Sifang Co., Ltd.'s net profit attributable to parent company last year grew nearly 16% year-over-year, slightly below institutional expectations

Everyday Financial Reporter | Cai Ding Everyday Financial Editor | Huang Bowen

On the evening of March 23, Sifang Co., Ltd. (SH601126, stock price 43.28 RMB, market value 36.06 billion RMB) disclosed its 2025 annual report.

The report shows that the company achieved revenue of 8.193 billion RMB in 2025, a year-on-year increase of 17.87%; net profit attributable to shareholders of the parent company was 829 million RMB, up 15.84%; non-recurring net profit was 800 million RMB, up 14.64%; basic earnings per share were 1 RMB, an increase of 14.94%. The company plans to pay a cash dividend of 7.2 RMB per 10 shares (tax included).

According to data compiled from Wind Financial Terminal, 11 institutions’ consensus forecast for the company’s net profit attributable to shareholders in 2025 is about 840 million RMB. Therefore, the company’s net profit in 2025 slightly fell short of expectations.

International Business Gross Margin Increased by 7.32 Percentage Points Year-on-Year

In addition to key financial indicators, the annual report also shows that by the end of 2025, Sifang’s total assets reached 12.705 billion RMB, a 15.02% increase from the end of 2024; net assets attributable to shareholders of the listed company were 4.895 billion RMB, up 6.99% year-on-year.

Regarding the reasons for performance growth during the reporting period, Sifang stated that benefiting from the promotion of domestic new power systems and the “dual carbon” policy, the company focuses on technological innovation, concentrates on core business, actively seizes market opportunities, continuously enhances product and technological innovation, further improves service quality and explores niche markets, and operates efficiently; revenue steadily increased; overall gross profit margin remained stable.

In the smart grid sector, Sifang successfully commissioned its first 220kV smart substation renovation project during the reporting period, won multiple bids for State Grid and Southern Grid’s new generation digital and intelligent projects, and achieved breakthroughs in domestic and international markets with grid security and stability control products (such as WAMS systems).

During the reporting period, although the company’s international revenue slightly declined to 209 million RMB, affected by contract structure changes, its gross margin reached 39.73%, an increase of 7.32 percentage points year-on-year.

Additionally, leveraging its integration capabilities of primary and secondary equipment, Sifang maintains a leading market share in segments such as offshore wind power and large-scale photovoltaic bases. The first domestic 50Mvar reactive power compensator integration project (Mengneng Tuxuan Project) was successfully commissioned. In energy storage and other fields, projects like the Zhangjiakou source-network-load-storage carbon-neutral demonstration project and Huadian Laizhou 3MW/30MWh thermal storage combined frequency regulation power station have been successfully implemented.

In R&D, Sifang’s R&D expenses for 2025 reached 707 million RMB, a year-on-year increase of 7.76%, with R&D investment accounting for nearly 9% of revenue. After years of development, the company has accumulated 967 authorized invention patents and 684 software copyrights. It actively explores artificial intelligence applications in power systems and has launched comprehensive intelligent application solutions based on large model technology.

Revenue and Net Profit Attributable to Shareholders Slightly Below Institutional Expectations

Although both revenue and net profit grew in 2025, according to data compiled from Wind Financial Terminal, 11 institutions’ consensus forecasts for Sifang’s 2025 revenue and net profit attributable to shareholders are approximately 8.275 billion RMB and 839 million RMB, respectively. Therefore, the disclosed revenue of 8.193 billion RMB and net profit of 829 million RMB are slightly below expectations.

A reporter from Daily Economic News also noted that despite double-digit growth in total operating income, Sifang’s overall gross margin for domestic business in 2025 was 29.9%, down 2.38 percentage points year-on-year. Looking at specific segments, the gross margins for “Power Grid Automation” and “Power Plant and Industrial Automation” were 40.05% and 23.92%, respectively, down 1.49 and 1.57 percentage points compared to the previous year.

Although Sifang’s net profit attributable to shareholders increased in 2025, the net cash flow from operating activities decreased slightly by 2.35% to 1.225 billion RMB. The company stated that this was mainly due to steady business growth leading to increased payments for procurement, expenses, and other operating cash outflows.

As of the end of 2025, Sifang’s accounts receivable balance reached 1.449 billion RMB, a 21.85% increase from the end of the previous year’s 1.19 billion RMB.

Meanwhile, credit impairment losses and asset impairment losses expanded. Credit impairment losses were -56.11 million RMB (compared to -36.85 million RMB in the same period last year), mainly due to increased expected credit losses on accounts receivable. Asset impairment losses were -80.52 million RMB (compared to -48.87 million RMB last year), mainly due to increased expected credit losses on contract assets and inventory write-downs.

The annual report also shows that by the end of 2025, Sifang’s inventory book value reached 2.325 billion RMB (accounting for 18.3% of total assets), up 18.24% year-on-year; contract assets book value was 2.201 billion RMB (17.32% of total assets), up 25.05%.

Cover image source: Daily Economic News Media Library