Eagle Eye Warning: New World Business Revenue Decline

Sina Finance Listed Companies Research Institute | Financial Report Eagle-Eye Alert

On March 20, New World released its 2025 annual report. The audit opinion was a standard unqualified (clean) audit opinion.

The report shows that the company’s operating revenue for 2025 was RMB 672 million, down 7.44% year over year; net profit attributable to shareholders was RMB 121 million, down 30.17% year over year; non-recurring items excluding net profit attributable to shareholders was RMB 109 million, down 32.4% year over year; and basic earnings per share were RMB 0.31 per share.

Since listing in October 2022, the company has paid cash dividends 3 times, with cumulative implemented cash dividends of RMB 259 million. The announcement shows that the company plans to distribute a cash dividend of RMB 2 per 10 shares to all shareholders (including tax).

The listed-company financial report eagle-eye alert system conducts intelligent quantitative analysis of New World’s 2025 annual report across four major dimensions: performance quality, profitability, funding pressure and safety, and operating efficiency.

I. Performance Quality

During the reporting period, the company’s revenue was RMB 672 million, down 7.44% year over year; net profit was RMB 120 million, down 30.6% year over year; and net cash flow from operating activities was RMB 117 million, down 7.75% year over year.

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

• Operating revenue declined. During the reporting period, operating revenue was RMB 670 million, down 7.44% year over year.

• The growth rate of net profit attributable to shareholders continued to decline. In the past three annual reports, the year-over-year changes in net profit attributable to shareholders were 20.16%, 9.22%, and -30.17% respectively, with the downward trend continuing.

• Non-recurring items excluding net profit attributable to shareholders fell sharply. During the reporting period, non-recurring items excluding net profit attributable to shareholders was RMB 110 million, down significantly by 32.4% year over year.

From the matching of revenue, costs, and period expenses, it is necessary to focus on:

• A divergence between operating revenue and taxes and surcharges. During the reporting period, operating revenue changed by -7.44% year over year, taxes and surcharges changed by 21.67% year over year, and there is a divergence between operating revenue and taxes and surcharges.

Considering the quality of operating assets, it is necessary to focus on:

• Inventory growth rate is higher than the growth rate of cost of sales. During the reporting period, inventory increased by 60.62% compared with the beginning of the period, while cost of sales increased by 1.34% year over year; the inventory growth rate is higher than the cost of sales growth rate.

• Inventory growth rate is higher than the growth rate of operating revenue. During the reporting period, inventory increased by 60.62% compared with the beginning of the period, while operating revenue increased by -7.44% year over year; the inventory growth rate is higher than the operating revenue growth rate.

Considering the quality of cash flows, it is necessary to focus on:

• Net cash flow from operating activities continues to decline. In the past three annual reports, net cash flow from operating activities was RMB 260 million, RMB 130 million, and RMB 120 million respectively, showing a continuous decline.

II. Profitability

During the reporting period, the company’s gross margin was 34.91%, down 13.91% year over year; net profit margin was 17.86%, down 25.02% year over year; and return on equity (weighted) was 7.93%, down 32.34% year over year.

Considering the company’s operating performance and returns, it is necessary to focus on:

• Gross margin from sales fell sharply. During the reporting period, gross margin from sales was 34.91%, down sharply by 13.91% year over year.

• Sales net profit margin continues to decline. In the past three annual reports, sales net profit margin was 24.13%, 23.82%, and 17.86% respectively, with the downward trend continuing.

Considering returns from the company’s asset side, it is necessary to focus on:

• Return on equity declined significantly. During the reporting period, the weighted average return on equity was 7.93%, down significantly by 32.34% year over year.

From the perspective of customer concentration and minority shareholders, it is necessary to focus on:

• The revenue share from the top five customers is relatively large. During the reporting period, the ratio of sales amount from the top five customers to total sales was 60.73%, indicating customer concentration is too high.

