Jucan Optoelectronics 2025 Annual Report Analysis: Overseas Revenue Up 36.89%, Management Expenses Increased by 29.83%

Interpretation of Core Profitability Metrics

Operating Revenue: Overseas Business Is the Key Driver of Growth

In 2025, the company achieved operating revenue of RMB 3.127 billion, up 13.33% year over year. By region, domestic revenue was RMB 2.853 billion, up 11.48%; overseas revenue was RMB 275 million, up 36.89% year over year, with a much higher growth rate than domestic revenue. Overseas revenue thus became an important factor driving overall revenue growth. By product, revenue from LED chips and epitaxial wafers was RMB 1.392 billion, up 3.88%; other business revenue was RMB 1.735 billion, up 22.25%. The high growth rate of other business mainly came from business expansion in areas such as gold scrap recycling.

Net Profit and Non-GAAP Net Profit: Steady Improvement in Profit Quality

In 2025, net profit attributable to shareholders of listed companies was RMB 205 million, up 4.82% year over year. Non-GAAP net profit was RMB 199 million, up 7.10% year over year. The growth rate of non-GAAP net profit was higher than that of net profit, indicating that the company’s core business profit quality is improving. Total non-recurring gains and losses were RMB 6.1032 million, mainly including government subsidies of RMB 4.6844 million, gains from the disposal of financial assets of RMB 2.6843 million, etc. Their impact on net profit was relatively limited.

Earnings Per Share: Dilution from Expanded Share Capital

In 2025, basic earnings per share were RMB 0.28/share, down 6.67% year over year; non-GAAP earnings per share were RMB 0.27/share, down 3.57% year over year. The decline in earnings per share was mainly due to the company’s implementation of a capital reserve-to-bonus share distribution in 2025. Total shares increased from 676 million shares to 939 million shares, diluting earnings per share.

Deep-Dive Analysis of Expense Structure

Total Expenses: Administrative Expenses Become the Main Driver of Growth

In 2025, the company’s period expenses totaled RMB 178.1516 million, up 12.87% year over year. Among them, administrative expenses, finance expenses, and R&D expenses all increased to varying degrees, while selling expenses decreased slightly.

Selling Expenses: Cost Reduction through Scale Optimization

Selling expenses were RMB 20.6550 million, down 2.28% year over year. This was mainly because the company optimized its selling operation expenses. Operating expenses decreased from RMB 8.5696 million to RMB 6.2707 million. At the same time, employee compensation remained basically stable, while share-based payment expenses increased somewhat.

Administrative Expenses: Both Staffing and Operating Costs Rise

Administrative expenses were RMB 56.1250 million, up 29.83% year over year. This was mainly attributable to increases in employee compensation, operating expenses, and share-based payment expenses, reflecting that the company increased investment in building the management team, maintaining internal operations, and related areas.

Finance Expenses: Lower Interest Income Drives Up the Figure

Finance expenses were -RMB 31.0486 million, up 27.55% year over year (loss narrows). This was mainly because interest income decreased from RMB 44.4725 million to RMB 31.9430 million, while interest expense increased slightly, resulting in a smaller loss scale for finance expenses.

R&D Expenses: Ongoing Investment Strengthens Technical Capabilities

R&D expenses were RMB 132.4202 million, up 2.27% year over year. Investment was mainly concentrated in employee compensation, depreciation and amortization, material costs, etc. In 2025, the company advanced multiple R&D projects such as MLED micro-pitch applications and ultra-high-efficiency LED device variants, further consolidating technological barriers.

R&D Team and Personnel Composition

In 2025, the company had 324 R&D personnel, down 16.06% year over year. R&D personnel accounted for 19.84% of total employees, down 6.44 percentage points year over year. However, the educational background structure of R&D personnel improved notably. The number of master’s degree holders increased from 63 to 83, up 31.75% year over year; the number of PhD holders increased from 2 to 3, up 50.00% year over year. The number of bachelor’s degree holders below decreased significantly by 59.85%, and the overall educational level of the R&D team improved.

