Zongheng Co., Ltd. turns profitable for the first time in four years, with multiple drone companies crossing the profitability threshold

By / Paper Does Not Speak

On March 31, 2026, Sichuan’s leading drone enterprise Hengxin Co., Ltd. officially disclosed its 2025 annual financial report to the public. This report marks the official end of the company’s continuous four-year loss-making period, achieving a fundamental turnaround in operating performance and successfully entering the profitable tier.

Specific financial figures show that in 2025, Hengxin Co., Ltd. achieved operating revenue of 621 million yuan, up 30.94% year over year from the same period in 2024. The growth rate remained steady. Net profit attributable to the parent company’s shareholders reached 10.68 million yuan, representing an astonishing 129.84% year-over-year increase. This completely reversed the loss-making trend of four consecutive years from 2021 to 2024, and the company’s profitability level was significantly restored.

As 2025 was a key year in which the large-scale application of drones in China began to take off rapidly, favorable policies related to the low-altitude economy continued to be released at both national and local levels. Downstream government and enterprise procurement demand emerged in a concentrated surge, providing important industry support for Hengxin Co., Ltd.’s performance turnaround. This turnaround-from-loss case not only reflects the current development status of the entire low-altitude economy industry transitioning from the cultivation stage to the growth stage, but also suggests that the drone industry is gradually moving away from the profitability dilemma of the cultivation stage,迎来 a major inflection point for large-scale profitability.

Hengxin Co., Ltd.’s continuous four-year loss-making situation has officially come to an end, achieving a fundamental turnaround in operating performance. Source of image: Hengxin Co., Ltd. 2025 annual report

Listed for four consecutive years and still losing, accumulating losses of 35.79 million yuan; revenue rises but profits do not—an industry-wide common problem

As China’s “No. 1 industrial drone stock,” Hengxin Co., Ltd., since its establishment in 2010, has quickly gained a foothold in key application areas such as surveying and mapping, power inspection, and security monitoring, leveraging its core R&D strength across the full spectrum of industrial drones. With technological advantages, it accumulated a large number of high-quality government and enterprise customer resources and successfully listed on the STAR Market in 2021. Wearing the halo of “a leading industrial drone enterprise on the STAR Market,” it became one of the benchmark companies in the industry.

However, after listing, Hengxin Co., Ltd. fell into a predicament of continuous losses. From 2021 to 2024, its net profit attributable to shareholders remained loss-making for four consecutive years. In 2024, the loss amount expanded to 35.7917 million yuan, and non-recurring profit (loss) net profit losses were 38.7086 million yuan. Although operating revenue increased year by year in the same period—reaching 474 million yuan in 2024, up 57.14% year over year—the contradiction of higher revenue without higher profit became the core problem for the company’s development.

Hengxin Co., Ltd.’s continuous losses were not accidental. Its root causes lay in the combined challenges of the industry environment and the company’s own shortcomings—external market pressure coexisted with internal management weaknesses. This is also a common dilemma faced by many emerging companies in the low-altitude economy industry.

In the past few years, the drone industry as a whole has been affected by multiple unfavorable factors, including fluctuations in the macroeconomic environment, increased downward pressure on the economy, and intensified competition in certain markets. As a result, the overall growth rate of the industrial drone industry did not meet market expectations. Uncertainty in the external economic situation led to tighter procurement budgets and longer procurement cycles for government and enterprise customers. This not only directly affected Hengxin Co., Ltd.’s product delivery pace, but also caused its selling expenses to rise year by year. At the same time, intensified competition in the domestic market caused product gross margin to decline, further compressing the company’s profitability space.

In 2024, Hengxin Co., Ltd. achieved operating revenue of 474 million yuan, up 57.14%; net profit attributable to shareholders of listed company was -0.36 billion yuan, with a year-over-year reduction in losses of 44.51%. Source of image: 21st Century Business Herald

Meanwhile, the drone industry’s technological iteration has been fast-paced. Companies need to continuously invest large amounts of R&D funding to maintain their core competitiveness, which creates considerable pressure on corporate profitability. At the same time, Hengxin Co., Ltd. itself also has poor cost and expense management. In 2024, its various expenses all surged significantly: selling expenses reached 110 million yuan, up 12.59%; R&D expenses were 42.8773 million yuan, up 11.76%; and financial expenses even skyrocketed 130.62% to 4.9843 million yuan. Because it had not yet established an effective cost and expense management mechanism at the time, the investment in expenses and the output of benefits failed to form a reasonable match ratio, further aggravating the company’s loss-making situation.

In addition, Hengxin Co., Ltd.’s operations also faced numerous unexpected setbacks. In June 2024, its wholly-owned subsidiary, Chengdu Hengxin Peng, was prohibited by relevant authorities from participating in three years of procurement activities for the entire armed forces due to suspected collusion in bidding. Moreover, its defense market business had previously accounted for 7.2% of Hengxin Co., Ltd.’s operating revenue in 2023; this penalty directly affected the company’s revenue sources. Meanwhile, regulators repeatedly issued penalties and warnings over information disclosure issues related to Hengxin Co., Ltd., exposing obvious deficiencies in the company’s internal control system. The “pricey divorce case” involving the company’s actual controller, Ren Bin, also drew market attention. Equity dilution raised concerns in the market about governance stability, adding uncertainty to the company’s operations.

