Shenzhen Bestke 2025 Annual Report Interpretation: Net Profit Drops 77.97% Year-over-Year, Financial Expenses Surge 119.65%

Operating Revenue: Slight Decrease of 1.52%, Business Structure Shows Differentiation

In 2025, the company achieved operating revenue of 838.4068 million yuan, down 1.52% year-over-year. Revenue remained relatively stable, but internal business structure showed clear differentiation.

By product, smart controllers, as the core business, saw a 13.80% decline to 514.4741 million yuan, accounting for 61.36% of revenue, down from 70.10% in 2024, becoming the main drag on overall revenue. Meanwhile, smart product business grew rapidly by 47.74%, reaching 207.5104 million yuan, increasing its share to 24.75%, becoming a key growth driver.

Regionally, both domestic and international revenues declined slightly. Domestic revenue was 172.3679 million yuan, down 2.03%; overseas revenue was 666.0389 million yuan, down 1.39%. Overseas business still contributed over 70% of revenue, remaining the main source of income.

Net Profit and Non-Recurring Net Profit: Both Plummeted Over 77%

In 2025, net profit attributable to shareholders of the listed company was 12.174 million yuan, a sharp decrease of 77.97%. Non-recurring net profit was 11.5219 million yuan, down 78.15%, with profit scale significantly shrinking.

The decline in net profit mainly stems from three factors: first, increased asset impairment provisions, including provisions for accounts receivable, inventories, intangible assets, and fixed assets, directly impacting current performance; second, rising period expenses due to increased R&D investment, depreciation, and exchange losses; third, a decrease in overall gross profit margin, with a reduced proportion of high-margin business segments, putting pressure on profitability.

Earnings Per Share: Also Declined Significantly

Basic earnings per share dropped from 0.1780 yuan in 2024 to 0.0393 yuan, a 77.92% decrease. Non-recurring EPS fell from 0.1690 yuan to 0.0372 yuan, with a similar decline, reflecting a significant drop in company profitability.

Expenses: Total Up Year-over-Year, Structural Differentiation Evident

In 2025, total operating expenses amounted to 168,385,935.33 yuan, up 26.23% from 133,398,087.64 yuan in 2024, with notable expense pressure:

R&D Personnel: Decreased in Number but Improved in Education Level

In 2025, R&D staff numbered 317, down 44 from the previous year, a 12.19% decrease. R&D personnel accounted for 14.11% of total staff, down from 14.84%. However, the educational structure improved: bachelor’s degree or above R&D staff increased from 99 to 106 (+7.07%), and master’s degree R&D staff increased from 10 to 17 (+70%), supporting deeper technological development.

Cash Flow: Slight Growth in Operating Cash Flow, Narrower Net Cash Outflows in Investing and Financing

The company’s overall cash flow in 2025 was as follows:

Operating Cash Flow: Slight Increase, Stable Quality

Net cash flow from operating activities increased by 5.39%, mainly due to a slight decrease in cash outflows (down 0.28%) and nearly unchanged inflows (up 0.03%), indicating stable cash collection from daily operations and good cash flow quality.

Investing Cash Flow: Narrower Outflows

Net cash outflow from investing activities narrowed by 53.61%, as cash recovered from investments increased to 1.8571 million yuan, and expenditure on long-term assets decreased from 393.5389 million yuan to 197.5729 million yuan, reflecting a slower investment pace.

Financing Cash Flow: Reduced Outflows

Net cash outflow from financing activities decreased by 28.28%, mainly because cash outflows fell from 472.6806 million yuan to 368.0864 million yuan. The stock buyback expenditure from the previous period was not repeated this period, and the discounting of receivables brought in 2.9299 million yuan.

Potential Risks Facing the Company

Macroeconomic Fluctuations and Trade Environment Risks

With broad downstream applications, a slowdown in global economic recovery or trade policy adjustments could weaken terminal demand and cause supply chain cost fluctuations, impacting revenue and profits.
Response: Monitor macro and trade policies closely, expand domestic markets, promote independent brands and smart product innovation, and enhance risk resilience.

Intensified Market Competition Risks

The smart controller industry evolves rapidly; failure to innovate continuously, improve production efficiency, or scale up could lead to market share loss.
Response: Maintain technological leadership, promote automation and lean production, optimize customer service, and improve overall competitiveness.

Customer Concentration Risks

The top five customers account for 83.05% of sales. Changes in key customer relationships or poor performance could significantly impact results.
Response: Deepen cooperation with core customers, expand new clients and fields, and optimize customer structure.

Exchange Rate Fluctuation Risks

With a high proportion of overseas business, RMB exchange rate fluctuations can affect exchange gains/losses and profitability.
Response: Study exchange rate trends, use forward contracts and hedging tools to reduce risks.

Raw Material Procurement Risks

High proportion of raw material costs in operating expenses means price volatility or supply shortages could affect profitability.
Response: Establish long-term cooperation with key suppliers, maintain rolling inventories, and strengthen cost control.

New Product R&D Risks

High R&D investment and long cycles mean market performance below expectations could impact revenue growth and resource allocation efficiency.
Response: Conduct thorough market research, plan products based on demand, and improve project accuracy.

Management and Directors’ Compensation: Stable Core Management Compensation

During the reporting period, Chairman and General Manager Xiao Ping received a pre-tax total compensation of 361,800 yuan; Vice Presidents Li Zhongren, 412,000 yuan; Fang Yingjiao, 362,900 yuan; Luo Zhenggen, 472,400 yuan; CFO Zhan Qinglin, 359,000 yuan. Overall, compensation remains within a reasonable range, aligned with company scale and industry standards.

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