Eagle Eye Warning: Xinli Financial's Net Profit Diverges from Net Cash Flow from Operating Activities

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

On March 25th, Xinli Financial released its 2025 annual report.

The report shows that the company’s total operating revenue for 2025 is 352 million yuan, a year-on-year increase of 12.3%; net profit attributable to parent company is 35.6777 million yuan, up 14.49% year-on-year; non-recurring net profit attributable to parent is 34.4796 million yuan, up 14.62% year-on-year; basic earnings per share are 0.07 yuan/share.

Since its listing in December 2000, the company has paid cash dividends 9 times, with a total cash dividend of 143 million yuan.

The listed company financial report Eagle Eye warning system performs intelligent quantitative analysis of Xinli Financial’s 2025 annual report from four dimensions: performance quality, profitability, capital pressure and safety, and operational efficiency.

1. Performance Quality Level

During the reporting period, the company’s revenue was 352M yuan, an increase of 12.3% year-on-year; net profit was 97.3064 million yuan, up 3.38%; net cash flow from operating activities was -2.08 billion yuan, down 186.87% year-on-year.

From the overall performance perspective, key points to monitor:

• The growth rate of non-recurring net profit attributable to parent is significantly lower than the industry average. During the reporting period, non-recurring net profit attributable to parent increased by 14.62% year-on-year, below the industry average of 33.58%, with a deviation of over 50%.

From revenue, cost, and period expenses ratio analysis, key points to monitor:

• The variation in sales expenses differs greatly from the change in operating revenue. During the reporting period, operating revenue increased by 12.3% year-on-year, while sales expenses increased by 54.17%, showing a large discrepancy.

Regarding cash flow quality, key points include:

• Divergence between operating revenue and net cash flow from operating activities. During the period, revenue increased by 12.3% year-on-year, but net cash flow from operating activities decreased by 186.87%, showing a divergence.

• Divergence between net profit and net cash flow from operating activities. During the period, net profit was 100 million yuan, while net cash flow from operating activities was -210 million yuan, showing a divergence.

• The ratio of net cash flow from operating activities to net profit is less than 1. During the period, this ratio was -2.142, indicating weak earnings quality.

2. Profitability Level

During the reporting period, the company’s gross profit margin was 80.86%, a decrease of 1.02% year-on-year; net profit margin was 27.61%, down 7.94%; weighted return on equity (ROE) was 3.32%, an increase of 11.78%.

From the company’s operational earnings perspective, key points to monitor:

• Continuous decline in gross profit margin. Over the past three annual reports, gross profit margins were 82.33%, 81.69%, and 80.86%, showing a persistent downward trend.

• Gross profit margin is significantly higher than the industry average. During the reporting period, gross profit margin was 80.86%, above the industry average of 49.72%, with a deviation of over 50%.

• The decline in gross profit margin diverges from industry trends. During the period, gross profit margin decreased from 81.69% to 80.86%, while the industry gross profit margin increased from 32.33% to 49.72%.

• Fluctuations in net profit margin. During the period, the company’s quarterly net profit margins were 42.69%, -6.62%, -1.23%, -7.24%, with year-on-year changes of 5.69%, 13.16%, -305.14%, and 40.49%, showing volatility.

• Gross profit margin exceeds industry average, but net profit margin is below industry average. During the period, gross profit margin was 80.86%, above the industry average of 49.72%; net profit margin was 27.61%, below the industry average of 30.09%.

From the company’s asset side, earnings need close attention:

• The average return on net assets over the past three years is below 7%. During the period, the weighted average ROE was 3.32%, with an average below 7% over the last three fiscal years.

• ROE is significantly below the industry average. During the period, the weighted average ROE was 3.32%, below the industry average of 26.69%, with a deviation over 50%.

• Return on invested capital is below 7%. During the period, the company’s return on invested capital was 2.36%, with an average below 7% over the three periods.

3. Capital Pressure and Safety

During the period, the company’s asset-liability ratio was 52.32%, an increase of 9.01% year-on-year; current ratio was 1.52, quick ratio was 1.52; total debt was 140M yuan, with short-term debt of 240M yuan, accounting for 55.92% of total debt.

From short-term capital pressure, key points to monitor:

• Large short-term debt, capital gap exists. During the period, broad monetary funds were 310 million yuan, short-term debt was 208M yuan, and broad monetary funds/short-term debt was 0.3, with funds below short-term debt.

• Significant short-term debt pressure, capital chain under stress. During the period, broad monetary funds were 310 million yuan, short-term debt was 140M yuan, net cash flow from operating activities was -210 million yuan, and there are gaps between short-term debt, financial expenses, monetary funds, and operating cash flow.

• Cash ratio less than 0.25. During the period, the cash ratio was 0.15, below 0.25.

From long-term capital pressure, key points include:

• The ratio of total debt to net assets continues to rise. Over the last three annual reports, total debt/Net assets ratios were 66.67%, 74.95%, and 88.65%, showing a steady increase.

• The cash coverage ratio of total debt is decreasing. Over the last three periods, broad monetary funds/total debt ratios were 0.36, 0.26, and 0.17, declining steadily.

From capital management perspective, key points to monitor:

• Interest income / monetary funds ratio less than 1.5%. During the period, monetary funds were 190 million yuan, short-term debt was 1.58B yuan, and the average interest income/monetary funds ratio was 0.108%, below 1.5%.

• Total debt / total liabilities ratio >20%, interest expense / net profit >30%. During the period, total debt/total liabilities was 80.8%, interest expense as a percentage of net profit was 31.73%, indicating significant impact on operations.

• Large changes in prepayment accounts. During the period, prepayment was 341k yuan, a change rate of 37.54% from the beginning of the period.

• Prepayment / current assets ratio continues to grow. Over the last three annual reports, prepayment/current assets ratios were 0.01%, 0.01%, and 0.02%, showing a steady increase.

• Growth rate of prepayment exceeds that of operating costs. During the period, prepayment increased by 37.54% from the beginning, while operating costs grew by 17.4%, indicating a faster increase in prepayment.

From capital coordination perspective, key points to monitor:

• Capital coordination exists but payment difficulties remain. During the period, operating capital was 690 million yuan, with a demand of 1.04 billion yuan; the funds from investment and financing activities cannot fully cover the company’s operating needs, with cash payment capacity at -350 million yuan.

4. Operating Efficiency

During the period, accounts receivable turnover was 48.98 times, an increase of 4.29%; total asset turnover was 0.08, up 7.07%.

From long-term assets perspective, key points to monitor:

• Total asset turnover is significantly below industry average. During the period, the ratio was 0.08, below the industry average of 0.24, with a deviation over 50%.

• Long-term deferred expenses fluctuate greatly from the beginning of the period. During the period, long-term deferred expenses were 549k yuan, a 161.7% increase from the beginning.

From the three expense categories, key points to monitor:

• Sales expenses growth exceeds 20%. During the period, sales expenses were 1.48 million yuan, up 54.17%.

Click on Xinli Financial 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 company 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 prompts for potential financial risks. It offers professional, efficient, and convenient technical solutions for financial institutions, listed companies, and regulatory authorities to identify and warn of financial risks.

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