Yongda Co., Ltd. 2025 Annual Report Analysis: Revenue increased by 140.13% to 2.04 billion yuan; net profit attributable to parent decreased by 39.89% to 47.53 million yuan

Core Revenue and Profitability Analysis

Operating Revenue: Doubling in Scale, Major Structural Adjustments

In 2025, the company achieved operating revenue of 2.04 billion yuan, a significant year-over-year increase of 140.13%, with revenue doubling primarily due to the full-year inclusion of Jinyuan Equipment’s data (last period only included data from November-December).

From the revenue structure perspective, the wind power industry became the main growth engine, generating 1.506 billion yuan, a 261.52% increase year-over-year, accounting for 73.85% of total revenue, up from 49.05% last year. Revenue from wind power and engineering machinery castings reached 1.334 billion yuan, a 497.29% surge, with its share rising from 26.30% to 65.42%. Meanwhile, traditional tunnel excavation industry revenue dropped 65.93% to 67.15 million yuan, decreasing its share from 23.20% to 3.29%, indicating a major shift in the company’s business focus toward the wind power sector.

Net Profit and Non-Recurring Net Profit: Revenue Growth but Profitability Decline

In 2025, net profit attributable to shareholders of the listed company was 47.53 million yuan, down 39.89% year-over-year; after deducting non-recurring gains and losses, net profit was 23.14 million yuan, a 43.91% decrease, showing a clear trend of “increased revenue but decreased profit.”

Quarterly data shows notable profit fluctuations:

The loss in Q4 was the main drag on the full-year profit decline, mainly due to concentrated costs related to Jinyuan Equipment and the contraction of traditional tunnel business.

Earnings Per Share: Decline in Profitability Indicators

In 2025, basic earnings per share (EPS) was 0.1981 yuan, and non-recurring EPS was 0.0964 yuan, down 39.88% and 43.92% respectively, consistent with the decline in net profit, reflecting an overall decrease in profitability.

Cost Side: Scale Expansion Raises Expenses

In 2025, total operating expenses reached 154.78 million yuan, up 97.20% year-over-year, with expenses growing in tandem with revenue, mainly due to the full-year inclusion of Jinyuan Equipment.

R&D Investment: Significant Growth and Workforce Expansion

In 2025, R&D expenditure totaled 53.84 million yuan, up 256.37%, with R&D spending accounting for 2.64% of revenue, up from 1.78%. Focus areas include offshore wind power and marine diesel engines, with several projects completed and reaching industry-leading levels, supporting the company’s move into high-end markets.

The R&D team also expanded:

The trend toward younger, higher-educated R&D personnel will inject vitality into technological innovation.

Cash Flow: Operating Cash Turned Positive, Financing Cash Turned Negative

In 2025, the company’s net cash flow exhibited an “one positive, two negatives” pattern:

Operating Cash Flow: From Negative to Positive, Improved Quality

Operating cash flow shifted from a net outflow of 28.41 million yuan last year to a net inflow of 126.63 million yuan, mainly due to full-year inclusion of Jinyuan Equipment’s operations and improved receivables management, with accounts receivable decreasing from 965 million yuan to 837 million yuan, down 13.20%.

Investing Cash Flow: Reduced Outflows, Asset Disposals Increase

Net cash outflow from investing activities narrowed by 77.41%, mainly because of a 3.058 billion yuan increase in cash received from investment recoveries and an 8.125 billion yuan increase in cash from disposals of fixed and intangible assets, which totaled 1.35 billion yuan, up 812.54%.

Financing Cash Flow: From Positive to Negative, Debt Repayment Pressure

Financing cash flow turned from a net inflow of 301.23 million yuan last year to a net outflow of 6.82 million yuan, mainly due to debt repayments of 989 million yuan, an 83.21% increase, while financing inflows grew only 16.14%, leading to a net cash outflow.

Management Compensation: Significant Differences Among Key Executives

In 2025, the compensation of core management was as follows:

Notably, director Ge Yanming’s compensation is significantly higher, mainly because he also serves as General Manager of Jinyuan Equipment, with pay linked to its performance. Chairman Shen Peiliang’s compensation is relatively low, as he does not receive remuneration from subsidiaries.

Risk Warnings: Seven Major Operational Risks to Watch

2. Macroeconomic Fluctuation Risk: The company’s downstream sectors—tunnel excavation, engineering machinery, and wind power—are highly correlated with macroeconomic conditions. An economic downturn could impact fixed asset investments and affect company performance.

3. Product Gross Margin Decline Risk: In 2025, wind power gross margin was 13.34%, down 3.00 percentage points year-over-year. Rising raw material costs or intensified market competition could further compress margins.

4. Inventory Impairment Risk: End-of-year inventory balance was 837 million yuan, up 24.22%. Changes in market demand or falling product prices could lead to inventory write-downs.

5. Accounts Receivable Bad Debt Risk: Accounts receivable at year-end was 837 million yuan, still large despite a decrease. Deterioration in downstream clients’ financial health could increase bad debt risk.

6. Raw Material Dependency and Price Fluctuation Risk: Steel is the main raw material. Significant price increases that cannot be passed downstream could squeeze profit margins.

7. Product Quality Risk: As a provider of core components for high-end equipment, quality issues could harm customer relationships and damage the company’s reputation.

8. Safety Production Risk: Heavy metal processing involves safety risks. Inadequate safety measures could lead to accidents, affecting operations.

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