Entering 2024, Hengxin Co., Ltd.’s operating condition began to show signs of improvement. That year, its operating revenue exhibited a quarter-by-quarter upward trend. In the first three quarters, net losses attributable to shareholders of listed company narrowed quarter by quarter, and in the fourth quarter it successfully turned a single-quarter profit from a loss, with profitability beginning to gradually recover. At the same time, by the end of 2024, Hengxin Co., Ltd. clearly defined its 2025 development direction with large-scale commercial use of the low-altitude economy as the core, focusing on core businesses and optimizing the business structure, thus setting a direction for subsequent performance growth.

In 2025, revenue reached 621 million yuan and losses turned to profit; Q3 single-quarter net profit of 16.52 million yuan first turns positive

In 2025, China’s low-altitude economy entered a golden development period. Policy tailwinds continued to be released, and downstream markets expanded from pilots to large-scale application. The industry formally shifted from being policy-driven to being application-driven, injecting strong momentum into Hengxin Co., Ltd.’s loss-to-profit turnaround. In the face of industry opportunities, Hengxin Co., Ltd. focused on updating product technology and upgrading end-to-end solutions, accelerated R&D and market expansion, improved its operating condition significantly, and showed a quarter-by-quarter favorable trend in its performance.

In the first three quarters of 2025, Hengxin Co., Ltd.累计 achieved operating revenue of 3,223.615 million yuan, up 57.01%. Growth remained at a high level. Among them, third-quarter single-quarter revenue was 36M yuan, up 53.79% year over year, with a substantial quarter-over-quarter increase. Although net profit attributable to shareholders still remained loss-making in the first three quarters at -198.116 million yuan, the loss amount narrowed significantly. Most importantly, the third-quarter single-quarter net profit attributable to shareholders reached 16.5237 million yuan, realizing a single-quarter profit from loss first. This means that there was a fundamental improvement in operating conditions and that the profitability inflection point became clearly visible.

In 2025, Hengxin Co., Ltd. mainly carried out technological innovation around the overall solution for low-altitude digital economy—“unmanned operations + cloud platform + AI.” Source of image: Hengxin Co., Ltd.

At the time, major securities firms generally also made positive forecasts regarding Hengxin Co., Ltd.’s loss-to-profit turnaround in 2025. Guojin Securities pointed out that Hengxin Co., Ltd. is transforming from a traditional industrial-grade drone mainframe manufacturer into a provider of solutions for low-altitude digital economy and low-altitude logistics, and is expected to fully benefit from the rapid development of the low-altitude economy. It expects the company’s net profit attributable to shareholders in 2025 to reach 11.37 million yuan. Minsheng Securities and Huafu Securities respectively predicted that Hengxin Co., Ltd.’s net profit attributable to shareholders in 2025 would be 7 million yuan and 6 million yuan.

Strong industry support provides broad space for Hengxin Co., Ltd.’s performance repair. According to data from Frost & Sullivan, from 2019 to 2024, the global civil drone market size increased from 187.71M yuan to 19.81M yuan, with a compound growth rate of 24.14%. Among them, the industrial-grade drone market grew even faster, from 65.74B yuan to 27.6B yuan, with a compound growth rate of 33.33%, becoming the core driving force of industry growth. China’s civil drone market accounts for more than 57% of the global share and remains ahead in demand scale, application scenarios, and technological innovation. The acceleration of commercialization in the low-altitude economy provides a favorable environment for domestic companies.

Relying on core technology, Hengxin Co., Ltd. has built an end-to-end solution of “unmanned operations + cloud platform + AI.” With a comprehensive product system and professional services, it enables batch rollouts across multiple regions. Among them, the “Smart Bazhong” low-altitude digital economy project in Bazhong city, with a winning bid value of 106 million yuan, constructs a low-altitude digital path for whole-region coordination, becoming an industry benchmark for large-scale applications at the county-level.

Net profit of 88.57 million yuan for Zhongmin Drone; single-quarter profitability for EHang; loss turnarounds across multiple tracks simultaneously

In addition to Hengxin Co., Ltd., multiple low-altitude companies across different tracks in the industry have also moved away from loss-making dilemmas and achieved profitability breakthroughs. These loss-to-profit companies are distributed across different sub-tracks such as industrial drones, manned eVTOL, and aviation support. Leveraging their own core advantages and seizing opportunities for industry development, they have charted distinct loss-to-profit paths.

