Tailing Biotech 2025 Annual Report Analysis: Net profit attributable to non-recurring gains and losses increased by 57.60%, net operating cash flow increased by 93.55%

Core Profitability Indicator Interpretation

Operating Revenue: Slight Decrease of 2.71%, Structural Differentiation Shows Resilience

In 2025, the company achieved operating revenue of 339,538,843.84 yuan, a year-on-year decrease of 2.71%. By product, revenue from the sterile production and contamination control equipment series was 146,733,878.07 yuan, down 10.59% year-on-year, mainly due to a decline in sales of high-priced isolator products; revenue from the microbiological testing technology series was 129,374,633.10 yuan, up 3.84% year-on-year; revenue from organic analysis technology series was 32,530,490.58 yuan, a substantial increase of 27.41%, becoming a new growth driver. By region, domestic revenue was 297,217,167.46 yuan, down 8.26% year-on-year; foreign revenue was 42,321,676.38 yuan, up 69.07% year-on-year, with significant achievements in expanding overseas markets.

Net Profit and Deducted Non-Recurring Net Profit: Significant Improvement in Profit Quality

In 2025, net profit attributable to shareholders of the listed company was 16,485,445.79 yuan, an increase of 26.32% year-on-year; deducted non-recurring net profit was 10,527,649.45 yuan, a substantial increase of 57.60%, far exceeding the growth rate of net profit, mainly due to a year-on-year decrease of 412,773.02 yuan in non-recurring gains and losses, as well as improvements in core business profitability. The company’s non-recurring gains and losses mainly include government subsidies, financial income, etc. The proportion of deducted non-recurring profit increased in the current period, indicating enhanced profitability of the main business.

Earnings Per Share: Steady Increase Along with Profit Growth

Basic earnings per share were 0.14 yuan/share, a year-on-year increase of 16.67%; deducted earnings per share were 0.09 yuan/share, a year-on-year increase of approximately 38.46%. The growth in earnings per share closely matches the growth in net profit, reflecting that the company’s profit growth effectively translates into shareholder returns.

Expense Control Interpretation

Total Expenses: Structural Optimization, Significant Improvement in Financial Expenses

In 2025, total expenses (sales + management + R&D + financial) amounted to 140,273,571.03 yuan, a year-on-year decrease of 4.97%. Among these, sales and management expenses slightly increased, R&D expenses decreased, and financial expenses turned from positive to negative, showing clear optimization of the expense structure.

Sales Expenses: Increased by 8.90%, Precise Marketing Investment

Sales expenses were 46,891,489.75 yuan, a year-on-year increase of 8.90%, mainly due to increased employee compensation for sales staff and stock-based compensation expenses. The company continues to deepen its globalization strategy, with domestic core market consolidation and overseas market expansion proceeding in parallel, leading to improved precision in marketing investment, supporting high growth in overseas revenue.

Management Expenses: Increased by 11.28%, Improved Management Efficiency

Management expenses were 39,289,047.55 yuan, a year-on-year increase of 11.28%, due to increased employee compensation for management staff, depreciation and amortization, and stock-based compensation expenses. The company is promoting organizational structure optimization and improving talent team building, with enhanced management efficiency supporting business development.

Financial Expenses: Turned Negative, Reduced Expenditures, Optimized Capital Structure

Financial expenses were -4,116,222.36 yuan, a significant decrease of 181.76% year-on-year, mainly due to the elimination of interest expenses from convertible bonds in 2024. The interest income for the current period was 4,925,309.76 yuan, far exceeding interest expenses (none), indicating improved capital utilization efficiency.

R&D Expenses: Decreased by 8.24%, Focusing on Core Areas

R&D expenses were 57,209,256.09 yuan, a year-on-year decrease of 8.24%, due to a decline in employee compensation for R&D personnel. However, the company continues to focus R&D investment on core technologies, with multiple new products launched throughout the year, such as hydrogen peroxide sterilization biological indicator resistance instruments and rapid microbiological testing analyzers, breaking foreign technology monopolies and consolidating the leading position in the industry.

