Haishun New Materials 2025 Annual Report Analysis: Deducted Non-Recurring Net Profit Decreased by 167.22% Year-over-Year, Financial Expenses Increased by 38.78%

In-Depth Interpretation of Core Profitability Indicators

Operating Revenue: Business Structure Divergence Behind the Slight Decline

In 2025, the company achieved operating revenue of 1.105 billion yuan, a year-over-year decrease of 3.30%. By business segment, revenue from the core new pharmaceutical packaging materials business was 986 million yuan, down 6.02%, which was the main drag on the decline in revenue; meanwhile, revenue from other businesses was 119 million yuan, up 27.04%, becoming a highlight in the business mix.

From a product perspective, flexible packaging revenue was 727 million yuan, down 7.63%, and its share of revenue decreased from 68.89% to 65.81%; rigid packaging revenue was 349 million yuan, up 4.53%, and its share increased from 29.20% to 31.57%, showing a trend of rigid packaging growing against the market.

Net Profit: From Profit to Loss, Non-Recurring Gains and Losses Becoming a “Buffer Pad”

In 2025, the net profit attributable to shareholders of the listed company was -23.2669 million yuan, down 131.19% year over year, marking the first annual loss. Net profit after deducting non-recurring gains and losses was -46.7988 million yuan, down significantly by 167.22% year over year, indicating a clear deterioration in core profitability.

Non-recurring gains and losses became an important buffer for this period’s profit. The full-year net amount of non-recurring gains and losses was 23.5319 million yuan, mainly from investment income from stocks and wealth management products of 21.1257 million yuan, gains from equity transfer of an associated company of 9.0039 million yuan, etc. If this portion of gains is excluded, the scale of losses in the company’s core business would expand further.

Earnings Per Share: From Positive to Negative, Decline in Profit Quality

Basic earnings per share were -0.13 yuan/share, down 133.33% year over year; earnings per share after deducting non-recurring items were -0.25 yuan/share, down 166.67% year over year. The sharp drop in earnings per share directly reflects the worsening of the company’s profit quality and also creates pressure on the stock price.

Expenses: Financial Expenses Soar, Eroding Profit Margin

Total Expenses: Up 10.78% YoY, Profit Space Continues to Compress

In 2025, the company’s total four expense items amounted to 244.157 million yuan, an increase of 23.8663 million yuan compared with 2024, up 10.78% year over year, further squeezing profit margin. Among them:

• Selling expenses: 59.8629 million yuan, up 4.39% year over year, mainly due to increases in marketing expenses, business entertainment expenses, and so on.
• Administrative expenses: 86.2592 million yuan, up 7.40% year over year, mainly due to increases in staff compensation, depreciation and amortization, etc.
• Financial expenses: 42.0617 million yuan, up significantly by 38.78% year over year, mainly due to decreases in interest income and increases in interest expenses; interest expenses rose from 10.0603 million yuan to 12.5337 million yuan, and interest income dropped from 12.6384 million yuan to 1.9154 million yuan.
• R&D expenses: 55.9719 million yuan, up 6.98% year over year. The company continues to invest in R&D, with the ratio of R&D investment to revenue increasing from 4.58% to 5.07%.

R&D Personnel: Team Expansion, Strengthening the Technical Foundation

In 2025, the company’s number of R&D personnel reached 152, up 11.76% year over year. The proportion of R&D personnel increased from 13.36% to 14.04%. In terms of education structure, there were 81 R&D personnel with bachelor’s degree or above, up 9.46% year over year; among them, there were 13 master’s degree holders, up 18.18%. The scale and quality of the R&D team continued to improve, providing talent support for the company’s technological innovation.

Cash Flow: Operating Cash Flow Drops Sharply, Net Cash from Investing Activities Turns Positive

Net Cash Flow from Operating Activities: Net Amount Plunges by 40.74%, Collection Pressure Becomes Apparent

In 2025, the net cash flow generated from operating activities was 95.5865 million yuan, down 40.74% year over year. The main reasons are that cash received from sales of goods and provision of services decreased by 6.49% year over year; at the same time, cash received from other cash flows related to operating activities decreased from 618 million yuan to 266 million yuan, while cash paid for other cash flows related to operating activities increased from 911 million yuan to 1,034 million yuan. Reduced cash inflows and increased cash outflows led to a sharp decline in the net amount, reflecting heightened collection pressure and a decline in the quality of operating cash flow.

Net Cash Flow from Investing Activities: Net Amount Turns Positive, Financial Investments Stand Out

The net cash flow generated from investing activities was -5.7891 million yuan, improving significantly by 97.60% year over year, approaching positive territory. The main reason is that cash inflows from investing activities such as selling stocks and funds during the period, redeeming short-term wealth management products, and government bond reverse repurchase transactions surged by 125.62% to 1.126 billion yuan, while investing cash outflows increased only 52.77% to 1.131 billion yuan. Flexible management of financial investments significantly narrowed the net cash outflow.

