Jidong Equipment 2025 Annual Report Interpretation: Non-GAAP Net Profit Increases 63.59%, Operating Cash Flow Decreases 21.60% Year-over-Year

Revenue Analysis

In 2025, Jidong Equipment achieved operating revenue of 2.779 billion yuan, an increase of 11.37% year-over-year. From the product structure perspective, electrical equipment and spare parts business revenue reached 130 million yuan, a surge of 57.69% year-over-year, becoming the main driver of revenue growth, mainly due to market expansion of products like intelligent medium-voltage cabinets and energy-saving control cabinets. Mechanical equipment and spare parts, as well as civil construction and installation services, generated revenues of 1.25 billion yuan and 574 million yuan, respectively, with growth rates of 15.91% and 16.47%, maintaining stable growth in traditional businesses. Maintenance engineering revenue was 353 million yuan, a slight increase of 0.38%. Mining engineering and greening restoration revenue totaled 465 million yuan, down 4.30% year-over-year.

Regionally, southern regions contributed 609 million yuan, a significant increase of 49.09%, becoming a new growth pole; northern regions contributed 2.157 billion yuan, up 4.33%, forming the company’s core revenue base; overseas business revenue was 12.74 million yuan, down 32.43%, indicating challenges in overseas market expansion.

Net Profit Analysis

In 2025, net profit attributable to shareholders of the listed company was 26.115 million yuan, an increase of 19.47% year-over-year. The growth was mainly driven by increased operating revenue, along with cost reduction and efficiency improvements that enhanced profitability. However, non-recurring gains and losses had a significant impact on net profit, totaling 13.632 million yuan during the reporting period, accounting for 52.20% of net profit, mainly including government subsidies of 8.156 million yuan, debt restructuring gains of 7.241 million yuan, etc.

Net Profit Excluding Non-Recurring Items

After excluding non-recurring gains and losses, net profit attributable to shareholders was 12.482 million yuan, a substantial increase of 63.59% year-over-year, far exceeding the growth rate of net profit, indicating continuous improvement in core business profitability. This is mainly due to better gross margins of core products and effective cost control, especially the increased sales proportion of high-margin products like electrical equipment, spare parts, and mechanical equipment, boosting overall profitability.

Basic Earnings Per Share (EPS)

In 2025, basic EPS was 0.1150 yuan per share, up 19.42% year-over-year, consistent with the net profit growth, reflecting a synchronized increase in earnings per share with profitability.

Diluted EPS Excluding Non-Recurring Items

Diluted EPS was 0.0550 yuan per share, an increase of 63.53%, matching the growth in net profit excluding non-recurring items, demonstrating significant improvement in main business profitability and reinforcing the company’s enhanced core competitiveness.

Cost Analysis

In 2025, total operating expenses were 176.4284 million yuan, down 3.50% year-over-year, indicating effective cost management. Management expenses and financial expenses decreased by 9.97% and 17.14%, respectively, becoming the main drivers of cost reduction; selling expenses decreased by 5.88%, while R&D expenses slightly increased by 1.55%, further optimizing the expense structure.

Selling Expenses

Selling expenses during the reporting period were 31.9133 million yuan, down 5.88%. The main reason is the company’s proactive optimization of sales organization, focusing on core markets and high-value businesses, improving sales team efficiency, and achieving dual improvements in cost efficiency and management quality. Structurally, expenses such as employee compensation, travel expenses, and service fees all declined to varying degrees, demonstrating effective expense control.

Management Expenses

Management expenses were 88.875 million yuan, down 9.97%. This is partly due to the company’s optimization of expense structure and reduction of unnecessary expenditures, as well as a high base caused by a one-time performance bonus paid in the previous year for a three-year term. During the period, expenses for employee compensation, office expenses, and business entertainment all decreased, reflecting improved management efficiency.

Financial Expenses

Financial expenses were 4.1433 million yuan, down 17.14%, mainly benefiting from the company’s efforts to secure favorable loan interest rates, reducing financing costs. Interest expenses were 4.9488 million yuan, down 26.91%, while interest income was 1.5491 million yuan, down 15.83%, leading to a significant reduction in net interest expenditure.

R&D Expenses

R&D expenses were 51.4968 million yuan, up 1.55%, with a slower growth rate. The company was approved for 58 patents (including 6 invention patents) during the year, with new technologies such as high-efficiency cooling machines and fuel replacement in step furnaces being applied. The company established one national-level and one municipal-level innovation platform, with notable synergistic effects. However, R&D investment growth lagged behind revenue growth, and future efforts should focus on increasing R&D investment to maintain technological leadership.

R&D Personnel

In 2025, the company had 195 R&D personnel, an increase of 4.28%, with R&D staff accounting for 11.57% of total employees, up 0.73 percentage points. Regarding educational background, over 70% of R&D personnel hold bachelor’s degrees or higher, including 32 with master’s degrees or above. The company recruited 51 technical personnel and conducted over 200 professional training sessions, implementing a dual-channel, three-level career system to effectively motivate R&D staff.

