Eagle Eye Warning: Huahai Chengke's Operating Revenue Significantly Declines

Sina Finance Listed Company Research Institute | Financial Report Eagle Eye Warning

On March 17, Huahai Chengke released its 2025 annual report, with an audit opinion of standard unqualified audit opinion.

The report shows that the company’s total operating revenue for 2025 was 458 million yuan, a year-on-year increase of 38.12%; net profit attributable to parent company was 24.252 million yuan, down 39.47% year-on-year; net profit after non-recurring gains and losses attributable to parent was 19.687 million yuan, down 42.32% year-on-year; basic earnings per share were 0.3 yuan/share.

Since listing in March 2023, the company has paid cash dividends four times, with a total cash dividend of 64.4811 million yuan.

The Listed Company Financial Report Eagle Eye Warning System conducts intelligent quantitative analysis of Huahai Chengke’s 2025 annual report from four dimensions: performance quality, profitability, capital pressure and safety, and operational efficiency.

1. Performance Quality

During the reporting period, the company’s revenue was 458 million yuan, up 38.12% year-on-year; net profit was 24.0147 million yuan, down 39.87%; net cash flow from operating activities was 7.6763 million yuan, up 157.9%.

Overall performance analysis requires close attention to:

• Significant decline in operating revenue. During the reporting period, operating revenue was 0 yuan, a sharp decrease of 100%.

• Significant decline in net profit attributable to parent. During the reporting period, net profit attributable to parent was 20.25 million yuan, a sharp decrease of 39.47%.

• Significant decline in net profit after non-recurring gains and losses attributable to parent. During the reporting period, net profit after non-recurring gains and losses was 19.6876 million yuan, down 42.32%.

• Large differences in changes between operating revenue and net profit. During the reporting period, operating revenue increased by 100% year-on-year, while net profit increased by 39.87%, showing a large discrepancy between revenue and profit changes.

• Net profit shows volatility. Over the past three annual reports, net profits were 30 million, 40 million, and 20 million yuan, with respective year-on-year changes of -23.26%, 26.23%, and -39.87%, indicating volatility.

From the perspective of revenue, cost, and period expenses ratio, focus on:

• Divergence between operating revenue and operating costs. During the period, operating revenue decreased by 100% year-on-year, operating costs increased by 36.22%, showing divergence.

• Significant difference between sales expenses and revenue changes. During the period, sales expenses increased by 48.05% year-on-year, while revenue decreased by 100%, indicating a large divergence.

• Divergence between operating revenue and taxes and surcharges. During the period, revenue decreased by 100% year-on-year, while taxes and surcharges increased by 89.6%, showing divergence.

Regarding operating asset quality:

• Inventory growth exceeds operating cost growth. During the period, inventory increased by 114.42% from the beginning of the period, while operating costs increased by 36.22%, indicating inventory growth outpaces costs.

• Inventory growth exceeds revenue growth. Inventory increased by 114.42% from the beginning, while revenue decreased by 100%, indicating inventory growth outpaces revenue.

From cash flow quality perspective:

• Divergence between operating revenue and net cash flow from operating activities. During the period, revenue decreased by 100% year-on-year, while net cash flow from operating activities increased by 157.9%, showing divergence.

• The ratio of net cash flow from operating activities to net profit is below 1. During the period, this ratio was 0.32, indicating weak profit quality.

2. Profitability

During the reporting period, the company’s gross profit margin was 26.66%, an increase of 3.98% year-on-year; net profit margin was 5.24%, down 56.46%; return on equity (weighted) was 2.22%, down 42.93%.

From the asset side, focus on:

• Significant decline in return on equity. During the period, the weighted average ROE was 2.22%, a sharp decrease of 42.93%.

• ROE over the past three years averaged below 7%. The weighted average ROE was 2.22%, and the three-year average ROE was below 7%.

• Return on invested capital below 7%. During the period, the company’s ROIC was 1.54%, with an average below 7% over the three periods.

Unusual gains and losses analysis:

• High proportion of non-recurring gains. During the period, the ratio of non-recurring gains to net profit was 103.1%. (Note: Non-recurring gains include investment net gains, fair value changes, non-operating income, and losses on disposal of non-current assets).

