Eagle Eye Warning: Wanxiang Qianchao's accounts receivable growth rate exceeds the revenue growth rate

Sina Finance Listed Company Research Institute | Financial Report Eagle-Eye Alert

On April 6, Wanxiang Qianchao released its 2025 annual report. The audit opinion was a standard unqualified (no reservations) audit opinion.

The report shows that for all of 2025, the company’s operating revenue was RMB 13.39B, up 4.06% year over year; net profit attributable to shareholders was RMB 1.04B, up 8.89% year over year; net profit after excluding non-recurring items attributable to shareholders was RMB 917 million, down 1.72% year over year; and basic earnings per share were RMB 0.31 per share.

Since the company’s listing on January 1, 1994, it has carried out cash dividends 29 times, with cumulative implemented cash dividends of RMB 917M. The announcement shows that the company plans to distribute cash dividends of RMB 2 per 10 shares to all shareholders (including tax).

The listed company financial report eagle-eye alert system conducts intelligent quantitative analysis of Wanxiang Qianchao’s 2025 annual report across four major dimensions: performance quality, profitability, capital pressure and safety, and operating efficiency.

I. Performance Quality

In the reporting period, the company’s revenue was RMB 8.42B, up 4.06%; net profit was RMB 13.39B, up 9.16%; and net cash flow from operating activities was RMB 1.05B, up 21.41%.

From the overall performance perspective, attention should be paid to:

• The year-over-year growth rate of net profit attributable to shareholders after excluding non-recurring items continues to decline. In the past three annual reports, the year-over-year changes in net profit attributable to shareholders after excluding non-recurring items were 23.67%, 21.26%, and -1.72%, respectively, with the downward trend continuing.

Based on the quality of operating assets, attention should be paid to:

• The growth rate of accounts receivable is higher than that of operating revenue. In the reporting period, accounts receivable increased 31.55% compared with the beginning of the period, while operating revenue increased 4.06% year over year; the growth rate of accounts receivable is higher than the growth rate of operating revenue.

• The ratio of accounts receivable to operating revenue continues to rise. In the past three annual reports, the ratio of accounts receivable to operating revenue was 15.86%, 19.51%, and 24.66%, respectively, showing a continuous increase.

II. Profitability

In the reporting period, the company’s gross margin was 17.75%, down 0.7% year over year; the net profit margin was 7.8%, up 4.9% year over year; and return on equity (weighted) was 11.73%, up 10.14% year over year.

Based on the company’s operations and returns, attention should be paid to:

• Declining gross margin on sales. In the reporting period, the gross margin on sales was 17.75%, down 0.7% year over year.

• Declining gross margin on sales, while sales net profit margin increases. In the reporting period, gross margin on sales declined from 17.88% in the same period last year to 17.75%, and the sales net profit margin increased from 7.44% in the same period last year to 7.8%.

III. Capital Pressure and Safety

In the reporting period, the company’s asset-liability ratio was 61.23%, up 5.44% year over year; the current ratio was 1.3, and the quick ratio was 1.03; total debt was RMB 1.59B, including short-term debt of RMB 770M, with short-term debt accounting for 84.53% of total debt.

From the overall financial position, attention should be paid to:

• Ongoing increase in the asset-liability ratio. In the past three annual reports, the asset-liability ratio was 56.68%, 58.07%, and 61.23%, respectively, with the trend increasing.

From short-term capital pressure, attention should be paid to:

• A sharp increase in the short-term-to-long-term debt ratio. In the reporting period, the short-term debt / long-term debt ratio increased sharply to 3.08.

• The cash ratio continues to decline. In the past three annual reports, the cash ratio was 0.68, 0.68, and 0.6, respectively, showing a continued decline.

IV. Operating Efficiency

In the reporting period, the company’s accounts receivable turnover ratio was 4.61, down 13.91% year over year; inventory turnover ratio was 3.27, down 1.62% year over year; and total asset turnover ratio was 0.59, down 0.89% year over year.

Based on operating assets, attention should be paid to:

• Accounts receivable turnover continues to decline. In the past three annual reports, the accounts receivable turnover ratios were 6.48, 5.35, and 4.61, respectively, indicating weakening receivables turnover capability.

• Inventory turnover continues to decline. In the past three annual reports, inventory turnover ratios were 4.36, 3.33, and 3.27, respectively, indicating weakening inventory turnover capability.

• The proportion of accounts receivable / total assets continues to increase. In the past three annual reports, the ratio of accounts receivable to total assets was 11%, 11.26%, and 14.33%, respectively, showing a continuous increase.

From long-term assets, attention should be paid to:

• Total asset turnover continues to decline. In the past three annual reports, total asset turnover ratios were 0.72, 0.6, and 0.59, respectively, indicating weakening total asset turnover capability.

• Work-in-progress (construction in progress) has changed significantly. In the reporting period, construction in progress was RMB 420 million, up 54.66% from the beginning of the period.

• Other non-current assets have changed significantly. In the reporting period, other non-current assets were RMB 300 million, up 244.49% from the beginning of the period.

Click Wanxiang Qianchao’s eagle-eye alert to view the latest alert details and a visual preview of financial reports.

Introduction to Sina Finance Listed Company Financial Report Eagle-Eye Alert: The listed company financial report eagle-eye alert is an intelligent professional analysis system for listed company financial reports. The eagle-eye alert, by bringing together a large number of authoritative financial experts such as accounting firms and listed companies, tracks and interprets the latest financial reports of listed companies across multiple dimensions—including company performance growth, earnings quality, capital pressure and safety, and operating efficiency—and uses charts and text to flag possible financial risk points. It provides technical solutions for professional, efficient, and convenient identification and early warning of financial risks for financial institutions, listed companies, regulatory authorities, and others.

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