Eagle Eye Warning: Zhejiang Liming's Operating Revenue and Net Profit Diverge

Sina Finance Listed Company Research Institute | Earnings Hawk-Eye Alert

On March 20, Zhejiang Liming released its 2025 annual report.

The report shows that the company’s total operating revenue for 2025 was 727 million yuan, up 12.75% year over year; net profit attributable to shareholders was 31.156 million yuan, down 41.61% year over year; net profit attributable to shareholders after deducting non-recurring gains and losses was 31.2734 million yuan, down 34.48% year over year; and basic earnings per share were 0.21 yuan per share.

Since the company’s listing in October 2021, it has issued cash dividends 5 times, with cumulative cash dividends already implemented totaling 163 million yuan.

The listed company financial report hawk-eye early warning system conducts intelligent quantitative analysis of Zhejiang Liming’s 2025 annual report across four major dimensions: performance quality, profitability, capital pressure and safety, and operational efficiency.

I. Performance Quality

During the reporting period, the company’s operating revenue was 727 million yuan, up 12.75% year over year; net profit was 32.9413 million yuan, down 36.56% year over year; and net cash flow from operating activities was 92.7986 million yuan, down 17.8% year over year.

From the overall performance perspective, the following require key attention:

• The growth rate of net profit attributable to shareholders continues to decline. In the past three annual reports, the year-over-year changes in net profit attributable to shareholders were 119.49%, 16.36%, and -41.62% respectively, with the downward trend continuing.

• The growth rate of net profit attributable to shareholders after deducting non-recurring gains and losses continues to decline. In the past three annual reports, the year-over-year changes in net profit attributable to shareholders after deducting non-recurring gains and losses were 286.14%, 29.51%, and -34.48% respectively, with the downward trend continuing.

• Operating income and net profit move in opposite directions. During the reporting period, operating revenue increased 12.75% year over year, while net profit decreased 36.56% year over year—operating revenue and net profit diverged in their movements.

• Net profit is relatively volatile. In the past three annual reports, net profit was 0.4 billion yuan, 0.5 billion yuan, and 0.3 billion yuan respectively; the year-over-year changes were 119.4%, 15.77%, and -36.56% respectively—net profit has been fairly volatile.

From the mix of income, costs, and period expenses, the following require key attention:

• The changes in selling expenses differ greatly from changes in operating revenue. During the reporting period, operating revenue changed 12.75% year over year, while selling expenses changed 121.35% year over year; the difference between the changes in selling expenses and operating revenue is large.

Based on the quality of cash flows, the following require key attention:

• Operating revenue and net cash flow from operating activities move in opposite directions. During the reporting period, operating revenue increased 12.75% year over year, while net cash flow from operating activities decreased 17.8% year over year—operating revenue and net cash flow from operating activities diverged.

II. Profitability

During the reporting period, the company’s gross margin was 34.27%, up 2.67% year over year; net profit margin was 4.53%, down 43.74% year over year; and return on net assets (weighted) was 2.45%, down 40.82% year over year.

From the company’s operating-side perspective on returns, the following require key attention:

• Sales net profit margin dropped significantly. During the reporting period, sales net profit margin was 4.53%, down sharply 43.74% year over year.

• Sales gross margin increased, while sales net profit margin declined. During the reporting period, sales gross margin rose from 33.38% in the same period last year to 34.27%, while sales net profit margin fell from 8.05% in the same period last year to 4.53%.

From the company’s asset-side perspective on returns, the following require key attention:

• Return on net assets declined significantly. During the reporting period, the weighted average return on net assets was 2.45%, down sharply 40.82% year over year.

• Over the recent three years, the average return on net assets has been below 7%. During the reporting period, the weighted average return on net assets was 2.45%; the average weighted average return on net assets over the most recent three fiscal years was below 7%.

• Return on invested capital is below 7%. During the reporting period, the company’s return on invested capital was 2.45%, and the average value across the three reporting periods was below 7%.

Regarding whether there are impairment risk considerations, the following require key attention:

• The year-over-year change rate of asset impairment losses exceeds 30%. During the reporting period, asset impairment losses were -0.3 billion yuan, down 115.59% year over year.

| Item | 20231231 | 20241231 | 20251231 | | Asset impairment losses (yuan) | -17.7178 million | -13.944 million | -30.0625 million |

III. Capital Pressure and Safety

During the reporting period, the company’s asset-liability ratio was 21.91%, up 11.34% year over year; the current ratio was 2.15, and the quick ratio was 1.47; total debt was 120 million yuan, of which short-term debt was 120 million yuan; short-term debt as a proportion of total debt was 100%.

IV. Operational Efficiency

During the reporting period, the company’s accounts receivable turnover was 3.7, up 4.69% year over year; inventory turnover was 2.39, up 2.45% year over year; and total asset turnover was 0.45, up 15.41% year over year.

From operating assets, the following require key attention:

• The proportion of accounts receivable/total assets continues to rise. In the past three annual reports, the accounts receivable/total assets ratios were 10.51%, 11.68%, and 12.74% respectively, showing continuous growth.

• The inventory/total assets ratio continues to grow. In the past three annual reports, the inventory/total assets ratios were 10.69%, 11.74%, and 13.15% respectively, showing continuous growth.

From long-term assets, the following require key attention:

• Long-term prepaid expenses have changed significantly compared with the beginning of the period. During the reporting period, long-term prepaid expenses were 681,000 yuan, up 206.19% from the beginning of the period.

From the three-fee (expenses) dimension, the following require key attention:

• The growth rate of selling expenses exceeds 20%. During the reporting period, selling expenses were 0.2 billion yuan, up 121.35% year over year.

• The ratio of selling expenses to operating revenue continues to increase. In the past three annual reports, the selling expenses/operating revenue ratios were 0.92%, 1.34%, and 2.62% respectively, showing continuous growth.

Click Zhejiang Liming’s hawk-eye alert to view the latest alert details and a visual preview of financial reports.

Introduction to Sina Finance listed-company financial report hawk-eye alert: The listed-company financial report hawk-eye alert is a professional, intelligent financial analysis system for listed-company financial reports. By gathering a large number of authoritative financial experts such as accounting firms and listed-company personnel, the hawk-eye alert tracks and interprets the latest financial reports of listed companies across multiple dimensions—including growth in company performance, earnings quality, capital pressure and safety, and operational efficiency—and, in the form of charts and text, highlights potential financial risk points. It provides technical solutions for professional, efficient, and convenient identification and early warning of financial risks for financial institutions, listed companies, regulatory bodies, and others.

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