Eagle Eye Warning: Shobeide's net cash flow from operating activities continues to be negative

Sina Finance Listed Company Research Institute | Earnings Eagle Eye Early Warning

On March 28, Shubeide released its 2025 annual report. The audit opinion was a standard unqualified audit opinion.

The report shows that the company’s operating revenue for the full year of 2025 was RMB 2.77 billion, up 49.14% year over year; net profit attributable to the parent was RMB 64.6843 million, up 200.35% year over year; net profit after excluding non-recurring gains and losses attributable to the parent was RMB 63.1097 million, up 199.66% year over year; and basic earnings per share were RMB 0.14 per share.

Since the company’s listing in May 2012, it has distributed cash dividends 9 times, with cumulative cash dividends already implemented of RMB 116 million.

The listed company earnings eagle eye early warning system conducts intelligent quantitative analysis of Shubeide’s 2025 annual report from four major dimensions: earnings quality, profitability, funding pressure and safety, and operating efficiency.

I. Earnings quality

During the reporting period, the company’s revenue was RMB 2.77 billion, up 49.14%; net profit was RMB 77.1799 million, up 213.4%; and net cash flow from operating activities was -RMB 27.527 million, up 55.08%.

From the overall earnings performance, it is necessary to focus on:

• The growth rate of operating revenue has continued to decline for the past three quarters. During the reporting period, operating revenue grew 46.4% year over year, and the growth rate has continued to decline for the past three quarters.

• Net profit turned profitable after two years of losses for the first time. In the past three annual reports, net profit was -RMB 220 million, -RMB 70 million, and RMB 80 million, showing relatively large fluctuations.

| Item | 20231231 | 20241231 | 20251231 | | Net profit (RMB) | -218 million | -68.0583 million | 77.1799 million |

In terms of the allocation ratio of revenue costs and period expenses, it is necessary to focus on:

• The change in selling expenses differs greatly from the change in operating revenue. During the reporting period, operating revenue changed 49.15% year over year; selling expenses changed 27.2% year over year; and the difference between selling expenses and operating revenue changes is relatively large.

Based on the quality of cash flows, it is necessary to focus on:

• Net cash flow from operating activities has continued to be negative. During the reporting period, net cash flow from operating activities was -RMB 0.3 billion, and it has been negative for three consecutive years.

| Item | 20231231 | 20241231 | 20251231 | | Net cash flow from operating activities (RMB) | -84.1303 million | -61.2801 million | -27.527 million |

• Net profit and net cash flow from operating activities diverge. During the reporting period, net profit was RMB 0.8 billion and net cash flow from operating activities was -RMB 0.3 billion, indicating divergence between net profit and operating cash flow.

| Item | 20231231 | 20241231 | 20251231 | | Net cash flow from operating activities (RMB) | -84.1303 million | -61.2801 million | -27.527 million | | Net profit (RMB) | -218 million | -68.0583 million | 77.1799 million |

• The ratio of net cash flow from operating activities to net profit is below 1. During the reporting period, the ratio of net cash flow from operating activities to net profit was -0.357, which is below 1, indicating relatively weak profitability quality.

| Item | 20231231 | 20241231 | 20251231 | | Net cash flow from operating activities (RMB) | -84.1303 million | -61.2801 million | -27.527 million | | Net profit (RMB) | -218 million | -68.0583 million | 77.1799 million | | Net cash flow from operating activities / Net profit | 0.39 | 0.9 | -0.36 |

II. Profitability

During the reporting period, the company’s gross margin was 22.47%, down 1.56% year over year; the net profit margin was 2.79%, up 176.04% year over year; and return on equity (weighted) was 6.31%, up 223.97% year over year.

In combination with the company’s operating end and returns, it is necessary to focus on:

• Sales gross margin declined. During the reporting period, the sales gross margin was 22.47%, down 1.56% year over year.

• Sales gross margin declined while sales net profit margin increased. During the reporting period, sales gross margin fell from 22.83% in the same period last year to 22.47%; sales net profit margin rose from -3.66% in the same period last year to 2.79%.

In combination with the company’s asset-side returns, it is necessary to focus on:

• The average return on equity has been below 7% for the past three years. During the reporting period, the weighted average return on equity was 6.31%, and the weighted average return on equity for the most recent three accounting years was on average below 7%.

| Item | 20231231 | 20241231 | 20251231 | | Return on equity | -16.2% | -5.09% | 6.31% | | Return on equity growth rate | -142.88% | 68.58% | 223.97% |

• Return on invested capital is below 7%. During the reporting period, the company’s return on invested capital was 4.54%, and the average value across the three reporting periods was below 7%.

| Item | 20231231 | 20241231 | 20251231 | | Return on invested capital | -8.73% | -1.17% | 4.54% |

Regarding whether there is any impairment risk, it is necessary to focus on:

• The year-over-year change rate of asset impairment losses exceeds 30%. During the reporting period, asset impairment losses were -RMB 0.2 billion, up 60.07% year over year.

| Item | 20231231 | 20241231 | 20251231 | | Asset impairment losses (RMB) | -98.2052 million | -51.6149 million | -20.6122 million |

III. Funding pressure and safety

During the reporting period, the company’s asset-liability ratio was 69.95%, up 5.42% year over year; the current ratio was 1.12, and the quick ratio was 0.87; total debt was RMB 1.398 billion, of which short-term debt was RMB 1.112 billion, and short-term debt as a percentage of total debt was 79.51%.

