Eagle Eye Warning: Xinghuan Technology's net cash flow from operating activities remains negative

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

On March 24, Xinghuan Technology released its 2025 annual report.

The report shows that the company’s full-year 2025 operating revenue was 448 million yuan, up 20.47%; net profit attributable to shareholders was -245 million yuan, up 28.62%; net profit after deducting non-recurring items attributable to shareholders was -264 million yuan, up 30.55%; basic earnings per share were -2.03 yuan per share.

Since the company went public in September 2022, it has had 0 cash dividends, and the total cash dividends implemented to date are 0 yuan.

The listed company financial report hawk-eye alert system conducts intelligent quantitative analysis of Xinghuan Technology’s 2025 annual report from four major dimensions: performance quality, profitability, funding pressure and safety, and operational efficiency.

I. Performance quality

During the reporting period, the company’s operating revenue was 448 million yuan, up 20.47%; net profit was -245 million yuan, up 28.79%; net cash flow from operating activities was -110 million yuan, up 66.43%.

From the overall performance perspective, the key items to focus on are:

• Operating profit for three consecutive quarters is negative. During the reporting period, operating profit for the most recent three quarters was -60 million yuan, -70 million yuan, and -30 million yuan, remaining negative throughout.

| Item | 20250630 | 20250930 | 20251231 | | Operating profit (yuan) | -5923.47 million | -7026.59 million | -3193.18 million |

• Net profit fluctuated significantly. In the latest three annual reports, net profit was -290 million yuan, -340 million yuan, and -250 million yuan, with year-over-year changes of -6.21%, -19.06%, and 28.79%, respectively; net profit is relatively volatile.

| Item | 20231231 | 20241231 | 20251231 | | Net profit (yuan) | -2.89 billion | -3.44 billion | -2.45 billion | | Net profit growth rate | -6.21% | -19.06% | 28.79% |

From the revenue-cost and period expense ratio, the key items to focus on are:

• The change in selling expenses differs greatly from the change in operating revenue. During the reporting period, operating revenue was up 20.47% year over year, selling expenses were down 21.66% year over year, and the difference between the change in selling expenses and operating revenue is large.

Based on the quality of cash flow, the key items to focus on are:

• Net cash flow from operating activities remains negative. During the reporting period, net cash flow from operating activities was -110 million yuan, and it has remained negative for three consecutive years.

| Item | 20231231 | 20241231 | 20251231 | | Net cash flow from operating activities (yuan) | -365 million | -327 million | -110 million |

• The ratio of net cash flow from operating activities to net profit continues to decline. In the latest three half-year reports, the ratios were 1.26, 0.95, and 0.45, respectively; they continued to fall, showing a declining trend in earnings quality.

| Item | 20231231 | 20241231 | 20251231 | | Net cash flow from operating activities (yuan) | -365 million | -327 million | -110 million | | Net profit (yuan) | -289 million | -344 million | -245 million | | Net cash flow from operating activities / net profit | 1.26 | 0.95 | 0.45 |

II. Profitability

During the reporting period, the company’s gross margin was 54.14%, up 6.85% year over year; net profit margin was -54.78%, up 40.89% year over year; and return on net assets (weighted) was -24.87%, up 8.03% year over year.

Combining with the company’s asset-side returns, the key items to focus on are:

• Average return on net assets over the last three years is below 7%. During the reporting period, the weighted average return on net assets was -24.87%; the weighted average return on net assets over the most recent three accounting years averaged below 7%.

| Item | 20231231 | 20241231 | 20251231 | | Return on net assets | -18.3% | -27.04% | -24.87% | | Return on net assets growth rate | 51.75% | -47.76% | 8.03% |

• Return on invested capital is below 7%. During the reporting period, the company’s return on invested capital was -23.34%, and the average value across the three reporting periods was below 7%.

| Item | 20231231 | 20241231 | 20251231 | | Return on invested capital | -17.77% | -25.13% | -23.34% |

III. Funding pressure and safety

During the reporting period, the company’s asset-liability ratio was 26.78%, up 23.91% year over year; the current ratio was 2.87, and the quick ratio was 2.7; total debt was 50.4286 million yuan, of which short-term debt was 50.4286 million yuan; the ratio of short-term debt to total debt was 100%.

