Beixin Building Materials 2025 Annual Report Interpretation: Net Profit Attributable to Parent Company Declines 20.31% to 2.906 Billion Yuan, Financial Expenses Drop 61.67%

Key Profitability Indicators Analysis

Slight Decrease in Operating Revenue by 2.09%, Clear Business Structure Differentiation

In 2025, the company achieved an operating revenue of 25.28 billion yuan, down 2.09% year-over-year. By business segment, the core lightweight building materials business revenue was 16.07 billion yuan, a decrease of 8.67%, which mainly dragged down overall revenue; waterproof building materials revenue was 4.79 billion yuan, up 3.33%; and coatings building materials revenue was 4.42 billion yuan, a significant increase of 23.10%, becoming an important support for performance growth.

Net Profit Attributable to Parent and Non-Recurring Items Both Decline, Profitability Under Pressure

Net profit attributable to shareholders of the listed company was 2.906 billion yuan, down 20.31%; net profit after deducting non-recurring gains and losses was 2.78 billion yuan, down 21.86%. The decline was mainly due to shrinking profits in the lightweight building materials segment and increased selling and administrative expenses during the period.

Per Share Earnings Also Decline

Basic earnings per share were 1.717 yuan, down 20.47% year-over-year; non-recurring per share earnings declined in tandem, consistent with the trend of net profit, reflecting an overall decrease in the company’s profitability.

In-Depth Analysis of Operating Expenses

Sales Expenses Increase by 9.96%, Channel Expansion Investment Rises

In 2025, sales expenses were 1.586 billion yuan, up 9.96%. This was mainly due to the company’s efforts to deepen channels from public construction to home decoration, urban to rural areas, adding thousands of new retail stores, increasing coverage in county and township outlets, and intensifying marketing efforts, leading to higher channel development and marketing costs.

Management Expenses Rise by 4.83%, Organizational Optimization Still Incurs Costs

Management expenses totaled 1.183 billion yuan, up 4.83%. The company promoted reduction of legal entity levels and organizational restructuring during the year, but some management costs were still incurred during integration. Additionally, investments in digital transformation and internal control systems also supported management expenses.

Financial Expenses Drop Significantly by 61.67%, Debt Structure Optimization Shows Results

Financial expenses were 28 million yuan, a sharp decrease of 61.67%. This was mainly due to a reduction in interest-bearing debt and optimized financing structure lowering financing costs. Interest expenses decreased from 923 million yuan in 2024 to 430 million yuan in 2025, while interest income increased from 214 million yuan to 230 million yuan, leading to a significant reduction in financial costs.

R&D Expenses Slightly Decrease by 1.68%, Innovation Investment Remains Stable

R&D expenses were 1.04 billion yuan, down 1.68%. R&D investment accounted for 4.13% of operating revenue, roughly the same as last year. The company focused on key core technologies in areas such as intelligent gypsum board factories, high-performance waterproof materials, and special functional coatings, adding one national manufacturing single champion enterprise and one national specialized and innovative “Little Giant” enterprise. Total valid patents reached 5,322, with over 33% being invention patents, continuously strengthening innovation capabilities.

R&D Personnel Status

As of the end of 2025, the company had 1,215 R&D personnel, a slight increase of 0.66%, accounting for 7.53% of total staff. The educational structure of R&D staff improved further, with 139 holding master’s degrees or above, up 12.50%; 610 with bachelor’s degrees or above, up 2.07%. This personnel structure optimization provides talent support for ongoing innovation.

Cash Flow and Three Activity Analyses

Net Cash from Operating Activities Decreases by 18.12%, Payment Pressure Emerges

Net cash flow from operating activities was 4.204 billion yuan, down 18.12%. The main reason was a 4.95% decrease in cash received from sales of goods and services, while cash paid for purchasing goods and services decreased only 1.94%. Meanwhile, cash paid to and for employees increased by 11.80%. These changes led to a decline in operating cash flow, indicating increased payment pressure amid market demand challenges.

Net Cash from Investing Activities Significantly Improved, Spending Shrinks

Net cash flow from investing activities was -720 million yuan, a substantial improvement from -2.836 billion yuan in the previous year, up 74.60%. This was mainly due to a decrease in cash paid for acquisitions of subsidiaries and reduced cash recovered from disposal of fixed assets, intangible assets, and other long-term assets, with overall investment expenditure contracting.

Net Cash from Financing Activities Reverses, Debt Repayment Increases

Net cash flow from financing activities was -2.719 billion yuan, down 27.29%. This was mainly because debt repayment cash increased by 68.31% to 3.657 billion yuan, and cash paid for dividends, profit distribution, or interest increased by 5.30%. Although cash received from new borrowings rose 81.00%, it was insufficient to cover debt repayment and dividend payments, resulting in a negative net cash flow from financing.

Risk Factors

Industry Cycle and Policy Fluctuation Risks

The company’s industry is highly linked to the real estate sector. Despite multiple policies introduced in 2025 to stabilize the property market, recovery remains uncertain. Continued weakness in demand could exert ongoing pressure on core businesses like lightweight building materials. Changes in environmental and tax policies may also impact costs and profitability.

Raw Material Price Fluctuation Risks

Prices of raw materials such as facing paper, asphalt, and solvents are heavily influenced by commodity markets. Significant increases in raw material prices, if not fully passed on to product prices, could directly squeeze profit margins.

International Market Operating Risks

The company’s overseas operations in Thailand, Uzbekistan, Tanzania, and other markets face risks including geopolitical issues, exchange rate fluctuations, and local regulatory changes, which could affect the stability of overseas project profits.

Executive Compensation

Chairman Pre-tax Remuneration of 2.3513 Million Yuan

During the reporting period, the chairman received a pre-tax total remuneration of 2.3513 million yuan. Compensation is linked to overall company performance and considers contributions to strategic planning and organizational optimization.

General Manager Pre-tax Remuneration of 2.3513 Million Yuan

The general manager, who is the same person as the chairman, also received 2.3513 million yuan pre-tax, responsible for daily operations and implementing the “One Body, Two Wings” strategy.

Vice Presidents’ Pre-tax Remuneration Range: 1.4422–1.5971 Million Yuan

Vice presidents Xu Qian, Li Chang, Yang Zhengbo, Ren Li, and Qiu Hong received pre-tax remunerations of 1.5824 million, 0.8893 million, 1.4422 million, 1.5899 million, and 1.5971 million yuan respectively. Compensation levels are determined based on business performance and management responsibilities.

Chief Financial Officer Pre-tax Remuneration of 660,000 Yuan

CFO Wang Jiachuan received a pre-tax total of 660,000 yuan, mainly responsible for financial management, capital operations, and capital structure optimization, with notable results in reducing financial expenses in 2025.

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