From an overall view of the financial situation, it is necessary to focus on:

• Asset-liability ratio continues to grow. In the past three annual reports, the asset-liability ratio was 62.07%, 66.35%, and 69.95% respectively, showing an upward growth trend.

From near-term funding pressure, it is necessary to focus on:

• Large short-term debt and a shortfall in existing funds. During the reporting period, broad money funds were RMB 580 million, short-term debt was RMB 1.08 billion, and broad money funds / short-term debt was 0.54; broad money funds were lower than short-term debt.

• Short-term debt pressure is relatively high, putting strain on the funding chain. During the reporting period, broad money funds were RMB 580 million, short-term debt was RMB 1.08 billion, and net cash flow from operating activities was -RMB 0.3 billion; there is a gap between short-term debt, financial expenses, and monetary funds and net cash flow from operating activities.

• Cash ratio is below 0.25. During the reporting period, the cash ratio was 0.21, which is below 0.25.

• The cash ratio continues to decline. In the past three annual reports, the cash ratio was 0.29, 0.24, and 0.21 respectively, continuing to decline.

From long-term funding pressure, it is necessary to focus on:

• The ratio of total debt to net assets continues to rise. In the past three annual reports, the ratio of total debt to net assets was 105.9%, 114.24%, and 129.17% respectively, showing continuous growth.

From the perspective of fund management, it is necessary to focus on:

• The ratio of interest income / monetary funds is below 1.5%. During the reporting period, monetary funds were RMB 230 million and short-term debt was RMB 1.08 billion; the company’s average ratio of interest income / monetary funds was 0.953%, below 1.5%.

• The ratio of total debt / total liabilities is greater than 20%, and the ratio of interest expense / net profit is greater than 30%. During the reporting period, the ratio of total debt / total liabilities was 55.49%, and the ratio of interest expense to net profit was 50.33%; interest expense has a significant impact on the company’s operating performance.

• Advance payments to suppliers change significantly. During the reporting period, advance payments to suppliers were RMB 0.1 billion, with a period-beginning to period-end change rate of 47.15%.

From the perspective of funding coordination, it is necessary to focus on:

• Capital expenditures continue to be higher than net cash inflow from operating activities. In the past three annual reports, the cash paid for the purchase and construction of fixed assets, intangible assets, and other long-term assets was RMB 230 million, RMB 110 million, and RMB 150 million respectively; the company’s net cash flow from operating activities was -RMB 80 million, -RMB 60 million, and -RMB 30 million respectively.

• Free cash flow is negative. In the past three annual reports, free cash flow was -RMB 0.4 billion, -RMB 0.4 billion, and -RMB 1.2 billion respectively, continuing to be negative.

| Item | 20231231 | 20241231 | 20251231 | | Free cash flow (RMB) | -36.3847 million | -37.939 million | -115 million |

• Funding is coordinated, but there are payment difficulties. During the reporting period, working capital was RMB 254 million; the company’s working capital requirement was RMB 834 million. The working capital brought by investing and financing activities cannot fully cover the funding need for the company’s operating activities. The company’s cash payment capability was -RMB 580 million.

| Item | 20251231 | | Cash payment capability (RMB) | -579 million | | Working capital requirement (RMB) | 834 million | | Working capital (RMB) | 254 million |

IV. Operating efficiency

During the reporting period, the company’s accounts receivable turnover ratio was 4.05, up 17.43% year over year; inventory turnover ratio was 4.71, up 8.47% year over year; and total asset turnover ratio was 0.83, up 32.78%.

In terms of operating assets, it is necessary to focus on:

• The proportion of accounts receivable / total assets continues to increase. In the past three annual reports, the ratio of accounts receivable / total assets was 17.8%, 18.41%, and 22.24% respectively, continuing to rise.

• The ratio of inventory / total assets continues to increase. In the past three annual reports, the ratio of inventory / total assets was 9.61%, 12.52%, and 14.63% respectively, continuing to rise.

In terms of long-term assets, it is necessary to focus on:

• Long-term prepaid expenses change significantly compared with the beginning of the period. During the reporting period, long-term prepaid expenses were RMB 40 million, up 41.11% from the beginning of the period.

In terms of the three-fee dimensions, it is necessary to focus on:

• Financial expenses change significantly. During the reporting period, financial expenses were RMB 40.92 million, up 24.49% year over year.

Click on Shubeide’s Eagle Eye early warning to view the latest warning details and a visual preview of the financial reports.

Sina Finance listed company earnings eagle eye early warning introduction: The listed company earnings eagle eye early warning is an intelligent professional analysis system for listed company financial reports. The eagle eye early warning tracks and interprets the latest financial reports of listed companies across multiple dimensions, including company earnings growth, earnings quality, funding pressure and safety, and operating efficiency, by consolidating a large number of authoritative financial experts from accounting firms and listed companies, and uses text and graphics to point out possible financial risk points. It provides professional, efficient, and convenient technical solutions for listed company financial risk identification and early warning for financial institutions, listed companies, regulatory authorities, and others.

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