*ST Huarong Responds to Shanghai Stock Exchange Regulatory Letter: 2025 Revenue Growth of 63% Year-over-Year; New Information Business Revenue Exceeds 35 Million Yuan

Log in to Sina Finance App and search for [Information Disclosure] to see more evaluation levels.

Hubei Huarong Holdings Co., Ltd. (Stock abbreviation: *ST Huarong, Stock code: 600421) issued a notice on March 19th, replying to the regulatory letter from the Shanghai Stock Exchange regarding the company’s 2025 performance forecast. The announcement shows that the company expects to achieve operating revenue of 191 million yuan in 2025, a year-on-year increase of 63.33%; net profit attributable to the parent of 6.5 million to 8 million yuan, with non-recurring net profit of 6 million to 7.5 million yuan, turning from loss to profit compared to the previous year.

According to the reply, the revenue growth in 2025 is mainly due to the recovery of traditional businesses and contributions from new information-related businesses. Among them, the revenue of the controlling subsidiary Zhejiang Zhuangchen Construction Technology Co., Ltd. increased by about 30% year-on-year, and the new information business achieved revenue of 32.71 million yuan, accounting for 17.09% of total revenue.

Revenue and Gross Margin by Business Segment

The company’s main business segments’ revenue, costs, and gross margins in 2025 are as follows:

The company states that gross margins for traditional businesses such as molds, wind power hybrid tower molds, trusses, and floor decks declined year-on-year mainly due to intensified market competition leading to lower sales prices. Specifically, mold sales prices decreased by about 14%, wind power hybrid tower molds by about 16.64%, and trusses and floor decks by about 9.59%. The gross margin of mould bases increased by 12 percentage points, mainly because this year’s mould base customers are export traders with higher prices.

The new information and engineering-related business has a gross margin of 26.91%, mainly from data center system integration projects. The company states that this business’s pricing is based on market prices negotiated by both parties, with gross margins in the comparable industry range of 11%-46%, slightly below the industry average of 28.70%, mainly because the company is new to this field.

Top Ten Suppliers and Customers

Main Suppliers

The top ten suppliers for the company’s mold, wind power hybrid tower mold, mould base, truss, and floor deck businesses purchased a total of 106.5864 million yuan, with Hangzhou Xiaowu Steel Co., Ltd., Zhejiang Hongfu Supply Chain Management Co., Ltd., and Zhixinhe (Shanghai) Supply Chain Management Co., Ltd. being the top three, with purchase amounts of 32.1436 million, 13.7073 million, and 13.5771 million yuan respectively. Among these, five suppliers are new in 2025, none are related parties, and their purchase amounts match their operational scale.

For the information technology and engineering services, four suppliers were added in 2025, with total purchases of 23.4823 million yuan, all paid in full. The main supplier is China KeKong Information Industry Co., Ltd., with a purchase amount of 19.4292 million yuan.

Main Customers

The top ten customers for the mold business had total sales of 33.1024 million yuan, with Zhejiang Yike Construction Technology Development Co., Ltd., Zhejiang Xingtu Bridge Equipment Manufacturing Co., Ltd., and China Railway No. 3 Bureau Group Co., Ltd. being the top three, with sales of 8.5208 million, 5.8566 million, and 4.0147 million yuan respectively. Among these, two customers are new in 2025, and four are related parties.

For wind power molds, the top ten customers’ sales totaled 57.9131 million yuan, with Shanghai Fengling New Energy Co., Ltd., Shanghai Electric Research Concrete (Mulei) Construction Technology Co., Ltd., and Xingtai Tianshan Wind Power Technology Co., Ltd. being the top three, with sales of 11.1741 million, 8.3593 million, and 5.8175 million yuan respectively. Seven of the top ten customers are new in 2025, all non-related parties.

The information and engineering business has only one customer, Sugon Government Affairs Technology Co., Ltd., with sales of 32.6652 million yuan, a new non-related customer in 2025.

Some customers have delayed payments beyond contract terms. The company explains this is mainly due to tight downstream industry funds, longer payment processes for central and state-owned enterprise customers, and the construction cycle of the wind power industry. However, overall customer credit is good, and accounts receivable collection risks are controllable.

Information Business Has Commercial Substance; Sustainability to Be Observed

Regarding the new information business, the company states that it is a new growth driver cultivated to break through existing growth bottlenecks. In November 2025, the company undertook a system integration project for the “AI Government Affairs Intelligent Agent,” generating revenue of 32.6652 million yuan with a gross margin of 26.90%. The company has assembled a professional team of nearly 20 members capable of independent operations and holds three related copyrights, with two invention patents pending.

The company claims that this project has a real business background and commercial substance. Currently, it is actively expanding new supporting projects for computing centers and maintenance services, with some contracts signed. After verification by auditors, no evidence was found that this business lacks commercial substance, but its sustainability and whether it constitutes non-recurring gains and losses require further observation based on ongoing business development.

Profit Turnaround Mainly Due to Business Growth and Cost Control

The company turned profitable in 2025 mainly due to significant revenue growth and effective cost control. Total period expenses were 20.4389 million yuan, down 4.90% year-on-year, with management expenses down 21.14%, mainly due to executive personnel changes and staff reduction. Financial expenses increased by 57.33%, mainly due to interest on new borrowings.

The company also disclosed impairment provisions for various assets. As of the end of 2025, accounts receivable balance was 114.8818 million yuan, with a provision for bad debts of 7.6081 million yuan; inventory balance was 13.7678 million yuan, with an impairment provision of 625,000 yuan. Auditors found no evidence of revenue or cost manipulation to avoid delisting indicators, and the matching of operating cash flow and net profit is consistent with industry norms.

The company reminds investors that the designated disclosure media are Securities Times, China Securities Journal, and the Shanghai Stock Exchange website. Information disclosed in these media shall prevail. Please be aware of investment risks.

Click to view the original announcement>>

Disclaimer: The market involves risks; investment should be cautious. This article is automatically published by an AI large model based on third-party databases and does not represent Sina Finance’s views. All information herein is for reference only and does not constitute personal investment advice. Please refer to actual announcements for any discrepancies. For questions, contact biz@staff.sina.com.cn.