Shandong Molong's revenue is projected to grow by 29.88% in 2025, with net profit attributable to shareholders turning profitable after losses.

Ask AI · Shandong Molong turned a loss into a profit thanks to non-recurring gains and losses—when can profits from the core business become stable?

Blue Whale News, March 31—On March 31, Shandong Molong disclosed its 2025 annual report. The company achieved operating revenue of RMB 1.761 billion, up 29.88%; net profit attributable to shareholders amounted to RMB 0.05 billion, turning from a loss to a profit year over year, with an increase of 111.80%. However, it should be noted that this profit mainly depends on support from non-recurring gains and losses. After removing the above effects, the net profit after deducting non-recurring gains and losses was -0.28 yuan; although it narrowed the loss compared with 2024 by 91.13%, it still remained in a net loss position. The financial report’s statement that “profitability has significantly improved” is based on improvements in operating indicators such as gross margin, rather than a fundamental turnaround of the overall profit structure.

An increase in gross margin is the core highlight of operational improvement. In 2025, the company’s consolidated gross margin was 9.97%, up 5.93 percentage points year over year, the highest level in recent years, reflecting that the company has achieved phased results in cost management or product-mix optimization.

Research and development (R&D) spending grew by 59.30% year over year, but the number of R&D personnel fell by 8.64% year over year, indicating that resource input is becoming more concentrated and efficient. Selling expenses rose by 8.37% year over year, significantly lower than the revenue growth rate, and the pace of expense control has continued to be better than the pace of business expansion. The revenue mix further shifted toward tube-type products, whose revenue accounted for 94.13% of total revenue; the revenue share of three-pump equipment was 1.67%. Together, the two accounted for 95.80% of total operating revenue. By region, domestic revenue accounted for 65.30%, while overseas revenue accounted for 34.70%. Compared with the past, the share of overseas market revenue has increased noticeably, and the regional layout shows a trend of giving equal weight to both domestic and international markets.

By the end of 2025, the company’s asset-liability ratio was 81.45%, and the current ratio was 1.01, nearing the warning level. The balance of short-term borrowings was RMB 1.351 billion, and non-current liabilities due within one year were RMB 0.38 billion, while the balance of long-term borrowings was zero. The debt structure shows a clearly short-term bias. Finance costs decreased by 2.36% year over year to RMB 0.94 billion, but the high scale of short-term debt combined with the relatively low current ratio has kept the company’s short-term debt-servicing ability under ongoing pressure.

In terms of business synergy and asset integration, during the reporting period the company added a subsidiary, Shandong Xincheng, and included it in the consolidated scope, with a shareholding ratio of 71.6%, expanding the boundaries of its asset and business coverage. The controlling shareholder, Shouguang Molong Holdings Co., Ltd., held 29.53%; the actual controller is still the Shouguang Municipal State-owned Assets Supervision and Administration Commission, so the control structure has not changed. Regarding capital operations, the company implemented a transfer of creditor’s rights together with debt restructuring, completing the transfer of RMB 169 million in creditor’s rights related to Shouguang Baolong. It also signed a tripartite agreement with Huarong Agriculture and the Produce Wholesale Company, using assets to offset RMB 361 million in debt; the relevant assets have completed the ownership transfer. The subsidiary Shouguang Baolong has entered bankruptcy liquidation proceedings; as of the end of the reporting period, the outstanding balance of claims was RMB 292 million.

It is worth noting that although the company achieved a full-year turnaround in net profit attributable to shareholders, the net profit attributable to shareholders was -RMB 275,000 for the fourth quarter alone, and non-recurring gains and losses adjusted net profit was -0.21 yuan, indicating that the profit base of the core business is still relatively weak. Although tube-type products are the absolute dominant business, generating revenue of RMB 1.658 billion in 2025 and accounting for 94.13% of total revenue, their industry characteristics mean performance is prone to being affected by the timing of downstream infrastructure investment, fluctuations in raw material prices, and changes in regional market demand. The increased share of overseas revenue brings additional incremental volume, while also increasing uncertainties such as exchange rates, geopolitical factors, and compliance management.