Oriental Precision 2025 Annual Report Interpretation: Net Income Attributable to Parent Increases 44.88% to 725 Million Yuan, Operating Cash Flow Increases 24.43%

Operating Revenue: Steady Global Presence, Rapid Domestic Growth

In 2025, the company achieved operating revenue of 5.229 billion yuan, a year-on-year increase of 9.43%. From a business structure perspective, the corrugated board production line remains the core revenue source, generating 3.521 billion yuan, accounting for 67.34% of total revenue, up 9.68% year-on-year; water-based power products and communication machine products earned 1.016 billion yuan, a significant increase of 34.14%, with their share rising to 19.43%, becoming a new growth engine; corrugated box printing and packaging equipment revenue was 692 million yuan, down 14.63% year-on-year, possibly due to product structure adjustments.

Regionally, revenue in Mainland China reached 1.092 billion yuan, a sharp increase of 97.92%, with its proportion rising from 11.55% to 20.88%, indicating effective domestic market expansion; revenue from other countries and regions was 4.137 billion yuan, a slight decrease of 2.12%, with overall overseas business remaining stable.

Net Profit: Non-recurring Gains Boost Performance, Net Profit After Non-recurring Items Slightly Down

In 2025, net profit attributable to shareholders of the listed company was 725 million yuan, up 44.88%, significantly outpacing revenue growth. After deducting non-recurring gains and losses, net profit was 519 million yuan, a slight decrease of 1.49% year-on-year. The main reason is the substantial contribution of non-recurring gains and losses this period, including fair value changes and disposal gains/losses from financial assets and liabilities held by non-financial enterprises, totaling 257 million yuan, generating investment income of 147 million yuan. In the same period last year, this figure was a loss of 48.5 million yuan. The significant increase in non-recurring gains and losses is the core driver behind the high growth of net profit attributable to the parent company.

Earnings Per Share: Strong Net Profit Growth Drives Higher Basic Earnings Per Share

In 2025, basic earnings per share were 0.61 yuan, up 41.86% year-on-year, consistent with the growth trend of net profit attributable to the parent. After deducting non-recurring items, earnings per share were 0.44 yuan, a slight decrease of 1.52%, matching the change in net profit after non-recurring items.

Expenses: Overall Cost Control Optimization, Significant Reduction in Financial Expenses

In 2025, total operating expenses were 655 million yuan, down 1.40% year-on-year, reflecting effective cost management.

• Selling Expenses: 180 million yuan, down 6.52%, mainly due to adjustments in overseas market deployment, with commissions and agency service fees decreasing from 668 million yuan to 534 million yuan; advertising and exhibition expenses also reduced.
• Management Expenses: 390 million yuan, up 8.43%, mainly due to increased employee compensation and share-based payments, rising from 184 million yuan to 213 million yuan; intermediary fees, office expenses, and others also saw slight increases.
• Financial Expenses: -13 million yuan, a reduction of 46.00% year-on-year, mainly affected by exchange rate fluctuations, with foreign exchange losses turning into gains of 23 million yuan from a loss of 7.82 million yuan last year; interest income increased from 453 million yuan to 550 million yuan, while interest expenses decreased from 238 million yuan to 123 million yuan.
• R&D Expenses: 98 million yuan, down 6.77%, mainly due to decreased employee compensation and share-based payments from 738 million yuan to 656 million yuan, while material costs increased from 53 million yuan to 123 million yuan, indicating a restructuring of R&D investment.

R&D Personnel: Steady Growth, Continuous Optimization of Structure

In 2025, R&D staff numbered 337, an increase of 7.32%, accounting for 14.01% of total employees, up 0.11 percentage points from last year. In terms of educational background, 201 R&D personnel held a bachelor’s degree or higher, accounting for 59.64%; bachelor’s degree holders increased from 124 to 141 (13.71%), while master’s degree holders decreased from 58 to 50 (13.79%). Overall, the educational structure remains high. Age-wise, 89 R&D personnel are under 30, an increase of 11.25%, reflecting a trend toward younger talent infusion.

Cash Flow: Strong Operating Cash Flow, Expanded Investment Spending

In 2025, the company’s overall cash flow was stable, with a net increase of 342 million yuan in cash and cash equivalents, a significant improvement.

• Operating Activities: net cash inflow of 874 million yuan, up 24.43%, mainly due to increased sales collections; cash inflow from operating activities was 5.379 billion yuan, up 12.94%; cash outflows were 4.504 billion yuan, up 10.95%. The higher growth rate of inflows compared to outflows boosted net cash.
• Investing Activities: net cash outflow of 383 million yuan, a decrease of 29.23% in losses; cash inflow from investing activities was 2.853 billion yuan, a surge of 75.71%, mainly from recovering investments and increased investment income; cash outflows were 3.236 billion yuan, up 49.47%, mainly due to expanded financial asset investments.
• Financing Activities: net cash outflow of 158 million yuan, roughly flat year-on-year, mainly from loan repayments and dividend payouts; cash outflow for financing was 389 million yuan, down 6.96%, mainly due to reduced debt repayment.

Potential Risks: Uncertainty in Business Transformation and New Sector Expansion

2. Performance Volatility Risk After Major Asset Disposal: The company plans to sell assets such as Fosber Group, which will divest the corrugated board production business, a significant revenue and profit contributor. This may lead to short-term declines in revenue and net profit. The gains from this transaction are non-recurring, and future growth depends on water-based power equipment and emerging strategic industries.
3. Risk of Underperformance in Strategic Emerging Industries: The company is developing “AI + Robotics” sectors, with Dongfang Yuanqi as a platform to promote related products. However, these fields have rapid technological iteration and high commercialization difficulty. If key technological breakthroughs, product quality, and market cultivation fall short of expectations, it could impact business expansion and revenue realization in these sectors.
4. Financial Investment Volatility Risk: The company’s securities and financial investments are subject to market fluctuations, which may increase investment return uncertainties. Risks associated with entrusted investment strategies could also lead to investment losses.

Executive and Senior Management Compensation: Performance-linked Remuneration

• Chairman Tang Zhuolin: Received a pre-tax total compensation of 6.2434 million yuan during the reporting period, also receiving remuneration from related parties. His compensation is linked to the company’s overall performance and overseas business management contributions.
• General Manager Qiu Ye Zhi: Pre-tax total compensation of 3.3427 million yuan, also receiving remuneration from related parties. As the core of operations, his compensation reflects his contribution to daily management and strategic development.
• Vice President Xie Wewei: Resigned in September 2025; during the period, received pre-tax compensation of 738,300 yuan, corresponding to his work contributions during his tenure.
• Chief Financial Officer Shao Yongfeng: Pre-tax total compensation of 626,800 yuan, no remuneration from related parties, with compensation linked to financial control and capital operation performance.

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