Eagle Eye Warning: HaHuan Huadong's sales gross profit margin has increased significantly

Sina Finance Listed Company Research Institute | Earnings Eye Warning

On April 1, Hanhai Huatong released its 2025 annual report. The audit opinion is a standard unqualified audit opinion.

The report shows that the company’s operating revenue for the full year 2025 was 1.78B yuan, up 13.41% year over year; net profit attributable to shareholders was 37.5386 million yuan, down 7.27% year over year; net profit after deducting non-recurring items attributable to shareholders was 23.9914 million yuan, down 11.18% year over year; basic earnings per share were 0.21 yuan per share.

Since the company’s listing in March 2022, it has paid cash dividends 4 times, with cumulative cash dividends of 71.2709 million yuan already implemented.

The Listed Company Earnings Eye Warning System conducts an intelligent quantitative analysis of Hanhai Huatong’s 2025 annual report across four major dimensions: performance quality, profitability, capital pressure and safety, and operating efficiency.

I. Performance Quality

During the reporting period, the company’s revenue was 1.78B yuan, up 13.41% year over year; net profit was 44.4317 million yuan, up 9.75% year over year; and net cash flow from operating activities was 95.5713 million yuan, up 127.7%.

II. Profitability

During the reporting period, the company’s gross margin was 12.38%, up 19.28% year over year; net profit margin was 2.49%, down 3.23% year over year; and return on equity (weighted) was 2.74%, down 8.67% year over year.

Combining the company’s operations, we need to focus on:

• A significant increase in gross profit margin from sales. During the reporting period, the gross profit margin from sales was 12.38%, up significantly 19.28% year over year.

• Ongoing decline in net profit margin from sales. In the last three annual reports, the net profit margin from sales was 3.67%, 2.57%, and 2.49%, respectively, with the trend of change continuing to decline.

• Gross profit margin from sales increased, while inventory turnover declined. During the reporting period, gross profit margin from sales rose from 10.38% in the same period last year to 12.38%, and inventory turnover declined from 4.35 times in the same period last year to 4.04 times.

• Gross profit margin from sales increased, while accounts receivable turnover declined. During the reporting period, gross profit margin from sales rose from 10.38% in the same period last year to 12.38%, and accounts receivable turnover declined from 4.35 times in the same period last year to 4.04 times.

• Gross profit margin from sales increased, while net profit margin from sales declined. During the reporting period, gross profit margin from sales rose from 10.38% in the same period last year to 12.38%, while net profit margin from sales fell from 2.57% in the same period last year to 2.49%.

Combining the company’s asset side, we need to focus on:

• Average return on net assets for the last three years is below 7%. During the reporting period, the weighted average return on net assets was 2.74%, and the weighted average return on net assets over the most recent three accounting years averaged below 7%.

• Return on net assets continues to decline. In the last three annual reports, the weighted average return on net assets was 4.4%, 3%, and 2.74%, respectively, with the trend of change continuing to decline.

• Return on invested capital is below 7%. During the reporting period, the company’s return on invested capital was 2.58%, and the average across the three reporting periods was below 7%.

III. Capital Pressure and Safety

During the reporting period, the company’s asset-liability ratio was 38.94%, down 2.66% year over year; the current ratio was 1.97, and the quick ratio was 1.47; total debt was 440 million yuan, of which short-term debt was 381 million yuan, and short-term debt as a proportion of total debt was 86.5%.

From the overall financial condition, we need to focus on:

• The current ratio continues to decline. In the last three annual reports, the current ratio was 2.03, 2, and 1.97, respectively; the company’s short-term solvency appears to be weakening.

From the perspective of capital management, we need to focus on:

• The ratio of interest income to cash and cash equivalents is less than 1.5%. During the reporting period, cash and cash equivalents were 430 million yuan, short-term debt was 250 million yuan, and the company’s average ratio of interest income to cash and cash equivalents was 0.212%, below 1.5%.

From the perspective of capital coordination, we need to focus on:

• Capital expenditures continue to be higher than net cash inflow from operating activities. In the last three annual reports, the cash paid for the purchase and construction of fixed assets, intangible assets, and other long-term assets was 110 million yuan, 70 million yuan, and 100 million yuan, respectively. The company’s net cash flow from operating activities was 30 million yuan, 40 million yuan, and 100 million yuan, respectively.

IV. Operating Efficiency

During the reporting period, the company’s accounts receivable turnover was 4.04, down 7.22% year over year; inventory turnover was 4.04, down 7.16% year over year; and total asset turnover was 0.74, up 5.36% year over year.

From operating assets, we need to focus on:

• Accounts receivable turnover continues to decline. In the last three annual reports, accounts receivable turnover was 5.82, 4.35, and 4.04, respectively, indicating weakening ability to turn receivables.

• Inventory turnover continues to decline. In the last three annual reports, inventory turnover was 4.99, 4.35, and 4.04, respectively, indicating weakening inventory turnover capability.

• The ratio of accounts receivable to total assets continues to increase. In the last three annual reports, the ratio of accounts receivable to total assets was 14.15%, 17.9%, and 18.81%, respectively, showing continuous growth.

• The ratio of inventory to total assets continues to increase. In the last three annual reports, the ratio of inventory to total assets was 13.56%, 15.3%, and 16.86%, respectively, showing continuous growth.

From long-term assets, we need to focus on:

• Significant changes in other non-current assets. During the reporting period, other non-current assets were 40M yuan, up 92.88% from the beginning of the period.

From the “three expenses” dimension (selling expenses, administrative expenses, and R&D expenses), we need to focus on:

• Selling expenses to operating revenue continues to grow. In the last three annual reports, the ratio of selling expenses to operating revenue was 1.33%, 1.37%, and 1.39%, respectively, showing continuous growth.

• Administrative expense growth exceeds 20%. During the reporting period, administrative expenses were 70M yuan, up 23.63% year over year.

• Administrative expense growth exceeds that of operating revenue. During the reporting period, administrative expenses increased 23.63% year over year, operating revenue increased 13.41% year over year, and the administrative expense growth rate was higher than the operating revenue growth rate.

Click Hanhai Huatong’s Earnings Eye warning to view the latest warning details and a visual preview of the financial report.

Sina Finance Listed Company Financial Report Earnings Eye Warning overview: The Listed Company Financial Report Earnings Eye Warning is an intelligent, specialized analysis system for listed company financial reports. By gathering a large number of authoritative financial experts from accounting firms and listed companies, the Earnings Eye Warning tracks and interprets the latest financial reports of listed companies across multiple dimensions such as corporate performance growth, earnings quality, capital pressure and safety, and operating efficiency, and uses text and images to highlight potential financial risk points. It provides professional, efficient, and convenient technical solution for financial institutions, listed companies, regulatory bodies, and others to identify and issue early warnings for financial risks of listed companies.

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Editor: Xiaolang KuaiBao