Eagle Eye Warning: The ratio of net cash flow from operating activities to net profit for Kechuang New Materials is less than 1

Sina Finance Listed Company Research Institute | Earnings Hawk-Eye Early Warning

On March 20, Kechuang XinCai released its 2025 annual report.

The report shows that the company’s total operating revenue for the full year of 2025 was RMB 139 million, up 21.13%; net profit attributable to shareholders was RMB 17.6963 million, up 86.23%; net profit after deducting non-recurring gains and losses attributable to shareholders was RMB 15.3419 million, up 84.06%; basic earnings per share were RMB 0.21 per share.

Since listing in April 2022, the company has paid cash dividends 3 times, with cumulative implemented cash dividends of RMB 26.66 million.

The listed company earnings hawk-eye early warning system conducts intelligent quantitative analysis of Kechuang XinCai’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 operating revenue was RMB 139 million, up 21.13%; net profit was RMB 17.6963 million, up 86.23%; and net cash flow from operating activities was RMB 7.2545 million, up 210.02%.

From an overall performance perspective, it is necessary to focus on:

• Net profit is relatively volatile. In the past three annual reports, net profit was 0 yuan, RMB 9.502 million, and RMB 0.2 billion respectively; year-over-year changes were 0%, -37.8%, and 86.23% respectively. Net profit has been relatively volatile.

| Item | 20231231 | 20241231 | 20251231 | | Net profit (yuan) | - | RMB 9.5025 million | RMB 17.6963 million | | Net profit growth rate | - | -37.8% | 86.23% |

Combining cash flow quality, it is necessary to focus on:

• The ratio of net cash flow from operating activities to net profit is below 1. During the reporting period, the ratio of net cash flow from operating activities to net profit was 0.41, which is below 1, indicating weak profitability quality.

| Item | 20231231 | 20241231 | 20251231 | | Net cash flow from operating activities (yuan) | - | -RMB 6.5935 million | RMB 7.2545 million | | Net profit (yuan) | - | RMB 9.5025 million | RMB 17.6963 million | | Net cash flow from operating activities / net profit | - | -0.69 | 0.41 |

II. Profitability

During the reporting period, the company’s gross margin was 34.02%, up 10.56% year over year; net profit margin was 12.69%, up 53.74% year over year; and return on equity (weighted) was 5.28%, up 83.33% year over year.

Combining the company’s operating-side returns, it is necessary to focus on:

• Sales gross margin increased significantly. During the reporting period, sales gross margin was 34.02%, up significantly by 10.57% year over year.

| Item | 20231231 | 20241231 | 20251231 | | Sales gross margin | - | 30.77% | 34.02% | | Sales gross margin growth rate | - | -17.22% | 10.57% |

III. Capital Pressure and Safety

During the reporting period, the company’s asset-liability ratio was 11.83%, up 35% year over year; current ratio was 5.64, and quick ratio was 4.41; total debt was RMB 17.2876 million, of which short-term debt was RMB 17.2876 million. Short-term debt as a proportion of total debt was 100%.

From the perspective of short-term funding pressure, it is necessary to focus on:

• The ratio of short-term to long-term debt increased significantly. During the reporting period, short-term debt/long-term debt rose significantly to 15.91.

| Item | 20231231 | 20241231 | 20251231 | | Short-term debt (yuan) | - | RMB 1.3799 million | RMB 5.0456 million | | Long-term debt (yuan) | - | RMB 0.3593 million | RMB 0.3171 million | | Short-term debt / long-term debt | - | 3.84 | 15.91 |

From the perspective of capital control, it is necessary to focus on:

• The ratio of interest income to cash and cash equivalents is below 1.5%. During the reporting period, cash and cash equivalents were RMB 0.6 billion, short-term debt was RMB 5.046 million, and the company’s average interest income/cash and cash equivalents ratio was 1.074%, below 1.5%.

| Item | 20231231 | 20241231 | 20251231 | | Cash and cash equivalents (yuan) | - | RMB 67.5349 million | RMB 58.2104 million | | Short-term debt (yuan) | - | RMB 1.3799 million | RMB 5.0456 million | | Interest income / average cash and cash equivalents | - | - | 1.07% |

• Prepaid accounts changed significantly. During the reporting period, prepaid accounts were RMB 0.772 million, with a period-beginning change rate of 113.81%.

• The growth rate of prepaid accounts is higher than the growth rate of operating costs. During the reporting period, prepaid accounts increased by 113.81% compared with the beginning of the period, operating costs increased by 15.44% year over year, and the growth rate of prepaid accounts was higher than the growth rate of operating costs.

| Item | 20231231 | 20241231 | 20251231 | | Growth rate of prepaid accounts vs. beginning of period | - | - | 113.81% | | Operating cost growth rate | - | 19.56% | 15.44% |

• Other receivables changed significantly. During the reporting period, other receivables were RMB 0.353 million, with a period-beginning change rate of 94.56%.

• Accounts payable bills changed significantly. During the reporting period, accounts payable bills were RMB 0.1 billion, with a period-beginning change rate of 31.63%.

• Other payables changed significantly. During the reporting period, other payables were RMB 0.2 million, with a period-beginning change rate of 334.9%.

IV. Operating Efficiency

During the reporting period, the company’s accounts receivable turnover was 1.37, up 2.39% year over year; inventory turnover was 1.83, up 2.56% year over year; and total asset turnover was 0.37, up 17.21% year over year.

From the perspective of long-term assets, it is necessary to focus on:

• Changes in construction in progress are significant. During the reporting period, construction in progress was RMB 0.1 billion, up 33.88% compared with the beginning of the period.

Click Kechuang XinCai’s Hawk-Eye early warning to view the latest alert details and a visual preview of the financial report.

Sina Finance listed company earnings hawk-eye early warning introduction: The earnings hawk-eye early warning for listed company financial reports is an intelligent professional analysis system for listed company financial reports. The hawk-eye early warning collects accounting firms and listed company experts and other authoritative financial professionals to track and interpret the latest financial reports of listed companies across multiple dimensions—such as company performance growth, earnings quality, capital pressure and safety, and operating efficiency—and uses text and graphics to highlight potentially existing financial risk points. It provides financial institutions, listed companies, regulatory authorities, and others with professional, efficient, and convenient technical solutions for identifying and issuing early warnings for financial risks of listed companies.

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