Shanghai Xinyang 2025 Annual Report Analysis: Net profit up 71.12%, operating cash flow doubled to 475 million yuan

Significant Growth in Core Profitability Indicators

Operating Revenue: Semiconductor Business Drives 31.28% Revenue Increase

In 2025, the company achieved operating revenue of 1.937 billion yuan, a year-over-year increase of 31.28%. Quarterly, revenue rose steadily, reaching 543 million yuan in the fourth quarter, indicating sustained strong demand.

From the revenue structure, the semiconductor industry contributed 1.517 billion yuan, a 46.50% increase year-over-year, becoming the main growth driver. Specifically, integrated circuit materials revenue was 1.479 billion yuan, up 48.15%. The coatings industry generated 420 million yuan, a slight decrease of 4.54%, reflecting increased industry competition.

Net Profit and Non-Recurring Net Profit: Quality of Profitability Improves

Net profit attributable to shareholders of the listed company was 301 million yuan, a significant increase of 71.12% YoY; non-recurring net profit was 274 million yuan, up 70.48%. Profitability quality and scale are both improving. In terms of non-recurring gains and losses, government grants of 40.87 million yuan were included in current profit and loss, up from last year, somewhat boosting profits, but core business profitability remains strong.

Earnings Per Share (EPS): Surges 70.62%

Basic EPS was 0.9647 yuan/share, and non-recurring EPS was 0.8783 yuan/share, both increasing over 70% YoY, matching the profit growth, reflecting full transfer of profit growth to shareholders.

Expenses: R&D Continues to Increase, Sales and Management Expenses Grow with Business Expansion

Total Expenses: Scale Expands with Revenue

In 2025, total expenses amounted to 523.78 million yuan, up 28.69%, roughly proportional to revenue growth.

Selling Expenses: Up 39.93%, Market Expansion Accelerates

Selling expenses reached 93.07 million yuan, a 39.93% increase, mainly due to higher sales personnel salaries and increased market development costs, reflecting efforts to expand the semiconductor market.

Management Expenses: Up 35.03%, Driven by Personnel and Depreciation

Management expenses were 158.23 million yuan, up 35.03%, mainly due to increased management personnel salaries and higher depreciation costs of fixed assets. As the company’s business scale and capacity expansion progress, management costs have risen accordingly.

Financial Expenses: Up 51.30%, Mainly Due to Reduced Interest Income

Financial expenses were 3.71 million yuan, up 51.30%, primarily because of decreased interest income, which fell from 13.96 million yuan last year to 11.19 million yuan.

R&D Expenses: Up 22.37%, Continued Investment in Core Technologies

R&D expenses reached 269.37 million yuan, accounting for 13.91% of revenue. Investment increased in projects like photoresists and polishing liquids, with several projects progressing steadily: some high-end photoresist products achieved sales, ArF immersion photoresists received orders; high-selectivity etching liquids are now scaled and technically leading internationally; advanced process cleaning liquids cover 14nm and above nodes, with some models at the international forefront.

R&D Personnel: Team Expansion, Higher Proportion of Highly Educated Staff

In 2025, R&D staff numbered 301, a 25.42% increase, accounting for 25.62% of total employees. Among them, 14 hold doctorates and 76 hold master’s degrees, with YoY increases of 40% and 13.43%, respectively. The higher proportion of highly educated R&D personnel provides stronger talent support for technological innovation.

Cash Flow: Operating Cash Flow Doubles, Both Investment and Financing Drive Growth

Overall Cash Flow: Net Increase of 429.96 Million Yuan

In 2025, net cash and cash equivalents increased by 429.97 million yuan, turning from negative to positive, significantly improving the company’s cash flow situation.

Operating Cash Flow: Up 111.40% YoY, Quality of Receivables Improves

Net cash flow from operating activities was 475.10 million yuan, doubling YoY, mainly due to increased collections from sales. Operating cash inflows reached 2.153 billion yuan, up 35.83%; outflows were 1.678 billion yuan, up 23.35%. The higher inflow growth contributed to a large net increase.

Investing Cash Flow: Net Outflow of 211.02 Million Yuan, Capacity Expansion Accelerates

Net cash used in investing activities was -211.02 million yuan, a larger outflow YoY, mainly due to increased project investments. Payments for fixed assets, intangible assets, and other long-term assets totaled 469 million yuan, a 123.65% increase. Projects like Hefei plant construction and Shanghai Songjiang headquarters expansion are progressing significantly.

Financing Cash Flow: Net Inflow of 165.00 Million Yuan, Financing Efforts Intensify

Net cash from financing activities was 164.73 million yuan, turning positive YoY, mainly due to new loans. Borrowings received amounted to 530 million yuan, up 23.72%. Meanwhile, financing outflows decreased by 45.62%, reflecting optimized financing strategies.

Risk Warning: Multiple Risks Require Attention

New Product Development and Market Promotion Risks

Research and development of electronic chemical materials involve high investment, long cycles, and high risks. Original R&D faces uncertainties; new products must pass strict certifications before entering chip manufacturers, and market promotion may face uncertainties, potentially affecting product rollout.

Industry Cycle and Cost Fluctuation Risks

The semiconductor industry is cyclical, closely tied to industry prosperity. Fluctuations in raw material prices could increase production costs and squeeze profit margins.

Intensified Competition Risks

With the trend toward localization, domestic electronic chemical market participants are increasing, intensifying competition. The company must maintain technological and product advantages to stay competitive.

Investment Project Return Risks

Capacity expansion projects may not meet expected returns due to market conditions, equipment supply, or customer development issues, potentially impacting company performance.

Management Compensation: Aligning Pay with Performance

Chairman Wang Fuxiang received a pre-tax remuneration of 1.85 million yuan during the reporting period; General Manager Wang Su received 1.03 million yuan; Senior Vice President Zhi Wenyen received 760,000 yuan; CFO Zhou Hongxiao received 600,000 yuan. Compensation levels are generally aligned with company performance and industry standards, reflecting a performance-linked remuneration mechanism.

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