Eagle Eye Warning: The ratio of net cash flow from operating activities to net profit for Yonghe Co., Ltd. continues to decline

Sina Finance Listed Company Research Institute | Financial Report Hawk-Eye Early Warning

On April 2, Yonghe Shares released its 2025 annual report.

The report shows that in 2025, the company’s operating revenue was 5.21B yuan, up 13.04% year over year; net profit attributable to shareholders was 562 million yuan, up 123.46% year over year; net profit after excluding non-recurring gains and losses attributable to shareholders was 569 million yuan, up 131.34% year over year; and basic earnings per share were 1.21 yuan per share.

Since going public in June 2021, the company has made cash dividends 4 times, with cumulative implemented cash dividends of 310 million yuan.

The listed-company financial report Hawk-Eye Early Warning system conducts intelligent quantitative analysis of Yonghe Shares’ 2025 annual report from four major dimensions: performance quality, profitability, capital pressure and safety, and operating efficiency.

I. Performance Quality

During the reporting period, the company’s revenue was 5.21B yuan, up 13.04%; net profit was 562 million yuan, up 122.82%; and net cash flow from operating activities was 680 million yuan, up 16.73%.

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

• The ratio of net cash flow from operating activities to net profit continues to decline. In the last three interim reports, the ratio of net cash flow from operating activities to net profit was 2.85, 2.31, and 1.21, respectively, showing a continuous decline, with a downward trend in earnings quality.

II. Profitability

During the reporting period, the company’s gross margin was 25.13%, up 41.68% year over year; net profit margin was 10.8%, up 97.12% year over year; and return on net assets (weighted) was 12.32%, up 34.06% year over year.

From the company’s operating side, regarding returns, it is necessary to focus on:

• Sales gross margin increases significantly. During the reporting period, the company’s sales gross margin was 25.13%, up significantly 41.68% year over year.

• An increase in sales gross margin, but the accounts receivable turnover ratio declines. During the reporting period, sales gross margin rose from 17.74% in the same period last year to 25.13%; the accounts receivable turnover ratio fell from 12.73 times in the same period last year to 12 times.

III. Capital Pressure and Safety

During the reporting period, the company’s asset-liability ratio was 27.66%, down 53.94% year over year; the current ratio was 1.26, and the quick ratio was 0.85; total debt was 894 million yuan, of which short-term debt was 445 million yuan, and short-term debt as a proportion of total debt was 49.81%.

From the perspective of short-term funding pressure, it is necessary to focus on:

• The cash ratio is less than 0.25. During the reporting period, the cash ratio was 0.22, which is below 0.25.

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

• Short-term debt can be covered by broad monetary funds, but long-term debt cannot be covered. During the reporting period, the ratio of broad monetary funds to total debt was 0.48, and broad monetary funds were lower than total debt.

From the perspective of capital management and control, it is necessary to focus on:

• Prepayments have changed significantly. During the reporting period, prepayments were 90.29 million yuan, and the period-beginning change rate was 227.34%.

• The ratio of prepayments to current assets continues to grow. In the last three annual reports, the ratio of prepayments to current assets was 1.75%, 1.81%, and 4.37%, respectively, showing continuous growth.

• The growth rate of prepayments is higher than the growth rate of operating costs. During the reporting period, prepayments increased by 227.34% compared with the beginning of the period, while operating costs grew 2.88% year over year; the growth rate of prepayments is higher than the growth rate of operating costs.

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

• Capital expenditures continue to exceed net cash inflow from operating activities. In the last three annual reports, the cash paid for the purchase/construction of fixed assets, intangible assets, and other long-term assets was 1.43 billion yuan, 960 million yuan, and 690 million yuan, respectively. The company’s net cash flow from operating activities was 520 million yuan, 580 million yuan, and 680 million yuan, respectively.

IV. Operating Efficiency

During the reporting period, the company’s accounts receivable turnover ratio was 12, down 5.72% year over year; the inventory turnover ratio was 5.9, up 3.12%; and total asset turnover ratio was 0.69, up 3.98%.

From the perspective of long-term assets, it is necessary to focus on:

• The unit fixed-asset income/output value continues to decline year by year. In the last three annual reports, the ratio of operating revenue to original value of fixed assets was 1.44, 1.42, and 1.42, respectively, showing a continuous decline.

• Changes in other non-current assets are relatively large. During the reporting period, other non-current assets were 130 million yuan, up 54.26% compared with the beginning of the period.

Click the Yonghe Shares Hawk-Eye Early Warning to view the latest early-warning details and a visualized financial report preview.

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Editor: Xiao Lang Express