Shenzhen Zhenye A 2025 Annual Report Analysis: Revenue Plummeted by 56.83%, Net Loss Attributable to Parent Narrowed by 97.31%

Operating Revenue: Scale Cuts in Half, Regional Structure Flips

In 2025, Shenzhen Yezhi A achieved operating revenue of RMB 2.618 billion, down 56.83% year over year from RMB 6.065 billion in 2024. This was mainly due to a decrease in the scale of property sales revenue recognized upon delivery. Judging from the revenue structure, the core property sales business revenue was RMB 2.398 billion, down 59.36% year over year. Its share of total revenue fell from 97.30% to 91.60%.

A significant reversal occurred in the regional revenue mix: Guangdong Province recorded revenue of RMB 1.683 billion, up 118.87% year over year, and its share surged from 12.68% to 64.29%, becoming the largest source of revenue. Meanwhile, Jiangsu Province, whose share was nearly 70% in 2024, recorded revenue of only RMB 0.443 billion, down 89.56% year over year, and its share dropped to 16.90%.

Net Profit: Loss Narrows Substantially, But Still Not Profitable

In 2025, the net profit attributable to shareholders of the listed company was -RMB 0.42 billion. Compared with -RMB 1.568 billion in 2024, the amount of the loss narrowed by 97.31%. Non-GAAP net profit was -RMB 0.53 billion, narrowing by 96.60% versus -RMB 1.570 billion in 2024. Although the scale of the loss decreased markedly, the company still did not achieve profitability. Moreover, the decline in non-recurring loss was larger than that of attributable net profit, indicating that non-recurring gains and losses provided a positive supplement to profit.

From the profitability indicators, basic earnings per share (EPS) was -RMB 0.0313/share, and non-GAAP EPS was -RMB 0.0396/share. Compared with -RMB 1.1618/share in 2024, both improved significantly, but they remain negative.

Expenses: Sales Expenses Cut in Half, New R&D Investment

In 2025, total period expenses of the company were RMB 0.432 billion, down 16.76% from RMB 0.519 billion in 2024. Among them, each expense category showed divergence:

• Selling expenses: RMB 94.2551 million, down 49.87% year over year, mainly because the scale of property sales recognized upon delivery decreased; selling commissions fell sharply year over year as well. The selling expense ratio rose from 3.10% to 3.60%.
• Administrative expenses: RMB 195.5835 million, up 2.89% year over year. The expense ratio rose from 3.13% to 7.47%. Against the backdrop of a sharp decline in revenue, administrative expenses showed prominent cost rigidity.
• Finance expenses: RMB 141.0233 million, down slightly 0.31% year over year. The expense ratio rose from 2.33% to 5.39%. By measures such as early repayment and loan refinancing, the company saved nearly RMB 17 million in interest, to a certain extent offsetting pressure from finance costs.
• R&D expenses: RMB 11.159 million. There was no such expense in 2024. This reflects annual incremental R&D project investment, mainly used to support the development of the smart property management system for保障房.

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R&D Investment: From Zero to Having It, Building a Professional Team

In 2025, the company carried out R&D investment for the first time. Full-year R&D investment totaled RMB 11.159 million, accounting for 0.04% of operating revenue, and all of it was expensed. The core R&D project was the smart management system for保障房, which has completed development and gone live. It enables full-process digital management covering “access control—dynamic monitoring—abnormal early warning,” which helps improve the quality of property services and builds experience in developing smart communities.

Regarding R&D personnel, in 2025 the company added 9 R&D staff members, accounting for 2.16% of the company’s total headcount. Among them, 6 were undergraduates and 3 were master’s degree holders, providing professional talent support for R&D work.

Cash Flow: Operating Cash Flow Plunges, Investment Inflows Increase

In 2025, the company’s cash flow overall showed a pattern of “operating net cash drops significantly, investing net cash turns positive, and financing net cash drops sharply”:

• Cash flow from operating activities: Net amount was RMB 0.189 billion, down 83.04% from RMB 1.115 billion in 2024. This was mainly because operating cash inflows decreased 15.84% year over year to RMB 3.316 billion, while operating cash outflows increased 10.68% year over year to RMB 3.127 billion. The combined effect of a reduced recognized scale and increased spending led to a sharp decline in the net amount.
• Cash flow from investing activities: Net amount was RMB 0.265 billion, while 2024 was -RMB 0.048 billion, achieving a turnaround from negative to positive. This was mainly due to a 134.09% year-over-year surge in investing cash inflows to RMB 353 million. Among them, cash received from disposing of subsidiaries and other operating units contributed significantly. Meanwhile, investing cash outflows decreased 93.66% year over year to RMB 88 million.
• Cash flow from financing activities: Net amount was -RMB 1.034 billion, versus RMB 0.127 billion in 2024, a substantial decline year over year. This was mainly because cash paid for debt repayment increased year over year, while cash received from borrowings decreased year over year. The company proactively optimized its debt structure. By year-end, the asset-liability ratio fell from 66.97% to 62.54%.

Potential Risks: Multiple Challenges in the Industry and Transformation

The company highlighted several operating risks in its annual report that investors should pay attention to:

1. Industry cycle risk: The real estate market is still in a deep adjustment period. The recovery on the sales side is weak, and inventory digestion pressure remains ongoing, which may affect the company’s property sales and cash collections.
2. Transformation business risk: New businesses such as urban village redevelopment, project contracting (for others), and city services are in an expansion stage. They face multiple uncertainties, including market competition, project delivery, and operational management. In the short term, they may be difficult to form stable profit support.
3. Capital chain risk: Although the company’s asset-liability ratio has declined, it remains at a relatively high level. In addition, the financing environment in the real estate industry has not yet been fully loosened. If sales underperform expectations, the company may face pressure on capital turnover.
4. Project operation risk: For businesses such as delivery of existing projects, leasing commercial properties, and operations of affordable housing, there are risks including engineering quality, tenant loss, and rising operating costs.

Compensation for Executives: Core Executive Pay Holds Steady with a Slight Decline

The annual report shows the company’s core executives’ pre-tax remuneration for 2025 as follows:

• Chairman Song Yang: pre-tax remuneration of RMB 1.0337 million, a slight decrease of 2.12% versus RMB 1.0561 million in 2024
• General Manager Li Wei: pre-tax remuneration of RMB 0.9828 million, a slight decrease of 2.06% versus RMB 1.0035 million in 2024
• Vice General Managers: multiple vice general managers’ pre-tax remuneration ranged from RMB 0.6464 million to RMB 0.9283 million, overall basically in line with 2024 or slightly lower
• Chief Financial Officer Li Pu: pre-tax remuneration of RMB 0.7275 million, a slight decrease of 2.43% versus RMB 0.7456 million in 2024

Overall, given that the company is still loss-making, the core executives’ compensation achieved a modest decline, reflecting to some extent a certain linkage with the company’s operating performance.

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Responsible editor: Xiao Lang Express