Eagle Eye Warning: Zhengzhou Coal & Electricity's Accounts Receivable to Operating Income Ratio Continues to Rise

Sina Finance Listed Companies Research Institute | Financial Report Hawk-Eye Alerts

On March 28, Zhengzhou Coal-Electricity announced its 2025 annual report. The audit opinion was a standard unqualified audit opinion.

The report shows that the company’s total operating revenue for 2025 was 3.552 billion yuan, down 15.52% year over year; net profit attributable to shareholders was -927 million yuan, down 428.12% year over year; net profit after deducting non-recurring items attributable to shareholders was -908 million yuan, down 2811.46% year over year; basic earnings per share was -0.7612 yuan per share.

Since the company was listed in January 1998, it has delivered cash dividends 8 times, with cumulative cash dividends of 494 million yuan already implemented.

The listed-company financial report hawk-eye alert system conducts intelligent quantitative analysis of Zhengzhou Coal-Electricity’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 revenue was 3.552 billion yuan, down 15.52% year over year; net profit was -782 million yuan, down 317.15% year over year; net cash flow from operating activities was 139 million yuan, down 69.52% year over year.

From an overall performance perspective, it is necessary to pay special attention to:

• Operating revenue growth continues to decline. In the past three annual reports, the year-over-year changes in operating revenue were -2.26%, -2.74%, and -15.52% respectively, and the downward trend has continued.

• Net profit attributable to shareholders has fallen sharply. During the reporting period, net profit attributable to shareholders was -930 million yuan, down significantly by 428.12% year over year.

• Net profit attributable to shareholders after deducting non-recurring items has fallen sharply. During the reporting period, net profit after deducting non-recurring items attributable to shareholders was -910 million yuan, down significantly by 2811.46% year over year.

• Operating profit is negative for three consecutive quarters. During the reporting period, over the most recent three quarters, operating profit was -110 million yuan, -110 million yuan, and -450 million yuan, remaining negative throughout.

• First net loss in the past three years. During the reporting period, net profit turned negative, at -782 million yuan.

• Net profit fluctuates significantly. In the past three annual reports, net profit were 220 million yuan, 360 million yuan, and -780 million yuan, with year-over-year changes of -31.49%, 65.37%, and -317.15% respectively; net profit fluctuated considerably.

From the perspective of the matching between revenue, costs, and period expenses, it is necessary to pay special attention to:

• Operating revenue and taxes and surcharges move in opposite directions. During the reporting period, operating revenue’s year-over-year change was -15.52%, while taxes and surcharges’ year-over-year change was 4.14%; operating revenue and taxes and surcharges diverged.

Combining with the quality of operating assets, it is necessary to pay special attention to:

• Accounts receivable to operating revenue ratio continues to rise. In the past three annual reports, the accounts receivable to operating revenue ratio was 23.69%, 25.71%, and 31.14% respectively, showing a continuous increase.

• Inventory growth exceeds growth of operating costs. During the reporting period, inventory increased by 27.21% from the beginning of the period, while operating cost increased by -3.76% year over year; inventory growth was higher than operating cost growth.

• Inventory growth exceeds growth of operating revenue. During the reporting period, inventory increased by 27.21% from the beginning of the period, operating revenue fell by 15.52% year over year, and inventory growth was higher than operating revenue growth.

II. Profitability

During the reporting period, the company’s gross margin was 14.37%, down 42.12% year over year; net profit margin was -22.02%, down 357.05% year over year; return on net assets (weighted) was -65.86%, down 505.79% year over year.

In light of earnings from the company’s operating side, it is necessary to pay special attention to:

• Sales gross margin continues to decline. In the past three annual reports, sales gross margins were 30.64%, 24.84%, and 14.37% respectively; the downward trend has continued.

• Sales net profit margin drops sharply. During the reporting period, sales net profit margin was -22.02%, down sharply by 357.05% year over year.

In light of earnings from the company’s asset side, it is necessary to pay special attention to:

• Return on net assets falls significantly. During the reporting period, the weighted average return on net assets was -65.86%, down significantly by 505.79% year over year.

• Over the most recent three years, the average return on net assets was below 7%. During the reporting period, the weighted average return on net assets was -65.86%; over the most recent three fiscal years, the weighted average return on net assets was on average below 7%.

• Return on invested capital is below 7%. During the reporting period, the company’s return on invested capital was -16.69%, and the average over the three reporting periods was below 7%.

From whether there is impairment risk, it is necessary to pay special attention to:

• The year-over-year change rate of impairment losses exceeds 30%. During the reporting period, impairment losses were -330 million yuan, down 800.63% year over year.

