Eagle Eye Warning: Shenghong Technology's Operating Activities Net Cash Flow to Net Profit Ratio Continues to Decline

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

On March 13, Shenghong Technology released its 2025 annual report, with an audit opinion of standard unqualified opinion.

The report shows that the company’s total operating revenue for 2025 was 19.292 billion yuan, a year-on-year increase of 79.77%; net profit attributable to shareholders was 4.312 billion yuan, up 273.52%; net profit after non-recurring gains and losses attributable to shareholders was 4.304 billion yuan, up 277.07%; basic earnings per share were 5.01 yuan.

Since its listing in May 2015, the company has paid cash dividends 10 times, totaling 1.483 billion yuan. The announcement states that the company plans to distribute a cash dividend of 20 yuan (tax included) for every 10 shares to all shareholders.

The Listed Company Financial Report Eagle Eye Warning System conducts intelligent quantitative analysis of Shenghong Technology’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 19.292 billion yuan, a 79.77% increase; net profit was 4.312 billion yuan, up 273.52%; net cash flow from operating activities was 4.603 billion yuan, an increase of 238.85%.

Overall performance analysis highlights:

• Revenue growth rate has been continuously declining over the last three quarters. During the reporting period, revenue increased by 70.58% year-on-year, with a steady decline in growth rate over the last three quarters.

From the perspective of revenue, costs, and period expenses ratio, key points include:

• Significant difference between changes in operating revenue and operating costs. During the period, revenue increased by 79.77% year-on-year, while operating costs increased by 50.7%, showing a large disparity.

• Large difference between sales expenses and revenue changes. During the period, revenue increased by 79.77%, while sales expenses increased by 28.15%, indicating a significant disparity.

• Divergence between operating revenue and taxes and surcharges. During the period, revenue increased by 79.77%, while taxes and surcharges decreased by 0.54%, showing a divergence.

Regarding operating asset quality:

• Inventory growth exceeds operating cost growth. During the period, inventory increased by 54.61% from the beginning of the period, while operating costs increased by 50.7%, indicating inventory growth outpacing costs.

From cash flow quality perspective:

• Net cash flow from operating activities relative to net profit continues to decline. In the last three half-year reports, the ratio was 1.91, 1.18, and 1.07, showing a downward trend and decreasing profitability quality.

2. Profitability

During the reporting period, the company’s gross profit margin was 35.22%, up 55%; net profit margin was 22.35%, up 107.77%; return on equity (weighted) was 35.56%, up 154.91%.

From the operational perspective:

• Significant increase in gross profit margin. During the period, gross profit margin was 35.22%, a large increase of 55%.

• Continuous growth in gross profit margin and decline in inventory turnover rate. Over the last three annual reports, gross profit margins were 20.7%, 22.72%, and 35.22%, increasing steadily, while inventory turnover rates declined from 5.03, 4.85, to 4.8 times.

3. Capital Pressure and Safety

During the period, the company’s asset-liability ratio was 52.85%, down 1.1%; current ratio was 0.96, quick ratio was 0.74; total debt was 9.747 billion yuan, with short-term debt of 5.88 billion yuan, accounting for 60.32% of total debt.

Long-term capital pressure:

• Short-term debt can be covered by broad monetary funds, but long-term debt cannot. During the period, the ratio of broad monetary funds to total debt was 0.62, with broad monetary funds below total debt.

From a capital management perspective:

• Interest income / monetary funds ratio is less than 1.5%. During the period, monetary funds were 3.28 billion yuan, short-term debt was 2.5 billion yuan, and the average ratio of interest income to monetary funds was 0.992%, below 1.5%.

• Large fluctuation in prepayments. During the period, prepayments were 80 million yuan, with a 127.53% change from the beginning of the period.

• Prepayments grow faster than operating costs. During the period, prepayments increased by 127.53% from the beginning, while operating costs increased by 50.7%, showing prepayments outpacing costs.

• Significant change in other receivables. During the period, other receivables were 350 million yuan, a 191.36% increase from the beginning.

• The ratio of other receivables to current assets continues to rise. Over the last three annual reports, this ratio was 1.02%, 1.5%, and 2.61%.

• Large fluctuation in notes payable. During the period, notes payable were 3.38 billion yuan, a 53.65% change from the beginning.

From capital coordination perspective:

• Capital coordination needs strengthening. During the period, the company’s working capital demand was 750 million yuan, with a negative working capital of 530 million yuan. The company’s cash payment capacity was -1.28 billion yuan.

4. Operating Efficiency

During the period, accounts receivable turnover was 3.95 times, up 30.67%; inventory turnover was 4.8 times, down 0.97%; total asset turnover was 0.71 times, up 20.77%.

Regarding operating assets:

• Inventory turnover rate continues to decline. Over the last three annual reports, inventory turnover was 5.03, 4.85, and 4.8 times, indicating weakening inventory management.

From long-term assets:

• Significant changes in construction in progress. During the period, construction in progress was 3.61 billion yuan, a 1307.16% increase from the beginning.

• Large variation in long-term deferred expenses. During the period, long-term deferred expenses were 210 million yuan, up 100.48%.

• Significant change in other non-current assets. During the period, other non-current assets were 3.3 billion yuan, an 844.44% increase.

From the perspective of the three expenses (selling, administrative, R&D):

• Management expenses growth exceeds 20%. During the period, management expenses were 500 million yuan, up 27.59%.

Click Shenghong Technology Eagle Eye Warning to view the latest warning details and visualized financial report preview.

Sina Finance Listed Company Financial Report Eagle Eye Warning Introduction: The Eagle Eye Warning system is an intelligent professional analysis platform for listed companies’ financial reports. It gathers authoritative financial experts from accounting firms and listed companies 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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Editor: Xiao Lang Kuai Bao