Medi Technology (603990) 2025 Annual Report Brief Analysis: Net Profit Grows 114.01% Year-over-Year, Profitability Improves

According to publicly available data compiled by Securities Star, Medici Technology (603990) recently released its 2025 annual report. As of the end of this reporting period, the company’s total operating revenue was 301 million yuan, down 35.04% year-over-year, while net profit attributable to shareholders was 39.16 million yuan, up 114.01% year-over-year. On a quarterly basis, the fourth quarter’s total revenue was 78.57 million yuan, down 24.29% year-over-year, and net profit attributable to shareholders was 4.89 million yuan, up 104.35% year-over-year. During this period, Medici Technology’s profitability improved, with gross profit margin increasing by 342.7% and net profit margin rising by 123.01% year-over-year.

These figures fell short of most analyst expectations, which previously projected a net profit of around 287 million yuan for 2025.

The financial data indicators released in this report are generally average. Notably, gross profit margin was 60.44%, up 342.7% year-over-year; net profit margin was 13.76%, up 123.01%. Total selling, administrative, and financial expenses amounted to 142 million yuan, accounting for 47.21% of revenue, a decrease of 26.05% year-over-year. Net asset value per share was 2.73 yuan, up 4.41%; operating cash flow per share was 0.21 yuan, up 674.11%; earnings per share was 0.13 yuan, up 114.13%.

The explanations for significant changes in key financial items are as follows:

1. Sales expenses decreased by 15.45% due to the completion of the photovoltaic business disposal, which reduced sales expenses related to that segment. Additionally, cost reduction and efficiency improvements in the medical information sector led to lower sales expenses compared to the same period last year.
2. Management expenses decreased by 51.99% mainly because management costs for the photovoltaic business dropped significantly after its disposal.
3. Financial expenses decreased by 92.91% as overall loans and lease financing decreased following the photovoltaic business disposal, leading to a substantial reduction in interest expenses. Additionally, interest income increased due to accrued remaining equity transfer payments.
4. R&D expenses decreased by 44.12% after the photovoltaic business was disposed of, significantly reducing related R&D costs.
5. Net cash flow from operating activities increased by 674.11%, mainly because cash outflows related to the photovoltaic business decreased after disposal, significantly improving the company’s operating cash flow.
6. Net cash flow from investing activities increased by 270.63%, driven by cash inflows from the sale of photovoltaic assets and equity transfers. Meanwhile, cash spent on fixed assets, intangible assets, and other long-term assets decreased sharply compared to last year.
7. Net cash flow from financing activities increased by 13.83%, mainly because the company’s overall loan scale shrank after the photovoltaic business was divested, reducing net cash outflows from borrowing.
8. Changes in cash and cash equivalents increased by 146.34%, due to the receipt of the first installment of equity transfer payments from the photovoltaic subsidiary.
9. Trading financial assets decreased by 100% due to the maturity and redemption of structured deposits.
10. Notes receivable increased by 118.06%, mainly because of an increase in bank acceptance notes receivable.
11. Accounts receivable financing decreased by 100%, as high-credit-rated bank acceptance notes matured and were collected.
12. Other receivables increased by 5121.69%, mainly due to the increase in remaining equity transfer payments and interest receivable from the photovoltaic subsidiary, which was fully collected in January 2026.
13. Assets held for sale decreased by 100%, as the photovoltaic assets classified as held for sale were sold during this period.
14. Other current assets decreased by 67.44%, mainly due to a reduction in prepaid income tax.
15. Construction in progress decreased by 42.41%, as the renovation project at Mary Hospital Fucheng Branch was completed and transferred to long-term deferred expenses.
16. Right-of-use assets increased by 64.96%, due to new lease rights from the renewal of the Mary Hospital lease.
17. Intangible assets increased by 984.87%, as the construction of the regional critical illness collaborative treatment system platform was completed and transferred to intangible assets.
18. Development expenditures decreased by 85.32%, as the same project was transferred to intangible assets upon completion.
19. Long-term deferred expenses increased by 3072.35%, mainly because the renovation of Mary Hospital Fucheng Branch was completed and transferred to long-term deferred expenses.
20. Accounts payable increased by 38.74%, reflecting increased procurement of equipment and services.
21. Employee compensation payable decreased by 35.92%, due to cost reduction and efficiency measures.
22. Other payables decreased by 65.34%, mainly due to the return of potential repurchase obligations related to restricted stock.
23. Liabilities related to assets held for sale decreased by 100%, as the photovoltaic liabilities classified as held for sale were settled.
24. Other current liabilities increased by 206.86%, mainly due to accrued interest on remaining equity transfer payments and transitional gains.
25. Long-term borrowings decreased by 90.97%, as cash flow improved after the photovoltaic business was divested, reducing the need for long-term debt.
26. Lease liabilities increased by 74.1%, due to renewal of the Mary Hospital lease.
27. Operating revenue decreased by 35.04%, mainly because revenue from the photovoltaic segment dropped significantly after disposal.
28. Operating costs decreased by 70.23%, following the disposal of the photovoltaic business.
29. Other income decreased by 89.13%, as last year’s other income mainly consisted of government subsidies related to the photovoltaic segment.
30. Investment income increased by 3964.38%, driven by gains from the disposal of equity stakes in Xinhao New Energy and Madi Power.
31. Fair value change gains decreased by 92.51%, due to structured deposit maturities.
32. Credit impairment losses increased by 125.69%, as the company strengthened collection efforts on receivables, leading to lower bad debt provisions compared to last year.
33. Asset impairment losses decreased by 100.01%, as the disposal of the photovoltaic business significantly reduced impairment provisions.
34. Gains from asset disposals increased by 179.43%, mainly from the sale of transportation equipment.
35. Income tax expense decreased by 83.62%, due to the transfer of the photovoltaic subsidiary and impairment of long-term equity investments, which increased unrecognized losses, leading to lower current and deferred tax expenses.

Securities Star’s valuation analysis tools indicate:

• Business Evaluation: The company’s ROIC last year was 3.02%, indicating weak capital returns. However, the net profit margin was 13.76%, suggesting high value-added products or services after all costs. Historically, the median ROIC since listing is 10.25%, with relatively good investment returns, though 2023’s ROIC was -10.12%, reflecting poor performance. The company’s financials are generally average (note: the company has been listed less than 10 years; the longer the listing, the more meaningful the financial averages). Over nine annual reports, there have been two loss years, indicating a somewhat fragile business model.

• Business Model: The company’s performance mainly depends on R&D and marketing. A detailed analysis of these drivers is necessary.

• Business Breakdown: Over the past three years (2023/2024/2025), net return on operating assets was 0.8%, --, and 9.8%, respectively; net operating profit was 15.44 million, -34.15 million, and 47.89 million yuan; net operating assets were 1.861 billion, 360 million, and 490 million yuan.

  Operating capital/revenue over these years was -0.73, 0.32, and 0.42, respectively, with operating capital (funds invested in daily operations) at -451 million, 151 million, and 126 million yuan, and revenue at 618 million, 464 million, and 301 million yuan.

The financial health check tools suggest:

1. Pay attention to the company’s cash flow status (cash and cash equivalents/ current liabilities only 98.16%, average operating cash flow over three years relative to current liabilities only -29.23%).
2. Monitor financial expenses (average net cash flow from operating activities over three years is negative).
3. Watch receivables (accounts receivable / profit has reached 448.85%).

This content is compiled by Securities Star based on public information, generated by AI algorithms (Wangxin Calculation Record 310104345710301240019), and does not constitute investment advice.