Shanghai Hexatech 2025 Annual Report Analysis: Revenue rose 18.27% to 1.311 billion yuan, while financing cash flow plummeted 75.99%

Operating Revenue: Industry Recovery Drives Revenue Back to Growth Path

In 2025, Shanghai Hejing achieved operating revenue of 1,311.34 million yuan, an 18.27% increase compared to 2024, ending the decline trend from 2023 to 2024.

From a business structure perspective:

Revenue growth mainly benefited from the global semiconductor market recovery, with demand for downstream power devices and analog chips rebounding, customer inventory returning to reasonable levels, and product sales increasing. Silicon materials revenue doubled, primarily due to business expansion, though this segment has a relatively low gross margin and limited contribution to overall profitability.

Net Profit and Non-Recurring Net Profit: Steady Improvement in Profitability

In 2025, net profit attributable to shareholders of the listed company was 125.35 million yuan, up 3.78% year-over-year; net profit excluding non-recurring gains and losses was 116.69 million yuan, up 8.53%. The growth rate of non-recurring net profit exceeded that of net profit, indicating improved quality of core business profits.

Regarding non-recurring gains and losses, the government grants included in current profit and loss amounted to 17.82 million yuan, up from 14.99 million yuan in 2024; meanwhile, gains and losses from disposal of non-current assets were -1.50 million yuan, which somewhat dragged on net profit.

Earnings Per Share: Growth in Line with Profitability

In 2025, basic earnings per share (EPS) was 0.19 yuan/share, a 5.56% increase from 0.18 yuan/share in 2024; non-recurring EPS was 0.18 yuan/share, up 12.50% from 0.16 yuan/share in 2024. The growth rate of non-recurring EPS was significantly higher than basic EPS, consistent with the growth trend of non-recurring net profit, reflecting enhanced core business profitability.

Expenses: Management Expenses Significantly Increase as Main Variance

Total operating expenses in 2025 were 131.32 million yuan, up 36.51% from 96.20 million yuan in 2024, with expense growth outpacing revenue growth, impacting profitability. Specific changes include:

R&D Investment and Staffing: Continued Focus on R&D, Stable Team

In 2025, R&D expenditure totaled 114.21 million yuan, up 14.30%, accounting for 8.71% of operating revenue, slightly lower than 9.01% in 2024 due to revenue growth outpacing R&D investment.

Regarding R&D personnel:

The R&D team size remained stable, with increased average salaries to attract and retain core R&D talent. Projects include reducing micro-defects on silicon polishing surfaces, improving edge corrosion ring quality, and product upgrades such as 12-inch epitaxy for CIS and 8-inch ultra-thick epitaxy processes, laying a foundation for future product competitiveness.

Cash Flow: Slight Decline in Operating Cash Flow, Significant Outflow in Investing Cash Flow

In 2025, the company’s overall cash flow showed a slight decrease in operating cash flow, large outflow in investing activities, and a significant decline in financing cash flow:

Although operating cash flow declined slightly, it remained positive, indicating strong cash generation from core operations. The large outflow in investing cash flow reflects capacity expansion, which is expected to drive future revenue and profit growth. The sharp decrease in financing cash flow is due to the absence of large fundraising activities after the IPO.

Potential Risks

Industry Cycle Risk

The semiconductor industry is cyclical. If the global macroeconomic environment worsens or downstream demand falls short of expectations, the company’s performance may face decline risks.

Market Competition Risk

The global silicon wafer market is highly concentrated, dominated by major international players. The company still lags behind in technology and scale, and domestic competitors are accelerating their deployment, which could intensify market competition.

Project Construction Risk

The Zhengzhou Hejing 12-inch silicon wafer project involves large upfront investments, with long ramp-up and customer certification cycles. Delays in project progress, slow capacity release, or difficulties in customer acquisition could adversely affect performance.

Exchange Rate Fluctuation Risk

Since some products are exported and raw materials are purchased in USD, exchange rate fluctuations may impact revenue and costs, affecting profitability.

Senior Management Compensation: Tied to Performance

In 2025, the compensation for senior management was as follows:

The general manager’s compensation is relatively high, aligned with management responsibilities; chairman and CFO compensation are within reasonable ranges. The overall compensation system is linked to company performance and role value, helping motivate management to improve operational results.

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