3. Capital Pressure and Safety

The company’s asset-liability ratio was 31.17%, up 20.35% year-on-year; current ratio was 4.36, quick ratio 3.84; total debt was 672 million yuan, with short-term debt of 98.8684 million yuan, accounting for 14.71% of total debt.

Short-term capital pressure:

• Cash ratio continues to decline. Over the past three annual reports, cash ratios were 4.17, 3.73, and 2.12, decreasing steadily.

Long-term capital pressure:

• Total debt to net assets ratio continues to rise. Over the past three reports, ratios were 5.07%, 20.3%, and 30.97%, showing persistent growth.

• From a capital management perspective:

• The ratio of monetary funds to total assets continues to grow, as does the ratio of total debt to total liabilities. Over the past three periods, monetary funds/total assets were 2.96%, 3.99%, and 18%; total debt/total liabilities were 25.66%, 58.07%, and 68.38%, both increasing, indicating a trend of high leverage.

• Interest income to monetary funds ratio below 1.5%. During the period, monetary funds were 570 million yuan, short-term debt was 10 million yuan, and the average interest income to funds ratio was 0.191%, below 1.5%.

• Large fluctuations in prepayments. During the period, prepayments were 5.244 million yuan, a 339.41% change from the beginning.

• Prepayment growth exceeds operating cost growth. During the period, prepayments increased by 339.41% from the beginning, while operating costs increased by 36.22%, showing prepayments grow faster.

From capital coordination:

• Capital expenditures consistently exceed net cash inflow from operating activities. Over the past three periods, payments for fixed assets, intangible assets, and other long-term assets were 70 million, 70 million, and 50 million yuan, respectively, while operating cash flows were 30 million, 2.976 million, and 7.676 million yuan.

4. Operating Efficiency

During the period, the company’s accounts receivable turnover was 2.05, down 21.77%; inventory turnover was 2.58, down 15.04%; total asset turnover was 0.2, down 20.26%.

From operating assets:

• Significant decline in accounts receivable turnover. During the period, it was 0, a sharp drop of 100%.

• Accounts receivable as a percentage of total assets continues to increase. Over the past three reports, ratios were 9.54%, 9.67%, and 9.85%.

From long-term assets:

• Total asset turnover continues to decline. Over the past three periods, ratios were 0.33, 0.25, and 0.2, indicating weakening efficiency.

• Fixed assets fluctuate significantly. During the period, fixed assets increased by 90.42% from the beginning.

• Per-unit fixed asset output value declines annually. Over the past three reports, revenue per fixed asset ratio was 1.96, 1.39, and 0, decreasing continuously.

• Significant changes in construction in progress. During the period, in-progress projects were 2.11 million yuan, up 77.76% from the beginning.

• Large fluctuations in deferred income tax assets, with tax expenses being negative. During the period, deferred tax assets were 20 million yuan, up 211.03% from the beginning; income tax expense was -3.956 million yuan.

• Long-term prepaid expenses fluctuate significantly. During the period, long-term prepaid expenses were 798,000 yuan, up 30.2%.

• Intangible assets fluctuate greatly. During the period, intangible assets were 1.7 billion yuan, up 487.88% from the beginning.

From the three expenses (selling, management, R&D):

• Sales expenses increased by over 20%. During the period, sales expenses were 20.4753 million yuan, up 48.05%.

• Management expenses increased by over 20%. During the period, management expenses were 48.5383 million yuan, up 91.41%.

• Management expenses grew faster than revenue. During the period, management expenses increased by 91.41%, while revenue decreased by 100%, indicating expenses outpacing income.

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Sina Finance Listed Company Financial Report Eagle Eye Warning Introduction: The Eagle Eye Warning system is an intelligent professional analysis system for listed company financial reports. It gathers authoritative financial experts from accounting firms, listed companies, and others to track and interpret the latest financial reports from multiple dimensions such as performance growth, earnings quality, capital pressure and safety, and operational efficiency, providing visual alerts for potential financial risks. It offers professional, efficient, and convenient technical solutions for financial risk identification and early warning for financial institutions, listed companies, and regulatory authorities.

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