As an important player in China’s industrial drone sector, Zhongmin Drone is a representative company that achieved a loss-to-profit turnaround in the same period as Hengxin Co., Ltd. According to the financial data disclosed by Zhongmin Drone, its net profit attributable to shareholders in 2024 was -53.9161 million yuan, and after non-recurring items, its net profit was -62.5393 million yuan, placing it in a clearly loss-making state. However, in 2025, Zhongmin Drone successfully achieved a fundamental turnaround. In its annual report, its net profit attributable to shareholders reached 88.5749 million yuan, and its non-recurring profit net profit also reached around 42.5 million yuan, with a significant improvement in earnings quality.

Its profit turnaround benefited from dual support of technological innovation and market expansion: on one hand, it increased investment in core technology R&D, advanced the development and manufacturing of new unmanned aircraft systems, enriched its product portfolio, and improved its scenario adaptability. On the other hand, it deepened market expansion domestically and internationally, optimized its customer structure and improved delivery efficiency. In 2025, its revenue reached 116.3B yuan, up significantly from 685 million yuan in 2024. Delivery volume rose substantially, directly supporting the improvement in profitability.

An earnings forecast for 2025, which covers low-altitude economy concept stocks expected to see growth. Source of image: Securities Market Weekly

In the manned eVTOL track, EHang Intelligent has shown a stage breakthrough characterized by “slight full-year losses but turning profitable in a single quarter,” becoming an important highlight in the loss-to-profit process of this track. As a benchmark company in the manned eVTOL field, EHang Intelligent has long been committed to promoting the commercialization and rollout of its products. In 2025, it finally delivered a phased success. Its total revenue for 2025 was 509.5 million yuan, up 11.7%. Although it still recorded full-year net losses of 231 million yuan, it achieved its first quarterly profit under U.S. Generally Accepted Accounting Principles (GAAP) in the fourth quarter, which became an important milestone.

This breakthrough mainly relied on an increase in delivery volume and optimization of operating efficiency. In 2025, EHang Intelligent delivered 221 eVTOL aircraft throughout the year, of which 100 were delivered in the fourth quarter, setting a single-quarter peak and driving that quarter’s revenue to 244 million yuan, up 48.4% year over year and up 163.6% quarter over quarter. At the same time, the company maintained a high gross margin of 62.1%. As the scale of deliveries expanded, its operating leverage continued to improve. In the fourth quarter, it achieved net profit of 10.50 million yuan. Under a non-GAAP basis, adjusted net profit reached 71.50 million yuan, successfully turning a single-quarter loss into profit.

In the aviation support sector, North Navigation also successfully got rid of stage losses in 2025 and achieved a profitability breakthrough. According to the financial report data it disclosed, North Navigation’s net profit attributable to shareholders was 59.0374 million yuan in 2024. In the first quarter of 2025, due to business seasonality, it experienced a stage loss, with net profit attributable to shareholders at -16.7584 million yuan. But as the business progressed steadily through the year, its profitability gradually improved. Ultimately, its net profit attributable to shareholders for the full year 2025 reached 121 million yuan, and basic earnings per share were 0.08 yuan.

Its improvement in profitability is closely related to the advancement of business related to the low-altitude economy. North Navigation has long-term planning in areas such as aviation support and unmanned aerial vehicle-related components. With the tailwind from the development of the low-altitude economy, it achieved a performance breakthrough and became an important support for turning loss into profit.

The loss-to-profit turnarounds of these companies reflect that the low-altitude economy industry has tremendous development potential, and also indicate that the industry’s profitability landscape is in a process of optimization. With the continuous maturity of commercialization models, it is expected that more low-altitude companies will achieve profitability breakthroughs in the future, helping the entire industry move into a high-quality development phase.

[Quote]

①　After four consecutive years of losses, this “drone” leveraged the low-altitude economy tailwind to “turn the table” and looked at Sichuan-listed stocks. Sichuan Online. 2026-03-31.

②　A-share industrial drone “two heroes”: outstanding performance in 2025—profits surged in the fourth quarter, but operating cash flow “bled.” Economic Daily News. 2026-04-01.

③　Focusing on Sichuan-listed stocks’ Q3 reports | After four consecutive years of losses, can Hengxin Co., Ltd. turn a profit this year? Financial Investment Network. 2025-10-28.

④　Behind the loss-to-profit turnaround, Hengxin Co., Ltd.’s low-altitude business and AI capabilities coordinate to boost efforts. Securities Times. 2026-03-31.

⑤　Hengxin Co., Ltd. turned losses into profit in 2025; low-altitude economy drove high growth in performance. Securities Daily. 2026-04-01.

⑥　Hengxin Co., Ltd.: years of losses amid the low-altitude economy boom, and the actual controller’s “high-price divorce” turmoil. Caiping Society. 2025-07-24.

⑦　EHang Intelligent’s total revenue for fiscal year 2025 reached 509.5 million yuan; commercialization is about to start. C114 Communication Network. 2026-03-19.

⑧　EHang Intelligent’s single-quarter eVTOL deliveries reached a hundred units; standardized commercial operations are about to start. Securities Times. 2026-03-12.

⑨　Uncovering low-altitude economy “profit-growth bulls”: who is seeing doubled growth, and whose threshold is trampled by institutions? Securities Market Weekly. 2026-03-16.