Huafeng Aluminum Industry 2025 Annual Report Analysis: Revenue Up 14.79%, Operating Cash Flow Plummets 78.47%

Key Profitability Indicators: Revenue Growth, Slight Profit Decline

In 2025, Huanfeng Aluminum Industry achieved operating revenue of 12.49B yuan, up 14.79% year over year, with its revenue scale continuing to expand. However, net profit attributable to shareholders of the listed company was 1.2B yuan, down slightly by 1.32% year over year; net profit after deducting non-recurring gains and losses was 1.16B yuan, down 3.89% year over year, indicating mild pressure on the profit side.

From earnings per share, basic earnings per share were 1.20 yuan per share, down 1.64% year over year; non-GAAP earnings per share were 1.16 yuan per share, down 3.33% year over year. Per-share earnings level fell slightly in line with the decline in net profit.

Expense Structure: Finance Expenses Surge Sales Expenses Plunge

In 2025, the company’s total period expenses were 397.6 million yuan, down 6.7% year over year, with a significant shift in its expense structure:

• Selling expenses: 49.6659 million yuan, down sharply 32.89% year over year, mainly due to adjustments to accounting rules for business changes, resulting in a major reduction in the expense scale.
• Administrative expenses: 138.6219 million yuan, up 5.31% year over year, increasing slightly alongside the expansion of the company’s operating scale.
• Finance expenses: 21.0721 million yuan, up 1110.15% year over year, mainly driven by foreign exchange rate fluctuations; foreign exchange gains declined significantly compared with the same period last year, leading to a substantial rise in finance expenses.
• R&D expenses: 188.2735 million yuan, down 14.14% year over year, indicating the R&D investment scale contracted somewhat.

R&D Personnel Profile: Team Size Stable, Structure Diverse

As of end-2025, the company had 310 R&D personnel, accounting for 14.89% of the total workforce. The R&D team size remained stable. In terms of educational background, there were 11 master’s degree holders, 57 bachelor’s degree holders, 79 junior college/associate degree holders, and 163 high school or below, covering different educational levels. In terms of age distribution, 163 R&D employees aged 30–40 accounted for more than 50%, forming a core R&D team led by mid-career and young professionals, combining both experience and vitality.

Cash Flow: Operating Cash Flow Contracts Sharply, Investing Cash Flow Continues Outflows

In 2025, the company’s cash flow showed a split pattern:

• Net cash flow from operating activities: 160 million yuan, down 78.47% year over year, mainly because inventories for turnover increased during the process, operating cash outflows rose significantly, and the company’s cash inflow/collection ability weakened markedly.
• Net cash flow from investing activities: -470 million yuan; the same period last year was -141 million yuan. It continued to show net outflows, mainly used for purchasing and constructing fixed assets, intangible assets, and other long-term assets. The company is still in a phase of capacity expansion.
• Net cash flow from financing activities: 135 million yuan; the same period last year was -499 million yuan. It shifted from net outflow to net inflow, mainly by raising funds through borrowings and other means, to support the company’s investment and operating needs.

Risk Warning: Multiple External Pressures Still Exist

Risk of Fluctuations in Raw Material Prices

The company’s main raw material is aluminum ingots. Raw material costs account for over 80%. The aluminum ingot price is determined based on market average prices. If aluminum prices fluctuate sharply in the short term, it will directly affect the company’s profits. Meanwhile, differences between domestic and international aluminum prices will also impact gross margin.

Risk of International Trade Friction

The company’s export business accounts for about 30%. Currently, countries and regions such as the United States, the European Union, and India impose countervailing duty and anti-dumping measures, sanctions, and additional tariffs on China’s aluminum products. If trade protectionism rises, it will affect the company’s international sales of its products.

Risk of Exchange Rate Fluctuations

The company settles its exports in US dollars and euros. Fluctuations in the RMB exchange rate will result in foreign exchange gains or losses. Although the company hedges risks through transactions in foreign exchange derivatives, as the scale of export business grows, the potential impact of exchange rate fluctuations on performance still exists.

Risk That New Investment Projects Fall Short of Expectations

The Chongqing annual production of 450k tons of high-end aluminum sheets, strips, and foils for new energy vehicles intelligent construction project has a total investment exceeding 2.6 billion yuan. During project implementation, it may face risks such as increased investment, changes in interest rates, and progress falling short of expectations. If project returns do not meet expectations, it will affect the company’s long-term profitability.

Compensation for Executives and Directors: Core Executive Pay Stable

In 2025, the compensation for the company’s core senior executives is as follows:

• Chairman Chen Guozhen: the total pre-tax remuneration received from the company during the reporting period was 6.4005 million yuan;
• General Manager Gao Yongjin: the total pre-tax remuneration was 7.7785 million yuan;
• Executive Vice General Manager You Ruojie: the total pre-tax remuneration was 3.9847 million yuan;
• CFO Ruan Haiying: the total pre-tax remuneration was 1.9296 million yuan.

Core executive compensation remains stable and is broadly matched with the company’s operating scale and the industry level.

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