Shangwei Co., Ltd. (603333) 2025 Annual Report Brief Analysis: Net Profit Declined 389.38% Year-over-Year, Company's Accounts Receivable Volume Remains Substantial

According to publicly available data compiled by Securities Star, Shangwei Co., Ltd. (603333) recently released its 2025 annual report. As of the end of this reporting period, the company’s total operating revenue was 1.41 billion yuan, a decrease of 18.73% year-over-year, and net profit attributable to shareholders was -47.2932 million yuan, down 389.38% year-over-year. Looking at quarterly data, in the fourth quarter, total operating revenue was 465 million yuan, down 13.41% year-over-year, and net profit attributable to shareholders was -21.6041 million yuan, down 713.81% year-over-year. During this reporting period, Shangwei Co. had a large accounts receivable balance, accounting for 54.53% of the latest annual report’s total operating revenue.

The financial data released this time shows less-than-ideal performance indicators. Among them, gross profit margin was 15.0%, down 19.45% year-over-year; net profit margin was -3.36%, down 464.08% year-over-year; total selling, general, and administrative expenses, as well as financial expenses, amounted to 201 million yuan, with three expenses accounting for 14.25% of revenue, an increase of 12.72% year-over-year; net asset value per share was 3.29 yuan, down 2.26% year-over-year; operating cash flow per share was 0.29 yuan, up 18.08% year-over-year; and earnings per share was -0.08 yuan, a decrease of 366.67% year-over-year.

The explanations for significant changes in financial items in the financial statements are as follows:

1. Sales expenses decreased by 15.56%, mainly due to a decline in operating revenue, which directly affected market development and business expenses.
2. R&D expenses decreased by 20.7%, due to fewer R&D projects and reduced direct materials for R&D.
3. Net cash flow from operating activities increased by 18.08%, mainly because of strengthened collection and management of accounts receivable, with a higher sales collection rate year-over-year.
4. Net cash flow from investing activities increased by 219.85%, mainly because the company acquired a non-controlling subsidiary, leading to increased cash inflows.
5. Net cash flow from financing activities increased by 188.14%, mainly due to an increase in net borrowings.
6. Changes in monetary funds increased by 89.7%, due to improved collection of accounts receivable and the acquisition of a controlling subsidiary, Sichuan Zhongfu Taihua.
7. Changes in trading financial assets decreased by 90.99%, mainly because of redemption of floating income certificates and financial products at maturity.
8. Changes in notes receivable decreased by 42.15%, due to a decline in revenue and corresponding reduction in bank acceptance bills from “A+H” banks.
9. Changes in accounts receivable financing decreased by 33.89%, mainly due to reduced revenue and fewer “A+H” bank acceptance bills.
10. Prepaid expenses decreased by 48.78%, mainly because of lower payments of copper deposit guarantees to suppliers at the end of the period.
11. Other receivables increased by 48.15%, mainly due to an increase in receivables related to bid and performance guarantees.
12. Other current assets increased by 459.88%, mainly because of the acquisition of the controlling subsidiary Sichuan Zhongfu Taihua, which is in the construction period, leading to increased input tax credits.
13. Investment properties decreased by 34.11%, mainly due to disposal of some investment properties.
14. Construction in progress increased by 5523.37%, mainly because of the acquisition of Sichuan Zhongfu Taihua.
15. Right-of-use assets decreased by 93.16%, mainly due to reduction in leased assets.
16. Intangible assets increased by 310.52%, mainly because of the acquisition of Sichuan Zhongfu Taihua, which increased land use rights.
17. Long-term deferred expenses increased by 148.38%, mainly due to increased amortizable renovation costs from the acquisition of Sichuan Zhongfu Taihua.
18. Deferred tax assets increased by 126.45%, mainly because of the acquisition of Sichuan Zhongfu Taihua, leading to increased deferred income and temporary differences.
19. Other non-current assets increased by 4355.24%, mainly due to increased project prepayments and equipment prepayments from the acquisition of Sichuan Zhongfu Taihua.
20. Notes payable decreased by 100%, due to maturity and repayment.
21. Accounts payable increased by 48.38%, mainly because of increased payables to suppliers after acquiring Sichuan Zhongfu Taihua.
22. Contract liabilities increased by 234.04%, mainly due to increased prepayments received related to contracts.
23. Taxes payable increased by 62.65%, mainly because of increased income tax payable after acquiring Sichuan Zhongfu Taihua.
24. Other payables increased by 343.26%, mainly due to increased payables to shareholders and related companies after the acquisition.
25. Non-current liabilities due within one year decreased by 89.09%, mainly because of repayment of long-term borrowings due within one year.
26. Long-term borrowings increased by 746.8%, mainly due to increased long-term project loans after acquiring Sichuan Zhongfu Taihua.
27. Lease liabilities decreased by 99.08%, mainly due to reduction in leased properties.
28. Deferred income increased by 185.29%, mainly because of increased government grants related to assets received after the acquisition of Sichuan Zhongfu Taihua.
29. Other comprehensive income increased by 53.86%, mainly due to increased fair value of other equity investments.
30. Minority shareholders’ equity increased by 27,968.15%, mainly because of the acquisition of Sichuan Zhongfu Taihua, which increased minority interests.
31. Operating revenue decreased by 18.73%, mainly because of the control rights change triggered by the judicial auction of most shares held by the company’s former actual controller and its concerted parties in the first half of the year. The company faces phased challenges in operations, project advancement, and team building. Additionally, macroeconomic changes, intensified competition in the wire and cable industry, and sustained high copper prices have led downstream customers to reduce procurement willingness, resulting in a cautious market and a decline in revenue.
32. Operating costs decreased by 15.12%, mainly due to the decline in operating revenue.

Securities Star’s valuation analysis tools indicate:

• Business Evaluation: The net profit margin last year was -3.36%, indicating low added value of the company’s products or services after all costs. Historically, the median ROIC over the past 10 years is 1.23%, showing weak investment returns, with the worst year in 2016 at -4.57%. The company’s financial performance has been generally average, with 13 annual reports since listing, including 4 loss years. Without shell listing or similar factors, value investors typically avoid such companies.

• Debt-paying ability: The company’s cash assets are very healthy.

• Business breakdown: Over the past three years (2023/2024/2025), net operating asset returns were 1.1%, 0.9%, and --, with net operating profits of 19.9616 million, 15.9995 million, and -47.3389 million yuan, respectively. Net operating assets were 1.808 billion, 1.762 billion, and 2.312 billion yuan.

  The company’s working capital/revenue ratios over these three years are 0.71, 0.76, and 0.73, with working capital of 1.571 billion, 1.323 billion, and 1.023 billion yuan, and revenues of 2.207 billion, 1.735 billion, and 1.41 billion yuan.

Financial health check tools suggest:

1. Pay attention to the company’s cash flow status (average operating cash flow over the past 3 years / current liabilities only 18.07%).
2. Monitor the company’s debt situation (interest-bearing debt ratio has reached 28.92%).

The above content is compiled by Securities Star from publicly available information, generated by AI algorithms (Wangxin Calculation Backup 310104345710301240019), and does not constitute investment advice.