Analysis of Cash Flows and Financing & Investment

Operating Cash Flow: Scale Basically Stable

In 2025, net cash flow from operating activities was RMB 528 million, up slightly 0.58% year over year. Cash inflow from operating activities was RMB 3.937 billion, up 24.94% year over year, mainly due to increased cash received from sales of goods. Cash outflow from operating activities was RMB 3.410 billion, up 29.81% year over year, mainly due to a large increase in cash paid to purchase goods, reflecting that higher capital occupation driven by the company’s expansion of business scale.

Investing Cash Flow: Net Outflow Scale Expanded

Net cash flow from investing activities was -RMB 468 million, compared with net inflow of RMB 40 million in the prior year, turning into net outflow of RMB 4.68 billion year over year. Cash inflow from investing activities was RMB 1.269 billion, up 39.36% year over year, mainly due to an increase in cash received from the return of investments. Cash outflow from investing activities was RMB 1.737 billion, up 99.46% year over year, mainly due to a substantial increase in cash paid for investments during the period. The company increased the scale of financial asset investments such as large-denomination certificates of deposit and structured deposits.

Financing Cash Flow: Net Outflow Narrowed Significantly

Net cash flow from financing activities was -RMB 51 million. Compared with net outflow of RMB 680 million in the prior year, it narrowed to net outflow of RMB 510 million. Cash inflow from financing activities was RMB 977 million, down 33.57% year over year, mainly because cash received from obtaining borrowings decreased. Cash outflow from financing activities was RMB 1.028 billion, down 52.20% year over year, mainly because cash paid to repay debts decreased, indicating the company’s debt financing scale was reduced.

Executive Compensation Details

In 2025, among the company’s core executives’ compensation, the chairman and general manager, Pan Huaron, had a total pre-tax remuneration of RMB 1.1402 million; the director and deputy general manager, Cao Yufei, RMB 1.0282 million; deputy general manager, Xu Zhijun, RMB 0.9238 million; deputy general manager, Guo Jinhui, RMB 0.7235 million; director and deputy general manager, Xu Hua, RMB 0.6542 million; and chief financial officer and secretary to the board of directors, Lu Ye, RMB 0.6156 million. Overall compensation levels are basically aligned with the company’s profitability scale and the industry level.

Potential Risk Disclosures

Risk of Policy Changes

The LED industry in which the company operates is highly affected by international trade policies, industrial policies, and fiscal and tax policies. If tariff policy fluctuations occur in major export markets such as the United States, or if domestic industry subsidy policies are adjusted, it may have adverse effects on the company’s market expansion, revenue scale, and profitability.

Risk of Market Competition

Competition in the low-end market of the LED industry is intense. If the company cannot continuously advance the R&D and market expansion of high-end products (such as Mini/Micro LED and automotive lighting), it may face risks of falling product prices and pressure on gross margins, which in turn could affect profitability.

Risk of Technological Updates

The LED industry has a fast pace of technological iteration. If the company fails to accurately grasp the industry’s technology development trends, and if R&D in cutting-edge areas such as Micro LED and optical communications lags, product competitiveness may decline, affecting long-term development.

Risk of Product Quality

LED chip manufacturing involves more than 100 critical process parameters. If problems arise in any link, it may lead to differences in product performance or even quality incidents, triggering customer claims and adversely affecting the company’s brand and profitability.

Risk of Financial Financing

The company is still in its project construction phase, and future capacity expansion will require continued capital investment. If external financing conditions tighten, the company may face a risk of insufficient funds, affecting the schedule for project implementation.

Risk of Inventory Price Decline

At the end of 2025, the inventory balance was RMB 626 million, up 161.25% year over year, mainly due to an increase in raw materials. If market demand changes or if precious metal prices drop sharply, the risk of inventory price declines will rise, which could negatively affect the company’s profits.

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