Kangli Elevator 2025 Annual Report Analysis: Non-GAAP Net Profit Down 17.11% Year-over-Year; Net Cash from Financing Activities Plummeted 80.29%

Revenue Scale Grows Steadily, Profitability Indicators Under Pressure

In 2025, Kone Elevator recorded operating revenue of 4.448 billion yuan, up 8.93% year over year, with the revenue scale continuing to expand steadily. However, profitability remained under pressure: net profit attributable to shareholders of listed companies was 330 million yuan, down 7.56% year over year; non-recurring profit and loss (non-NI) net profit was 260 million yuan, down sharply 17.11% year over year, indicating that overall profitability quality weakened somewhat.

From the profitability indicators, basic earnings per share was 0.4137 yuan per share, down 7.59% year over year. Non-recurring profit and loss earnings per share also declined alongside non-NI net profit, reflecting a downturn in the company’s core business profitability level.

Optimization of Cost Structure, Significant Changes in Finance Expenses

Overall Cost Situation

In 2025, the company’s total period expenses were 770 million yuan, up 1.75% year over year. The growth rate was lower than the revenue growth rate, and the effectiveness of expense control began to show.

Breakdown and Interpretation

• Selling expenses: Up 9.28% year over year, mainly due to increased expenses resulting from the company’s expansion of markets and strengthening of sales network layout. This corresponds positively with revenue growth, showing that the company’s market expansion efforts have intensified.
• Administrative expenses: Down 7.77% year over year. The company achieved tighter control over administrative expenses by optimizing management processes and cutting non-essential spending, improving internal operating efficiency.
• Finance expenses: Up significantly by 75.90% year over year. This was mainly because interest received in the current period decreased compared with the same period last year, and losses from exchange rate movements were larger, leading to a narrowing in the year-over-year reduction in finance expense deficits.
• R&D expenses: Up 6.79% year over year. The company continued to increase R&D investment to ensure its technological innovation capabilities. R&D spending as a proportion of revenue was 4.06%, staying at a relatively high level.

R&D Team Expanded, Innovation Capabilities Strengthened

In 2025, the company’s number of R&D personnel reached 426, up 8.12% year over year, and the proportion of R&D personnel rose to 9.06%. In terms of educational background, there were 283 R&D personnel with a bachelor’s degree or above, up 10.66%, and the overall quality of the R&D team improved steadily.

The company’s full-year R&D investment was 181 million yuan, up 6.79% year over year. It focused on advancing multiple projects such as iterations of disc-type products, iterations of machine-room-less products, and elevator R&D for 4m/s, among others. Some projects were completed and products were rolled out, laying a foundation for strengthening the company’s product matrix and enhancing technical competitiveness.

Cash Flow Shows Structural Divergence, Financing-Side Pressure Becomes Evident

Overall Cash Flow Situation

In 2025, the company’s net increase in cash and cash equivalents was -613 million yuan, with an additional 192 million yuan outflow year over year, indicating that cash flow pressure increased.

Breakdown by Project

• Cash flow from operating activities: Net cash flow increased slightly by 1.09% year over year, reaching 521 million yuan. Operating cash flow remained stable, reflecting the company’s strong “cash-generating” ability from its main business and relatively good quality of customer payment collection.
• Cash flow from investing activities: Net cash outflow widened by 5.99% year over year, mainly because the company increased the scale of financial asset investments such as wealth management products, leading to higher investment outlays.
• Cash flow from financing activities: Net cash flow fell sharply by 80.29% year over year. Mainly, the parent company had a larger number of bank acceptance bills discounted to its subsidiaries reaching maturity, and the current period included more payments for discounted notes, resulting in a significantly increased cash outflow pressure on the financing side.

Multiple Risks Need to Be Watched Closely

2. Macroeconomic environment risk: The elevator industry is highly correlated with the real estate industry’s market conditions. Adjustments in the real estate market may lead to a decline in demand for new elevators, thereby affecting the company’s operating performance.
3. Risk of intensifying industry competition: Competition in the elevator industry is fierce. If the company cannot timely capture market demand and technology trends, it may lead to a decline in market share and increased pressure on performance.
4. Accounts receivable risk: As of the end of 2025, the company’s net receivables were 1.374 billion yuan, accounting for 18.55% of total assets. Liquidity pressures among some real estate customers may trigger risks related to the recovery of accounts receivable.
5. Risk of fluctuations in raw material prices: Fluctuations in prices of raw materials such as steel will affect the company’s procurement costs. If the company cannot effectively pass the costs on, it will impact profitability.
6. Product quality risk: Elevators are special equipment, and product safety and quality are crucial. If there are problems in quality control, it may affect the company’s brand image and operating performance.

Compensation for the Board and Senior Management

In 2025, the total pre-tax remuneration received by the company’s directors and senior management from the company was 8.2204 million yuan. Among them:

• For Chairman and General Manager Zhu Linhao: pre-tax remuneration of 1.3740 million yuan;
• For Vice Chairman and Deputy General Manager Zhu Linyi: pre-tax remuneration of 1.2830 million yuan;
• For Director, Deputy General Manager, and CFO Shen Zhouqun: pre-tax remuneration of 1.2000 million yuan;
• For Deputy General Manager and Secretary of the Board Wu Xian: pre-tax remuneration of 1.2551 million yuan;
• For Executive President of the Frontline Operations Center Chen Zhenhua: pre-tax remuneration of 1.1551 million yuan;
• For Chief Engineer of the Technology Center Meng Qingdong: pre-tax remuneration of 0.8828 million yuan.

Overall, although Kone Elevator maintained revenue growth in 2025, profitability indicators were under pressure, and cash flow showed structural divergence. At the same time, the company faces multiple risks, including industry competition and accounts receivable risk. The company needs to continue strengthening cost control, optimizing cash flow management, and increasing efforts in market expansion and technological innovation to respond to changes in the industry environment, improve profitability quality, and enhance its ability to withstand risks.

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Responsible editor: Xiao Lang Kuai Bao