Hongqiao Holdings 2025 Annual Report Analysis: Non-recurring Net Profit Plummets by 327.93%, R&D Expenses Decrease by 27.29%

Operating Revenue: Full Industry Chain Layout Supports Steady Growth

In 2025, the company achieved operating revenue of 156.721 billion yuan, a year-on-year increase of 4.25%. In terms of revenue composition, liquid aluminum contributed 61.63% of the revenue, with aluminum alloy ingots and recycled aluminum showing impressive growth rates of 47.86% and 51.36%, respectively, indicating the differentiated growth potential of the company’s product structure. At the same time, alumina sales increased to 19.16% of total revenue, with a year-on-year growth of 6.74%, showcasing the ongoing synergistic effects of the full industry chain layout.

Net Profit: Non-Recurring Gains Support Earnings, Excluding Non-Recurring Items Decline Sharply

In 2025, the net profit attributable to the shareholders of the listed company was 17.864 billion yuan, a year-on-year increase of 3.69%, but the net profit excluding non-recurring items was -0.369 billion yuan, a sharp year-on-year drop of 327.93%. The growth in net profit was mainly reliant on the current net gain or loss from subsidiaries generated by the merger of enterprises under common control from the beginning of the period to the merger date (19.125 billion yuan), while excluding non-recurring items, the loss widened, indicating that the profitability of the company’s main business is under pressure.

Earnings Per Share: Profit Growth Drives Improvement in Indicators

In 2025, the basic earnings per share was 1.3708 yuan/share, a year-on-year increase of 3.68%; the earnings per share excluding non-recurring items was -0.0283 yuan/share, a year-on-year decline of 327.93%, consistent with the trends in net profit and net profit excluding non-recurring items, reflecting the significant supportive effect of non-recurring gains and losses on earnings per share.

Expenses: Structural Optimization and Precise R&D Investment

In 2025, the company’s total period expenses amounted to 3.303 billion yuan, a year-on-year decrease of 5.04%, with an optimized expense structure:

• Sales Expenses: 46.8281 million yuan, a year-on-year decrease of 15.66%, mainly due to adjustments in the marketing department’s performance plan, leading to a reduction in sales commissions.
• Management Expenses: 1.341 billion yuan, a year-on-year increase of 10.54%, mainly due to increases in service fees and amortization and depreciation expenses.
• Financial Expenses: 1.661 billion yuan, a year-on-year decrease of 7.59%, mainly due to reduced interest expenses from a general decline in borrowing and decreased foreign exchange losses due to the appreciation of the RMB against the USD.
• R&D Expenses: 254 million yuan, a year-on-year decrease of 27.29%, mainly due to the company’s focus on optimizing and upgrading mature process systems, resulting in fewer R&D projects and a decline in the prices of R&D consumables.

R&D Personnel Situation: Stable Team and Optimized Educational Structure

In 2025, the number of R&D personnel in the company was 1,834, a year-on-year increase of 2.92%, accounting for 5.07% of the total staff. Among them, the number of R&D personnel with a master’s degree increased from 1 to 3, a year-on-year increase of 200%, indicating an optimized educational structure within the R&D team, providing talent support for technological research and development.

Cash Flow: Operating Cash Flow Declines Steadily, Financing Cash Flow Pressure Emerges

In 2025, the net cash flow from operating activities was 23.995 billion yuan, a year-on-year decrease of 5.09%, mainly due to increased depreciation of fixed assets and a decrease in operating receivables; the net cash flow from investing activities was -6.277 billion yuan, a year-on-year reduction in losses of 27.37%, mainly due to reduced cash payments for the purchase and construction of fixed assets; the net cash flow from financing activities was -15.083 billion yuan, a year-on-year decrease of 36.78%, mainly due to reduced borrowing and increased repayment of loans.

Potential Risks: Multiple Pressures Test Risk Resistance Ability

2. Industry Cycle Risk: The aluminum industry is greatly influenced by the macro economy and supply-demand dynamics. If downstream demand is weak, product prices may fluctuate, impacting the company’s profitability.
3. Cost Increase Risk: Fluctuations in raw material and energy prices may push up production costs, especially since electricity costs represent a significant proportion, and price fluctuations can significantly impact profits.
4. Environmental Policy Risk: Stricter environmental requirements may increase the company’s environmental investment. Failure to meet standards could affect production.
5. Market Competition Risk: As industry concentration increases, competition among leading companies intensifies. If the company’s technological and cost advantages weaken, market share may be affected.

Compensation for Directors, Supervisors, and Senior Executives: Disclosure of Core Management Compensation

During the reporting period, former chairman Yang Congsen received a total pre-tax compensation of 1.3979 million yuan from the company, former director and general manager Zhang Wei received 936,100 yuan, former director, deputy general manager, and financial director Liu Xinghai received 690,500 yuan, and current director and board secretary Xiao Xiao received 1.6876 million yuan. Independent directors Sun Nan and Liu Jianwen each received an allowance of 80,000 yuan, while Hu Yi voluntarily waived the allowance.

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Editor: Xiao Lang Quick Report