III. Funding Pressure and Safety

During the reporting period, the company’s asset-liability ratio was 12.84%, down 13.97% year over year; the current ratio was 6.26, and the quick ratio was 5.84; total debt was RMB 2.8059 million, of which short-term debt was RMB 2.8059 million; the ratio of short-term debt to total debt was 100%.

In terms 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 increased significantly to 0.97.

In terms of long-term funding pressure, it is necessary to focus on:

• The ratio of total debt to net assets continues to rise. In the past three annual reports, the ratio of total debt to net assets was 0.14%, 0.19%, and 0.37% respectively, showing continuous growth.

• Cash coverage ratio of total debt is gradually getting smaller. In the past three annual reports, the ratio of broad monetary funds to total debt was 469.03, 311.45, and 141.89 respectively, showing a continuous decline.

From the perspective of cash and funds management, it is necessary to focus on:

• The ratio of interest income to monetary funds is less than 1.5%. During the reporting period, monetary funds were RMB 170 million, short-term debt was RMB 2.806 million, and the company’s average ratio of interest income to monetary funds was 0.47%, lower than 1.5%.

IV. Operating Efficiency

During the reporting period, the accounts receivable turnover ratio was 4.79, down 14.69% year over year; the inventory turnover ratio was 7.45, down 34.36% year over year; and the total asset turnover ratio was 0.37, down 11.82% year over year.

In terms of operating assets, it is necessary to focus on:

• The inventory turnover ratio declined significantly. During the reporting period, the inventory turnover ratio was 7.45, down significantly by 34.36% year over year.

• The ratio of inventory to total assets continues to rise. In the past three annual reports, the ratio of inventory to total assets was 1.93%, 2.48%, and 4.07% respectively, showing continuous growth.

In terms of long-term assets, it is necessary to focus on:

• Significant changes in fixed assets. During the reporting period, fixed assets were RMB 640 million, up 83.25% from the beginning of the period.

• The unit fixed-asset income production value declines year by year. In the past three annual reports, the ratio of operating revenue to original value of fixed assets was 2.34, 2.08, and 1.05 respectively, showing a continuous decline.

• Intangible assets change significantly. During the reporting period, intangible assets were RMB 50 million, up 35.76% from the beginning of the period.

From the perspective of the three-fee items, it is necessary to focus on:

• The ratio of selling expenses to operating revenue continues to rise. In the past three annual reports, the ratio of selling expenses to operating revenue was 0.75%, 0.78%, and 0.81% respectively, showing continuous growth.

• Growth rate of administrative expenses exceeds 20%. During the reporting period, administrative expenses were RMB 50 million, up 20.33% year over year.

• Growth rate of administrative expenses exceeds that of revenue. During the reporting period, administrative expenses increased by 20.33% year over year, while operating revenue decreased by 7.44% year over year; the growth rate of administrative expenses is higher than the growth rate of operating revenue.

Click New World’s Eagle-Eye Alert to view the latest alert details and a visual preview of the financial report.

Introduction to Sina Finance’s listed-company financial report Eagle-Eye Alert: Eagle-Eye Alert for listed-company financial reports is a professional, intelligent analysis system for listed-company financial reports. By gathering a large number of authoritative financial experts, including accounting firms and listed companies, Eagle-Eye Alert tracks and interprets the latest financial reports of listed companies across multiple dimensions such as company performance growth, earnings quality, funding pressure and safety, and operating efficiency, and uses text-and-image formats 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 early warnings for financial risks of listed companies.

Eagle-Eye Alert entry point: Sina Finance app—Quotes—Data Center—Eagle-Eye Alert or Sina Finance app—individual stock quote page—Financials—Eagle-Eye Alert

Disclaimer: The market involves risk; investment requires caution. This article is automatically published based on third-party databases and does not represent Sina Finance’s views. Any information appearing in this article is for reference only and does not constitute personal investment advice. If there is any discrepancy, please refer to the actual announcements. If you have any questions, please contact biz@staff.sina.com.cn.

Massive information and precise interpretation—right in the Sina Finance app

责任编辑：小浪快报