Juchen Co., Ltd. 2025 Annual Report Analysis: Revenue increased by 18.77% to 1.221 billion yuan, R&D investment rose by 18.34% year-on-year to 208 million yuan

Operating Revenue: Growth Driven by High-Value-Added Products, Offsetting Volatility in Consumer Electronics

In 2025, the company achieved operating revenue of 122,128.36 million yuan, up 18.77% year over year. The growth was mainly attributable to the rapid increase in sales revenue from DDR5 SPD chips, automotive-grade EEPROM chips, and high-performance industrial-grade EEPROM chips, which effectively offset the impact of the decline in traditional business performance caused by fluctuations in market demand for consumer electronics.

In terms of business mix:

• Memory Chips: Revenue was 106,949.86 million yuan, up 20.71% year over year; gross margin was 62.31%, up 2.08 percentage points year over year. This was the core driver of revenue growth. Among them, DDR5 SPD chips benefited from the replacement cycle of memory modules as well as growing demand for AI servers and AI PCs, with sales volume and revenue rising rapidly. Automotive-grade and industrial-grade storage chips continued to penetrate the automotive electronics and industrial control sectors, delivering rapid revenue growth.
• Mixed-Signal Chips: Revenue was 11,392.19 million yuan, up 8.49% year over year; gross margin was 22.45%, up 3.15 percentage points year over year. Optical image-stabilization camera motor driver chips were adopted in commercial mainstream mid-to-high-end models, becoming a new growth driver, which to a certain extent offset the performance impact brought by a downturn in consumer-electronics demand for open-loop motor driver chips.
• NFC Chips and Others: Revenue was 3,786.32 million yuan, increasing only 1.57% year over year; gross margin was 20.24%, down 5.66 percentage points year over year, indicating relatively weak business growth.

Net Profit and Profit After Non-Recurring Items: Ongoing Improvement in Profitability

In 2025, the company’s net profit attributable to shareholders of listed companies was 36,357.60 million yuan, up 25.25% year over year; the net profit attributable to shareholders of listed companies after deducting non-recurring gains and losses was 33,086.04 million yuan, up 25.37% year over year. The net profit growth rate exceeded the revenue growth rate, mainly due to an increase in overall gross margin of 2.48 percentage points to 57.29% driven by product mix optimization.

Regarding non-recurring gains and losses, the amount in 2025 was 3,271.57 million yuan. It mainly included gains and losses from the disposal of non-current assets of 61.3 thousand yuan, government subsidies recognized in profit or loss for the period of 313.01 million yuan, and fair value changes and disposal gains/losses on financial assets of 3,324.11 million yuan, among others.

Earnings Per Share: Slight Dilution from Share Capital Expansion, While Earnings Quality Continues to Improve

In 2025, basic earnings per share were 2.30 yuan per share, up 25.00% year over year; basic earnings per share after deducting non-recurring gains and losses were 2.09 yuan per share, up 25.15% year over year. During the reporting period, the company’s total share capital increased from 157.7185 million shares at the beginning of the period to 158.2710 million shares at the end of the period due to the vesting of restricted stock under its restricted stock incentive plan. The expansion of share capital caused a slight dilution to earnings per share, but the rapid growth in net profit still drove a significant increase in earnings per share.

Expenses: Clear Divergence in Structure, R&D Spending Hits a Record High

In 2025, the company’s total period expenses were 315,233.66 million yuan, up 9.04% year over year. Specifically, expense items showed a differentiated pattern:

R&D Personnel Profile: Team Size Expands, Compensation Remains Competitive

In 2025, the number of R&D personnel reached 200, up 22 from the previous year. The proportion of R&D personnel in the company’s total headcount was 56.82%, up 1.54 percentage points year over year. The total compensation for R&D personnel was 9,633.45 million yuan. The average compensation per R&D personnel was 481.7 thousand yuan per person, roughly flat compared with 479.9 thousand yuan per person in the prior year, maintaining competitiveness in compensation for R&D talent.

