Eagle Eye Warning: The ratio of net cash flow from operating activities to net profit for Xin Qiang Lian is less than 1

Sina Finance Listed Company Research Institute | Financial Report Eagle Eye Warning

On March 26, Xinqianglian released its annual report for 2025.

The report shows that the company’s total revenue for the year 2025 was 4.628 billion yuan, a year-on-year increase of 57.11%; net profit attributable to the parent company was 818 million yuan, a year-on-year increase of 1151.44%; net profit excluding non-recurring gains and losses was 712 million yuan, a year-on-year increase of 377.56%; basic earnings per share were 2.13 yuan/share.

Since going public in June 2020, the company has distributed cash dividends five times, with a total cash dividend implemented of 199 million yuan.

The listed company’s financial report Eagle Eye Warning System conducts intelligent quantitative analysis of Xinqianglian’s 2025 annual report from four major dimensions: performance quality, profitability, financial pressure and safety, and operational efficiency.

1. Performance Quality Aspect

During the reporting period, the company’s revenue was 4.628 billion yuan, a year-on-year increase of 57.11%; net profit was 843 million yuan, a year-on-year increase of 883.84%; net cash flow from operating activities was 18.384 million yuan, a year-on-year decrease of 95.86%.

From the overall performance perspective, the following needs to be highlighted:

• The growth rate of operating revenue has been continuously declining over the past three quarters. In the reporting period, operating revenue increased by 3.01% year-on-year, with a continuous decline in growth rate over the last three quarters.

• Net profit is quite volatile. In the last three annual reports, net profits were 390 million yuan, 90 million yuan, and 840 million yuan, with year-on-year changes of 19.76%, -78.21%, and 883.84%, respectively, indicating significant volatility.

From the perspective of revenue cost and period expense ratio, the following needs to be highlighted:

• The change in selling expenses is significantly different from the change in operating revenue. In the reporting period, operating revenue changed by 57.11% year-on-year, while selling expenses changed by 9.83% year-on-year, indicating a large discrepancy.

From the perspective of operational asset quality, the following needs to be highlighted:

• The growth rate of accounts receivable is higher than that of operating revenue. In the reporting period, accounts receivable increased by 89.71% compared to the beginning of the period, while operating revenue increased by 57.11%, indicating that the growth rate of accounts receivable exceeds that of operating revenue.

• The growth rate of inventory is higher than that of operating costs. In the reporting period, inventory increased by 53.96% compared to the beginning of the period, while operating costs increased by 38.85%, indicating that the growth rate of inventory exceeds that of operating costs.

| Item | 20231231 | 20241231 | 20251231 | | Inventory Growth Rate Compared to Beginning of Period | 28.19% | -14.57% | 53.96% | | Operating Cost Growth Rate | 7.65% | 15.29% | 38.85% |

From the perspective of cash flow quality, the following needs to be highlighted:

• The change in operating revenue is diverging from the change in net cash flow from operating activities. In the reporting period, operating revenue increased by 57.11% year-on-year, while net cash flow from operating activities decreased by 95.86%, indicating a divergence between operating revenue and net cash flow from operating activities.

• The ratio of net cash flow from operating activities to net profit is below 1. In the reporting period, the ratio of net cash flow from operating activities to net profit was 0.022, indicating weak profit quality.

| Item | 20231231 | 20241231 | 20251231 | | Net Cash Flow from Operating Activities (yuan) | -79.0215 million | 444 million | 18.384 million | | Net Profit (yuan) | 393 million | 85.7039 million | 843 million | | Net Cash Flow from Operating Activities/Net Profit | -0.2 | 5.18 | 0.02 |

2. Profitability Aspect

During the reporting period, the company’s gross profit margin was 28%, a year-on-year increase of 51.1%; net profit margin was 18.22%, a year-on-year increase of 526.2%; return on equity (weighted) was 13.78%, a year-on-year increase of 976.56%.

From the company’s operational perspective on revenue, the following needs to be highlighted:

• The sales gross profit margin is quite volatile. In the last three annual reports, the sales gross profit margins were 26.66%, 18.53%, and 28%, with year-on-year changes of -3.06%, -30.48%, and 51.1%, indicating abnormal fluctuations.

