Kangqiang Electronics' non-recurring net profit in 2025 is expected to increase by 91.6% to 109 million yuan, with a proposed cash dividend of 0.4 yuan per 10 shares.

Blue Whale News, April 1 — On March 30, Kangqiang Electronics disclosed its 2025 annual report. In 2025, the company achieved operating revenue of 2.199 billion yuan, up 11.96%; net profit after deducting non-recurring gains and losses was 109 million yuan, up significantly by 91.60% year over year, which is higher than the 40.01% increase in net profit attributable to shareholders. Judging by quarterly distribution, in the fourth quarter, non-recurring items excluded (扣非) net profit reached 39 million yuan, accounting for 35.78% of the full year, the highest among all quarters.

Revenue mix further concentrated in higher gross-margin segments. The revenue share of lead frame products rose to 60.12%, the share of bonding wire products was 24.74%, and together the two continued to increase their combined share of operating business revenue. Among them, the gross margin of lead frame products reached 18.22%, up 3.37 percentage points year over year, the largest increase among all business segments; the gross margin of bonding wire products inched up to 3.33%, strengthening the overall profitability base. The overall gross margin of the manufacturing industry increased by 2.06 percentage points to 13.62%, driving the net margin to rise from 4.23% to 5.29%.

The leading position in the domestic market continues to be further consolidated. The domestic sales share reached 81.50%, increasing further compared with the previous year; overseas sales narrowed to 18.50%, and the market layout shows a more focused structural adjustment toward the local supply chain. Notably, the gross margin of domestic sales also rose by 2.42 percentage points to 14.90%, not only higher than the company’s overall gross margin level, but also becoming a key variable driving the upward trend in the consolidated gross margin.

Improved expense control and income quality in tandem. Selling expenses were 15.22 million yuan, up 10.26%; R&D investment was 88.47 million yuan, up 10.54%, and its share of revenue remained stable at 4.02%. The number of R&D personnel was 152, down slightly by 0.65% year over year.

Net cash flow from operating activities was 78.21 million yuan, up 78.08%, significantly higher than the growth rates of revenue and profit. This growth resulted from multiple factors working together: increased collections from sales; more payment of trade payables via notes, leading to reduced cash outflow; a decline in note security deposits; and an increase in government subsidies. The improvement in cash flow matches the growth in profits in a positive cycle, and the company’s ongoing ability to generate cash from operations continues to be strengthened.

Overall, the asset-liability structure is healthy. As of the end of the reporting period, short-term borrowings and long-term borrowings were 533 million yuan and 550 million yuan, respectively; the asset-liability ratio was 47.46%, staying within a reasonable range.

The impact of non-recurring gains and losses narrowed markedly. The total amount of non-recurring gains and losses for the full year was 7.5789 million yuan, accounting for 6.51% of net profit attributable to shareholders, a significant decline compared with the previous year. Specifically, gains and losses from the disposal of non-current assets were -41.9658 million yuan, mainly from losses related to dismantling and rebuilding plants in the west factory area; fair value changes and disposal gains from trading financial assets were +44.0206 million yuan, and the two basically offset each other.

In terms of capital operations, the company has carried out a combination of dividends and share buybacks. For every 10 shares, it pays a cash dividend of 0.4 yuan (including tax), totaling 15.0114 million yuan; at the same time, it repurchased 6.0222 million shares through centralized competitive bidding, paying 99.9996 million yuan, and all shares have already been transferred to a dedicated securities account for the company’s 2025 employee stock ownership plan.