Net Cash Flow from Financing Activities: Net Amount Improves by 65.75%, Financing Structure Optimized

The net cash flow generated from financing activities was -101.7112 million yuan, improving by 65.75% year over year. The main reasons are that an increase in borrowings led to financing cash inflows rising by 43.64% to 247 million yuan; meanwhile, decreases in repayments of borrowings and decreases in the repurchase of treasury shares reduced financing cash outflows by 25.65% to 349 million yuan. The company’s financing structure has been optimized, and financing pressure has been alleviated to some extent.

Compensation of Directors, Supervisors, and Senior Management: Compensation of Core Managers Shows Divergence

In 2025, the total pre-tax remuneration for the company’s directors, supervisors, and senior management received from the company amounted to 5.7738 million yuan, compared with 6.1325 million yuan in 2024, showing a decrease. Among them:

• Chairman: Huang Qin’s total pre-tax remuneration during the reporting period was 0.3728 million yuan (including 0.3129 million yuan during the tenure as deputy general manager and 0.0599 million yuan during the tenure as chairman), a clear decrease compared with Lin Wuhui’s 0.5613 million yuan in the previous year.
• General Manager: Huang Qin also served as general manager, with the same total pre-tax remuneration of 0.3728 million yuan; last year, Lin Wuhui’s remuneration as general manager was 0.5613 million yuan.
• Deputy General Managers: Chen Ping’s pre-tax remuneration was 0.7803 million yuan; Yang Gaofeng’s was 0.8283 million yuan; Fu Jian’s was 0.1029 million yuan; former deputy general manager Li Jun’s remuneration after leaving office was 0.9497 million yuan. There are significant differences in compensation among the deputy general manager team, and compensation for heads of core business remains at a high level.
• Chief Financial Officer: Ni Hailong’s pre-tax remuneration was 0.3351 million yuan, and his compensation level remained stable.

Risk Warning: Operational Challenges Under Multiple Pressures

Market Competition Risk: Industry Pattern Is Fragmented, Price Wars Intensify

There are many small and medium-sized enterprises in China’s pharmaceutical packaging materials industry, and homogeneous competition is fierce. Downstream pharmaceutical companies are becoming more sensitive to the prices of drug packaging materials. As a result, the company’s gross margin for its flexible packaging business decreased from 28.62% to 20.01%, and its gross margin for rigid packaging decreased from 27.45% to 25.63%. Price competition continues to compress profitability.

Cost Fluctuation Risk: Dual Pressures from Raw Materials and Depreciation

The prices of raw materials required for the company’s production, such as aluminum foil and plastic pellets, fluctuate greatly. At the same time, fixed-asset investment has increased in recent years. In 2025, depreciation expenses increased by 15.72% year over year. Rising production costs further squeeze profits, and if cost pass-through is not smooth, the gross margin will face ongoing downward risk.

Capacity Absorption Risk: Effect of Funded Projects Not Meeting Expectations

Funded projects such as functional polyolefin film materials projects and high-barrier composite materials projects have low capacity utilization rates. In 2025, they incurred losses of 17.8454 million yuan and 24.1390 million yuan respectively. Insufficient capacity release results in greater pressure for fixed-cost allocation. If market expansion does not meet expectations, the risk of capacity absorption will continue to exist.

Foreign Exchange Risk: Overseas Business Affected by Exchange Rates

The company’s overseas business accounts for 10.81% of revenue. At the same time, some raw materials depend on imports. Fluctuations in the RMB exchange rate will directly affect the profitability level of the company’s import and export businesses. In 2025, foreign exchange losses were 1.6489 million yuan, and the disruption of exchange-rate risk to profits cannot be ignored.

Summary and Investment Advice

Haishun New Materials turned from profit to loss in 2025, with a sharp decline in core profitability. High expenses, insufficient capacity utilization, and intensified market competition are the main drag factors. Although the company buffered part of its losses through financial investments and non-recurring gains and losses, and despite the continued expansion of the R&D team, risks such as the deterioration of operating cash flow and the underperformance of funded projects relative to expectations still need to be kept in mind.

For investors, it is necessary to closely monitor the progress of the company’s rigid packaging business expansion, the capacity release of funded projects, cost control measures, and the effectiveness of overseas market expansion. If profitability of the core business cannot improve, the company’s performance may continue to face pressure. It is recommended that investors remain cautious and consider positioning only after the company’s profit turnaround is clear.

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