From the perspective of customer concentration and minority shareholders, the following needs to be highlighted:

• The revenue share of the top five customers is relatively large. In the reporting period, the sales from the top five customers accounted for 74.8% of total sales, indicating excessive customer concentration.

• The procurement share from the top five suppliers is relatively large. In the reporting period, the procurement amount from the top five suppliers accounted for 64.36% of total procurement, raising concerns about excessive reliance on suppliers.

3. Financial Pressure and Safety Aspect

During the reporting period, the company’s debt-to-asset ratio was 38.12%, a year-on-year decrease of 19.93%; the current ratio was 1.78, and the quick ratio was 1.39; total debt was 3.556 billion yuan, of which short-term debt was 2.852 billion yuan, accounting for 80.19% of total debt.

From the perspective of short-term financial pressure, the following needs to be highlighted:

• The ratio of short-term to long-term debt has significantly increased. In the reporting period, short-term debt to long-term debt increased significantly to 1.65.

• Short-term debt is large, creating a funding gap. In the reporting period, broad money funds amounted to 1.54 billion yuan, while short-term debt was 1.58 billion yuan, resulting in a broad money funds to short-term debt ratio of 0.97, indicating that broad money funds are below short-term debt.

• Short-term debt pressure is significant, putting pressure on the cash flow chain. In the reporting period, broad money funds amounted to 1.54 billion yuan, short-term debt was 1.58 billion yuan, and net cash flow from operating activities was 0.02 billion yuan. There is a discrepancy between short-term debt, financial expenses, and cash funds and net cash flow from operating activities.

From the perspective of financial control, the following needs to be highlighted:

• The interest income to cash funds ratio is below 1.5%. In the reporting period, cash funds were 650 million yuan, and short-term debt was 1.58 billion yuan, with an average interest income to cash funds ratio of 1.318%, which is below 1.5%.

• The changes in accounts payable are significant. In the reporting period, accounts payable amounted to 1.27 billion yuan, with a change rate of 46.79% compared to the beginning of the period.

From the perspective of funding coordination, the following needs to be highlighted:

• Capital expenditures continue to exceed net cash inflows from operating activities. In the last three annual reports, the cash paid for the acquisition of fixed assets, intangible assets, and other long-term assets was 1.25 billion yuan, 730 million yuan, and 450 million yuan, while net cash flow from operating activities was -80 million yuan, 440 million yuan, and 20 million yuan, respectively.

• Funding coordination exists but there are payment difficulties. In the reporting period, working capital was 2.6 billion yuan, while the working capital demand of the company was 3.39 billion yuan. The working capital generated from financing activities cannot fully cover the capital needs of the company’s operating activities, resulting in a cash payment capability of -780 million yuan.

| Item | 20251231 | | Cash Payment Capability (yuan) | -784 million | | Working Capital Demand (yuan) | 3.389 billion | | Working Capital (yuan) | 2.604 billion |

4. Operational Efficiency Aspect

During the reporting period, the company’s accounts receivable turnover rate was 3.18, a year-on-year increase of 32.45%; inventory turnover rate was 3.14, a year-on-year increase of 18.67%; total asset turnover rate was 0.43, a year-on-year increase of 42.58%.

From the perspective of the three expenses, the following needs to be highlighted:

• Management expenses growth rate exceeds 20%. In the reporting period, management expenses were 100 million yuan, a year-on-year increase of 30.76%.

Click on Xinqianglian Eagle Eye Warning to view the latest warning details and visualized financial report preview.

Introduction to Sina Finance Listed Company Financial Report Eagle Eye Warning: The Eagle Eye Warning for listed company financial reports is an intelligent professional analysis system for listed company financial reports. The Eagle Eye Warning system tracks and interprets the latest financial reports of listed companies from multiple dimensions, including company performance growth, revenue quality, financial pressure and safety, and operational efficiency, by aggregating a large number of authoritative financial experts from accounting firms and listed companies, and provides visual reminders of potential financial risk points. It provides professional, efficient, and convenient technical solutions for financial institutions, listed companies, regulatory authorities, and others for identifying and warning of financial risks in listed companies.

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Editor: Xiaolang Quick Report