A-shares industrial drone "Double Heroes" achieve impressive performance in 2025: Q4 results explode simultaneously, but operating cash flow "bleeds"

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Reporter from The Daily Economic News | Xu Shuai    Editor from The Daily Economic News | Wei Wenyi

Following Vertically and Horizontally Co., Ltd.’s disclosure of its 2025 annual report on the evening of March 31, the performances of two leading industrial drone companies—Vertically and Horizontally Co., Ltd. (SH688070, share price 46.94 yuan, market cap 4.111 billion yuan) and SineDrone (SH688297, share price 49.80 yuan, market cap 33.615 billion yuan)—have both been revealed.

A reporter from The Daily Economic News (hereinafter “reporter from The Daily Economic News”) noted that both companies saw a substantial year-on-year increase in revenue and net profit in 2025. Vertically and Horizontally successfully turned losses into profits, while SineDrone achieved revenue of over 3.0 billion yuan and more than doubled net profit.

It is worth mentioning that Vertically and Horizontally and SineDrone both experienced a集中 outbreak of performance in the fourth quarter of last year. However, behind the high growth in performance, both companies’ operating cash flows showed net cash outflows. This reflects that while the industry is expanding rapidly, collections have not kept pace.

According to the annual report, Vertically and Horizontally Co., Ltd. achieved operating revenue of 621 million yuan in 2025, up 30.94% year on year; net profit attributable to shareholders of listed companies was 10.68 million yuan, turning losses into profits year on year.

Image source: Vertically and Horizontally Co., Ltd.’s 2025 annual report

Earlier, on March 16, another industrial drone company, SineDrone, also delivered an impressive set of results: in 2025, operating revenue was 3.016 billion yuan, up 340.11% year on year; net profit attributable to shareholders of listed companies was 88.5749 million yuan, up 264.28% year on year.

Image source: SineDrone’s 2025 annual report

After sorting the data, the reporter from The Daily Economic News found that besides strong growth in both revenue and profit, changes in Vertically and Horizontally’s gross margin are also worth关注. In 2025, Vertically and Horizontally’s consolidated gross margin was 49.91%, up 7.71 percentage points year on year. This improvement was mainly driven by optimization of product mix: the revenue proportion of the “unmanned standby system,” which has a high gross margin, jumped from 5.81% in the previous year to 26.8%. In addition, growth in overseas training business and special aviation flight service projects also contributed positively to the gross margin increase.

Meanwhile, the sharp growth in SineDrone’s revenue and the notable changes in its financial structure likewise indicate that the industry is in a phase of rapid expansion. During the reporting period, the company’s revenue from drone system products and services surged 340.11% year on year, mainly because the number of product deliveries increased significantly compared with the previous year.

In response, Vertically and Horizontally’s Secretary to the Board of Directors, Li Xiaoyan, told the reporter from The Daily Economic News that the company’s gross margin improvement mainly benefited from two factors: first, the rapid development of the low-altitude digital economy market; and second, the company’s continued deepening of end-to-end solution offerings—expanding the proportion of software and overseas sales, while strengthening control over costs and expenses.

After comparing the quarter-by-quarter financial data of the two companies, the reporter from The Daily Economic News found that in the fourth quarter of 2025, both companies experienced a concentrated surge in performance.

Vertically and Horizontally’s quarterly figures show that in the fourth quarter of 2025, the company achieved operating revenue of 299 million yuan, accounting for nearly half of the full-year total revenue; net profit attributable to shareholders of listed companies was 30.4916 million yuan, successfully reversing the losses in the first half of the year.

Image source: Vertically and Horizontally Co., Ltd.’s 2025 annual report

In the fourth quarter of 2025, SineDrone achieved operating revenue of 1.468 billion yuan, almost matching the total revenue of the first three quarters of 2025; net profit attributable to shareholders of listed companies in the fourth quarter was also 54.7351 million yuan, making it the absolute main driver of full-year performance.

Image source: SineDrone’s 2025 annual report

Vertically and Horizontally stated that among its terminal customers—such as state-owned enterprises, government agencies, public institutions, and higher education institutions—these types of customers generally formulate procurement plans in the first half of the year. After approvals, they conduct tendering and project implementation, and then deliver and verify acceptance centrally at year-end. Based on these characteristics, the company’s sales revenue shows seasonal fluctuations.

Although the companies’ concentrated delivery and acceptance in the fourth quarter of 2025 created prosperity in the income statement, combining the financial data shows that the two companies share a commonality in the key financial metric “net cash flow from operating activities”—both are in a net outflow state.

Vertically and Horizontally’s net cash flow from operating activities last year fell sharply year on year, with specific data of -68.4724 million yuan. The company said that as the operating scale expanded, the increase in cash outflows from operating activities was relatively larger, while the recovery of accounts receivable did not increase year on year.

SineDrone’s net cash flow from operating activities last year was -1.388 billion yuan, and accounts receivable also grew significantly year on year. The company said that affected by adjustments to customers’ payment collection schedules, and at the same time the company continued to increase investment in inventory to ensure the timely delivery of subsequent products, collectively led to the net cash flow from operating activities during the reporting period declining compared with the same period of the previous year.

Both companies also mentioned their operating plans for this year. Vertically and Horizontally stated that this year it will continue to deepen its cultivation of domestic and overseas industry markets, increase low-altitude digital economy initiatives—especially pilots and demonstration operations in county-level government governance and vertical industries—and focus on advancing the landing and delivery of key projects of Vertically and Horizontally Yunlong.

SineDrone also stated that it will proactively break into new fields, move into new user segments, and lay out new products, promoting the civil market’s shift from “product competition” to “ecosystem competition” at an accelerated pace. It will speed up the construction of a platform-based, scenario-based integrated services system to enhance overall market responsiveness and operational capability.

Disclaimer: The contents and data in this article are for reference only and do not constitute investment advice. Please verify before using. Operate at your own risk.

Cover image source: Media resource database of The Daily Economic News

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