Cash Flow Analysis

In 2025, net increase in cash and cash equivalents was -27.9493 million yuan, reducing cash outflow by 90.7592 million yuan compared to the previous year. Although cash flow improved, it remained negative. Operating cash flow was -41.8407 million yuan, down 21.60%; investing cash flow was -2.2473 million yuan, a significant improvement of 92.33%; financing cash flow was 16.1387 million yuan, turning positive with a growth of 129.35%.

Net Cash Flows from Operating Activities

Total cash inflow from operating activities was 1.77 billion yuan, up 19.15%; total cash outflow was 1.812 billion yuan, up 19.21%, with outflows growing slightly faster than inflows, resulting in a net cash outflow of 41.8407 million yuan, down 21.60%. The main reasons include increased working capital occupation due to business expansion, especially accounts receivable and inventory. However, cost and expense control was effective, with reductions in labor costs and taxes, supporting steady improvement in operating quality.

Net Cash Flows from Investing Activities

Cash inflow from investing activities was 77,900 yuan, down 68.63%; cash outflow was 2.3252 million yuan, down 92.13%. The net cash flow from investing activities was -2.2473 million yuan, a significant improvement of 92.33%. This was mainly due to reduced capital expenditures, as the company did not make additional investments in associated companies during the period.

Net Cash Flows from Financing Activities

Cash inflow from financing activities was 243 million yuan, up 9.35%; cash outflow was 226 million yuan, down 18.21%. The net cash flow from financing was 16.1387 million yuan, turning positive with a growth of 129.35%. This was mainly because the company repaid short-term loans proactively, reducing interest-bearing liabilities, and increased cash received from new borrowings.

Potential Risks

Intensified Industry Competition

As the building materials machinery industry undergoes transformation and upgrading, leading enterprises continue to expand their advantages. Homogenized competition and rising price pressures, along with overseas competitors entering high-end markets, pose risks. If the company’s core competitiveness cannot be continuously enhanced, market share may be squeezed.
Countermeasures: Increase R&D investment to develop differentiated technologies; optimize full industry chain cost management; accelerate transformation toward “product + service + integrated solutions” to expand value-added services; strengthen brand building to improve market recognition and pricing power.

Policy-Driven Market Risks

The company’s business is highly sensitive to policies in construction materials and mining sectors, with demand directly affected by infrastructure investment, real estate regulation, and green low-carbon policies. Policy adjustments may lead to reduced equipment procurement needs or disconnect between R&D products and market demand, impacting performance.
Countermeasures: Establish forward-looking policy analysis mechanisms; focus on energy-saving, low-carbon, and intelligent equipment; leverage technological extensibility to explore related fields like metallurgy and power, reducing dependence on a single industry.

Technology Iteration and R&D Risks

Technological upgrading in the building materials equipment industry accelerates, with ongoing integration of new technologies such as smart and green low-carbon solutions. Insufficient R&D investment or loss of core technical personnel may cause lag in technological updates; multiple technical routes increase risk of misjudgment, potentially leading to R&D losses and market-product mismatches, weakening core competitiveness.
Countermeasures: Establish stable R&D investment mechanisms; build layered R&D teams; improve talent incentives and career development channels; develop multi-dimensional technology analysis systems; strengthen laboratory testing and validation; control R&D trial-and-error costs.

Overseas Market Risks

Overseas expansion faces geopolitical fluctuations, legal and regulatory differences, cultural barriers, and project management risks, which may cause delays or cost overruns; currency fluctuations, especially in USD and RMB, can lead to exchange gains or losses, affecting product pricing and project returns.
Countermeasures: Select politically stable and policy-friendly regions; build professional overseas teams; cooperate with local enterprises to reduce operational risks; establish contingency plans; use financial hedging tools to manage exchange rate risks; optimize overseas pricing strategies.

Chairman’s Pre-Tax Compensation During the Reporting Period

During the period, Chairman Jiao Liujun received a pre-tax compensation of 357,000 yuan, a significant decrease from 1.3153 million yuan in the previous year, mainly because Jiao Liujun did not receive salary from July to December, reflecting changes in compensation arrangements.

General Manager’s Pre-Tax Compensation During the Reporting Period

General Manager Li Hongbo received a pre-tax compensation of 725,600 yuan, down 37.61% year-over-year, mainly due to the high base from a three-year performance bonus paid last year and the company’s optimization of executive compensation structure.

Deputy General Managers’ Pre-Tax Compensation During the Reporting Period

Deputy General Managers Shi Qingguo and Zhang Xiao received 87,000 yuan and 464,900 yuan, respectively. Shi Qingguo was newly appointed in December 2025 and received only part of the monthly salary; Zhang Xiao previously served as Assistant General Manager, and this appointment as Deputy General Manager maintained a stable salary level. Former Deputy General Manager Si Guoqiang resigned due to work adjustments, with a pre-tax compensation of 518,400 yuan during the period.

Chief Financial Officer’s Pre-Tax Compensation During the Reporting Period

CFO Li Yingjun received 59,000 yuan, having been newly appointed in December 2025 and received only part of the monthly salary. Former CFO Chen Feng resigned due to work adjustments, with a pre-tax compensation of 635,000 yuan during the period.

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