R&D Personnel Situation

In 2025, there were 216 R&D personnel, a year-on-year decrease of 4.00%, accounting for 27.34% of the total number of employees. In terms of educational background, there were 43 master’s degree holders, a year-on-year increase of 10.26%; and 0 PhD holders, a year-on-year decrease of 100%. In terms of age structure, there were 81 people under 30, a year-on-year decrease of 27.03%; and 112 people aged 30-40, a year-on-year increase of 21.74%. The R&D team is becoming younger and more educated, with core R&D personnel remaining stable, continuously empowering technological innovation.

Cash Flow Interpretation

Operating Activity Cash Flow: Net Increase of 93.55%, Enhanced Self-Generation Capacity

The net cash flow from operating activities was 47,722,009.44 yuan, a year-on-year increase of 93.55%, mainly due to a decrease in cash paid for purchasing goods, accepting services, and paying employee compensation. Cash inflow from operating activities was 355,762,860.49 yuan, basically flat; cash outflow was 308,040,851.05 yuan, a year-on-year decrease of 6.95%, indicating effective cost control and a significant enhancement in the main business’s self-generation capacity.

Investment Activity Cash Flow: Net Amount Turned Positive, Flexible Capital Allocation

The net cash flow from investment activities was 2,402,615.16 yuan, turning positive from -42,380,363.58 yuan year-on-year, mainly due to an increase in the maturity of time deposits and financial principal. Investment inflow was 1,250,388,212.49 yuan, a year-on-year increase of 76.57%; outflow was 1,247,985,597.33 yuan, a year-on-year increase of 66.28%, with the company flexibly allocating idle funds to balance liquidity and profitability.

Financing Activity Cash Flow: Net Decrease of 289.23%, Adjustment of Financing Structure

The net cash flow from financing activities was -40,724,869.94 yuan, a year-on-year decrease of 289.23%, mainly due to an increase in cash paid for distributing dividends, profits, or paying interest, as well as cash paid for other financing activities. The financing inflow for the current period was 11,174,000.00 yuan, a year-on-year decrease of 28.58%; outflow was 51,898,869.94 yuan, a year-on-year increase of 98.78%, indicating that the company is reducing external financing and optimizing its capital structure.

Potential Risks

2. Industry Policy Change Risk: Adjustments in regulatory policies for the pharmaceutical manufacturing industry may affect demand for pharmaceutical equipment. If the company cannot promptly optimize products in line with policy changes, market competitiveness will weaken. Response: Strengthen policy research, diversify market layout, and expand overseas markets to mitigate risks.
3. Risk of Personnel Loss and Technology Leakage: Increased industry competition may lead to the loss of core technical personnel, affecting R&D progress. Response: Improve talent incentive mechanisms, optimize the work environment, and enhance the stability of technical personnel.
4. Risk of New Product and Technology Development: R&D of new products requires significant investment and long cycles. If R&D fails or industrialization does not meet expectations, it could lead to losses. Response: Continuously increase R&D investment, focus on core fields, and strengthen industry-university-research cooperation to reduce R&D risks.
5. Insufficient Market Expansion of New Products and Intensified Market Competition Risk: Insufficient market recognition for new products or low-price competition from competitors may affect market share. Response: Develop precise marketing strategies, enhance brand influence, and strengthen technological innovation to build barriers.
6. Risk of Control by Actual Controllers: The high shareholding ratio of actual controllers may affect the independence of corporate governance. Response: Improve the corporate governance structure, strengthen independent director supervision, and safeguard the rights of minority shareholders.

Executive Compensation Interpretation

During the reporting period, Chairman and General Manager Ye Dalin received a total pre-tax compensation of 1.4073 million yuan, showing a year-on-year increase; Director and Deputy General Manager Xia Xinqun received 1.3904 million yuan, and Shen Zhiling received 1.4835 million yuan; Board Secretary and CFO Ye Xingyue received 933,800 yuan. The compensation of directors, supervisors, and senior executives is linked to the company’s performance, reflecting the contribution of the core management team to the company’s development. Additionally, the company has established employee stock ownership plans and other incentive mechanisms to align the interests of the core team.

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