher speeds, improve product competitiveness, and respond quickly to market demand, thereby seizing the early advantage and firmly establishing and expanding its “base” business to achieve sustainable development.

4. Thailand plant

The Huzhi Thailand production base entered a small-scale mass production stage in the second quarter of 2025. The Thailand subsidiaries’ losses were approximately RMB 139 million in 2025. In application areas such as AI servers and switches, Huzhi Thailand has gradually passed strict certifications by leading global customers and obtained formal supplier qualification, marking that the company’s global delivery system has taken shape in its initial form. The Thailand plant is now working to enhance its production efficiency and product quality at full speed. As customers expand and product introductions proceed step by step, its production capacity will be released gradually in an orderly manner. It will further validate its capability to produce high-end products, laying a foundation for optimizing and upgrading the product tiered structure. It will also lay a foundation for the resilience of the company’s global supply chain. From the quarter-over-quarter data in Q4 2025, its operating situation has entered a turning point; output scale increased significantly, product structure was further optimized, and production quality and operating efficiency also improved simultaneously. 5. New technology incubation line

As previously announced, the company plans to invest in establishing a wholly owned subsidiary in Jintan District, Changzhou, to set up an incubation platform for frontier technologies such as CoWoP and advanced processes such as mSAP, and to build a closed-loop system of “R&D—pilot testing—verification—application.” It will also lay out next-generation technology directions such as optical-and-copper integration. The company will systematically enhance product capabilities in signal transmission, power distribution, and functional integration. After the relevant technology and process verifications mature and industrialization conditions are met, it will build and invest in a scaled production line for high-density optoelectronic integrated circuit boards. The project involves R&D of frontier technologies including CoWoP, mSAP, and optical-and-copper integration. It has characteristics such as a long R&D cycle, high technical difficulty, and complex processes. It should be noted that during the R&D process, risks may arise such as deviation in technical routes, inability to break through key processes, or the pace of commercialization transformation not meeting expectations. The launch of Phase II depends on the incubation effectiveness of Phase I and market validation. If Phase I does not meet expectations, the investment decision for Phase II will be directly postponed or terminated. The company will use approaches such as digital simulation and verification, and coordinated R&D across upstream and downstream of the industrial chain, to deeply lock in customers’ technology evolution plans, convert uncertainties of frontier technologies into controllable engineering practices, reduce R&D risks, and strive to achieve the expected benefits of investment projects, thereby creating long-term value for shareholders.

The above content has been compiled by Securities Star based on publicly available information and generated by an AI algorithm (Internet Information Filing No. 310104345710301240019). It does not constitute investment advice.