From dimensions such as customer concentration and minority shareholders, it is necessary to pay special attention to:

• The top five customers account for a large proportion of revenue. During the reporting period, the ratio of sales by the top five customers to total sales was 67.32%, indicating the customer base is overly concentrated.

III. Capital pressure and safety

During the reporting period, the company’s asset-liability ratio was 81.88%, up 5.85% year over year; the current ratio was 0.41, and the quick ratio was 0.4; total debt was 6.522 billion yuan, including short-term debt of 6.457 billion yuan, and short-term debt accounted for 99% of total debt.

From the overall perspective of financial condition, it is necessary to pay special attention to:

• The current ratio continues to decline. In the past three annual reports, the current ratio were 0.45, 0.45, and 0.41 respectively; short-term debt repayment capacity is weakening.

From short-term capital pressure, it is necessary to pay special attention to:

• Large short-term debt and a gap between existing funds. During the reporting period, broad monetary funds were 2.68 billion yuan, and short-term debt was 2.96 billion yuan; broad monetary funds / short-term debt was 0.91, meaning broad monetary funds were lower than short-term debt.

• Short-term debt pressure is relatively high, putting strain on the capital chain. During the reporting period, broad monetary funds were 2.68 billion yuan, short-term debt was 2.96 billion yuan, and net cash flow from operating activities was 1.4 billion yuan; there is a difference between short-term debt, financial expenses, and monetary funds as well as net cash flow from operating activities.

From the perspective of capital management and control, it is necessary to pay special attention to:

• The ratio of interest income to monetary funds is less than 1.5%. During the reporting period, monetary funds were 2.64 billion yuan, short-term debt was 2.96 billion yuan; the company’s average ratio of interest income to monetary funds was 0.918%, below 1.5%.

• Changes in prepayments are relatively large. During the reporting period, prepayments were 0.2 billion yuan, with a change rate of 36.56% versus the beginning of the period.

• The growth rate of prepayments is higher than that of operating costs. During the reporting period, prepayments increased by 36.56% from the beginning of the period, while operating costs increased by -3.76% year over year; the growth rate of prepayments was higher than that of operating costs.

From the perspective of capital coordination, it is necessary to pay special attention to:

• Net cash flow from operating activities cannot meet the funding needs for capital expenditures, and financing channels are tightening. During the reporting period, the sum of net cash flow from operating activities and net cash flow from investing activities was -0.6 billion yuan, and net cash flow from financing activities was -3 billion yuan; operating activities cannot cover investment funding needs, and financing channels are tightening.

• Capital expenditures remain consistently higher than net cash inflow from operating activities. In the past three annual reports, cash paid for the purchase and construction of fixed assets, intangible assets, and other long-term assets were 390 million yuan, 550 million yuan, and 400 million yuan respectively; the company’s net cash flow from operating activities was 240 million yuan, 460 million yuan, and 140 million yuan respectively.

• Capital coordination needs improvement. During the reporting period, the company’s working capital requirement was -2.1 billion yuan, and working capital was -5.754 billion yuan; working capital generated from operating activities cannot fully cover long-term asset investment, and its cash payment capability was -3.65 billion yuan.

IV. Operating efficiency

During the reporting period, the company’s accounts receivable turnover ratio was 3.25, down 18.7% year over year; inventory turnover ratio was 31.53, up 3.05% year over year; total asset turnover ratio was 0.26, down 15.05% year over year.

In terms of operating assets, it is necessary to pay special attention to:

• Accounts receivable turnover ratio keeps declining. In the past three annual reports, the accounts receivable turnover ratios were 4.31, 3.99, and 3.25 respectively; the company’s accounts receivable turnover capability is weakening.

• Accounts receivable / total assets ratio continues to rise. In the past three annual reports, the accounts receivable / total assets ratios were 7.72%, 7.74%, and 8.44% respectively, showing a continuous increase.

In terms of long-term assets, it is necessary to pay special attention to:

• Total asset turnover ratio continues to decline. In the past three annual reports, the total asset turnover ratios were 0.32, 0.31, and 0.26 respectively; the company’s total asset turnover capability is weakening.

From the perspective of three fees (selling expenses, admin expenses, R&D expenses), it is necessary to pay special attention to:

• The ratio of selling expenses to operating revenue continues to rise. In the past three annual reports, the ratios of selling expenses to operating revenue were 1.62%, 1.68%, and 1.92% respectively, showing continuous growth.

Click on Zhengzhou Coal-Electricity’s hawk-eye alert to view the latest alert details and a visual preview of its financial reports.

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