From the overall financial position, the key items to focus on are:

• The current ratio continues to decline. In the latest three annual reports, the current ratio was 5.29, 4.34, and 2.87, respectively; short-term solvency is weakening.

From short-term funding pressure, the key items to focus on are:

• The ratio of short-term to long-term debt increases significantly. During the reporting period, the ratio of short-term debt/long-term debt increased sharply to 35.95.

From the perspective of capital management, the key items to focus on are:

• The ratio of interest income to cash and cash equivalents is less than 1.5%. During the reporting period, cash and cash equivalents were 350 million yuan, short-term debt was 50 million yuan, and the company’s average ratio of interest income to cash and cash equivalents was 0.848%, which is below 1.5%.

• The ratio of other receivables to current assets continues to grow. In the latest three annual reports, the ratio of other receivables to current assets was 0.54%, 1.53%, and 1.92%, respectively, continuing to rise.

• Other payables have changed significantly. During the reporting period, other payables were 10 million yuan, with a period-beginning change rate of 84.75%.

From the perspective of funding coordination, the key items to focus on are:

• CFO, CFI, and CFF are all negative. During the reporting period, all three—net cash flow from operating activities, net cash flow from investing activities, and net cash flow from financing activities—were negative, at -110 million yuan, -53.7064 million yuan, and -24.2071 million yuan respectively; the risk of a capital chain should be watched.

| Item | 20251231 | | Net cash flow from operating activities (yuan) | -1.1 hundred million | | Net cash flow from investing activities (yuan) | -5370.64 million | | Net cash flow from financing activities (yuan) | -2420.71 million |

• Capital expenditures remain consistently higher than net cash inflows from operating activities. In the latest three annual reports, cash paid for the purchase/construction of fixed assets, intangible assets, and other long-term assets were 130 million yuan, 40 million yuan, and 40 million yuan, respectively; the company’s net cash flow from operating activities was -370 million yuan, -330 million yuan, and -110 million yuan, respectively.

IV. Operational efficiency

During the reporting period, the company’s accounts receivable turnover ratio was 1.5, up 43.65%; inventory turnover ratio was 3.97, up 10.33%; and total asset turnover ratio was 0.35, up 49.24%.

From operating assets, the key items to focus on are:

• The ratio of inventory to total assets continues to increase. In the latest three annual reports, the ratio of inventory to total assets was 2.8%, 3.7%, and 4.4%, respectively, continuing to rise.

From long-term assets, the key items to focus on are:

• Long-term prepaid expenses have changed significantly from the beginning of the period. During the reporting period, long-term prepaid expenses were 3.941 million yuan, up 847.18% from the beginning of the period.

• Intangible assets have changed significantly. During the reporting period, intangible assets were 40 million yuan, up 137.4% from the beginning of the period.

Click Xinghuan Technology’s hawk-eye alert to view the latest alert details and a visual preview of the financial report.

Sina Finance listed company financial report hawk-eye alert introduction: The listed company financial report hawk-eye alert is a specialized intelligent analysis system for listed company financial reports. Hawk-eye alerts gather a large number of authoritative financial experts from accounting firms and listed companies, and track and interpret the latest financial reports of listed companies across multiple dimensions, including company performance growth, earnings quality, funding pressure and safety, and operational efficiency. It also uses text and charts to flag potential financial risk points. It provides professional, efficient, and convenient technical solutions for financial institutions, listed companies, regulatory authorities, and others to identify and issue alerts for financial risks of listed companies.

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Responsible editor: Xiao Lang Kuai Bao