In terms of educational background, among R&D personnel there were 4 PhD graduate students, 79 master’s degree holders, and 109 undergraduate degree holders. The proportion of high-education talent was 96%, providing talent support for the company’s ongoing technological innovation.

Cash Flow: Operating Cash Flow Grows Significantly, Net Investing Cash Flow Narrows

In 2025, the company’s cash flow overall showed a healthy trend. The three major cash flow items performed as follows:

Potential Risks Ahead: Multiple Challenges Need to Be Monitored Closely

Risk of Core Competitiveness

2. Risk of Intensifying Market Competition: International giants still have advantages in terms of funding and overseas channels. Domestic competitors’ low-price competition may lead to product price decreases and a reduction in industry profits.
3. Risk of Technological Upgrades and Iterations: The integrated circuit industry updates technology quickly. If the company’s technological upgrades do not meet expectations, it will affect product competitiveness and cause the company to miss market opportunities.
4. Risk of R&D Failure: New product R&D involves uncertainty. If the R&D direction is misjudged, key technologies are not breakthrough, or the product is not recognized by the market, the early-stage R&D investment will be difficult to recoup.
5. Risk of Talent Loss: Talent competition in the industry is intense. If large numbers of technical personnel leave, it will have an adverse impact on the company’s ongoing R&D projects and operations.

Operating Risks

2. Risk of Raw Material Supply and Outsourced Processing: The company adopts a fabless model, and the concentration of wafer suppliers is relatively high. If suppliers face capacity constraints, raise prices, or if cooperation relations become tense, it will affect product production and profitability.
3. Risk of Business Promotion: Changes in customer demand may lead to reduced product purchasing volumes. If business promotion is not smooth, it will adversely affect sales and performance.
4. Risk of Product Price Decline: The industry’s products are updated and replaced quickly. Coupled with downstream demand for cost control and intensifying competition, the company’s product prices may decline, compressing profit margins.

Financial Risks

2. Risk of Inventory Price Decline: As the scale of inventory rises with business expansion, if market demand forecasts are inaccurate, inventory turnover may decline and inventory price decline provisions may need to be accrued.
3. Risk of Bad Debts in Accounts Receivable: As the scale of accounts receivable increases with revenue growth, if the operating conditions of major customers deteriorate, accounts receivable may not be collected in full on schedule.

Risks Related to the Industry and Macroeconomic Environment

2. Risk of Industry Volatility: The integrated circuit industry has cyclical capacity fluctuations. If demand in downstream application markets undergoes dramatic changes, it will affect the company’s business development.
3. Risk of Trade Friction: Uncertainty in the international trade environment is increasing. If trade protectionism intensifies, it may lead to restrictions on the company’s business, or constrain suppliers’ deliveries or customers’ purchasing.
4. Risk of Changes in Tax Preferential Policies: The company currently enjoys a 10% enterprise income tax preferential rate. If tax policies change or the preferential treatment cannot be maintained, it will affect profitability.
5. Risk of Exchange Rate Fluctuations: Overseas business is settled in USD. Significant fluctuations between the RMB and the USD may result in exchange gains or losses, affecting profit stability.

Compensation of Directors, Supervisors, and Senior Executives: Compensation of Core Management Linked to Performance

In 2025, the total pre-tax remuneration received by the company’s chairman, Chen Zuotao, from the company during the reporting period was 3,000.00 thousand yuan; the total pre-tax remuneration received by the general manager, Zhang Jianshen, was 4,666.2 thousand yuan; the total pre-tax remuneration received by the deputy general manager, Yang Yi, was 1,296.6 thousand yuan; the total pre-tax remuneration received by the deputy general manager, Fu Zhijun, was 1,605.6 thousand yuan. The chief financial officer is concurrently the deputy general manager, Yang Yi, and his total pre-tax remuneration is included in the deputy general manager compensation.

The compensation policies for directors and senior management are formulated based on the company’s actual circumstances and the industry level. Non-independent directors and senior executives receive a basic annual salary and, according to annual performance appraisal results, receive performance-based pay. The appraisal is linked to the company’s achievement of its annual net profit budget as well as team and individual performance, which better balances incentive and constraint mechanisms.

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