Shandong Haihua 2025 Annual Report Analysis: Parent Net Profit Loss of 1.388 Billion Yuan, Operating Cash Flow Turned Negative

Core Profit Indicators Plummet

Operating Revenue: Revenue Down 21.07% Year-on-Year Due to Industry Cycle

In 2025, the company achieved operating revenue of 4.745 billion yuan, a year-on-year decrease of 21.07% compared to 6.013 billion yuan in 2024. From the revenue structure, the core product soda ash had revenue of 3.218 billion yuan, a significant drop of 26.31% year-on-year, with its revenue share falling from 72.64% to 67.82%; caustic soda revenue was 657 million yuan, only up 3.23% year-on-year; calcium chloride revenue was 185 million yuan, down 42.69% year-on-year. By region, East China reported revenue of 690 million yuan, down 47.59% year-on-year; South China reported revenue of 422 million yuan, down 41.67% year-on-year; foreign revenue was 141 million yuan, a significant increase of 323.37% year-on-year, but its share was only 2.97%, making it difficult to offset the substantial decline in the domestic market.

Net Profit and Excluding Non-Recurring Net Profit: From Profit to Loss, Loss Exceeds 36 Times

In 2025, the net profit attributable to shareholders of the listed company was -1.388 billion yuan, while in the same period of 2024, it was a profit of 39.2167 million yuan, a dramatic decline of 3638.09%; the non-recurring net profit attributable to the parent was -1.486 billion yuan, while in the same period of 2024, it was a loss of 37.7635 million yuan, a decline of 3835.22%. The losses were primarily due to two factors: first, the increase in capacity in the soda ash industry, coupled with a decline in downstream demand, resulted in an average soda ash price drop of 32% year-on-year; second, in accordance with accounting standards, impairment provisions were made for certain fixed assets, with asset impairment losses reaching 1.199 billion yuan, a year-on-year increase of 309.8%.

Earnings Per Share: From Positive to Negative, Basic Earnings Per Share -1.55 Yuan

In 2025, the basic earnings per share was -1.55 yuan/share, compared to 0.04 yuan/share in the same period of 2024, a decline of 3975.00%; excluding non-recurring items, earnings per share was -1.66 yuan/share, compared to -0.04 yuan/share in 2024, also a significant decline.

Expense Structure Shows Significant Fluctuations

Total Expenses: Year-on-Year Slight Increase of 0.87%, Significant Structural Differentiation

In 2025, the company’s total expenses amounted to 532 million yuan, a slight increase of 0.87% compared to 528 million yuan in 2024, but the differences in expense increases and decreases were significant:

R&D Investment and Personnel: R&D Investment Grows, Personnel Structure Optimized

In 2025, the company’s R&D investment amounted to 128 million yuan, a year-on-year increase of 20.29%, and the proportion of R&D investment to operating revenue increased from 1.77% to 2.70%. The number of R&D personnel reached 558, with a year-on-year growth of 3.33%, and the proportion of R&D personnel increased from 11.49% to 12.54%. Among them, the number of R&D personnel with master’s degrees was 77, a year-on-year increase of 30.51%, and the number of R&D personnel aged 30-40 was 133, a year-on-year increase of 15.65%, further optimizing the educational and age structure of the R&D team.

Cash Flow Experiences Significant Fluctuations

In 2025, the company’s net increase in cash and cash equivalents was -914 million yuan, compared to an increase of 1.345 billion yuan in the same period of 2024, a year-on-year decline of 167.94%, with all three major cash flow items showing significant changes:

Operating Cash Flow: From Net Inflow to Net Outflow

The net cash flow from operating activities was -104 million yuan, compared to a net inflow of 1.663 billion yuan in the same period of 2024, a decline of 106.27%. The main reason was the decrease in sales revenue and the increase in cash paid for purchased goods, with total cash inflows from operating activities amounting to 5.295 billion yuan, down 15.03% year-on-year; total cash outflows from operating activities amounted to 5.399 billion yuan, an increase of 18.19% year-on-year.

Investing Cash Flow: Net Outflow Scale Significantly Expanded

The net cash flow from investing activities was -2.228 billion yuan, compared to a net outflow of 266 million yuan in the same period of 2024, a decline of 737.81%. This was mainly due to an investment of 2.32 billion yuan in Zhongyan Alkali Industry this period, with total cash outflows from investing activities amounting to 2.949 billion yuan, a year-on-year increase of 701.68%.

Financing Cash Flow: Net Inflow Scale Significantly Increased

The net cash flow from financing activities was 1.419 billion yuan, compared to a net outflow of 52 million yuan in the same period of 2024, a year-on-year increase of 2809.71%. This was mainly due to an increase in bank borrowings this period, with total cash inflows from financing activities amounting to 2.703 billion yuan, a year-on-year increase of 4715.66%.

Key Risk Factors and Countermeasures

Market Risk: Industry Cycle Fluctuations Affect Performance

The soda ash industry exhibits strong cyclicality, and product prices are easily affected by industrial policies and market supply and demand changes. In 2025, the capacity of the soda ash industry continued to expand, while the total daily melting capacity of downstream “float glass + photovoltaic” declined, highlighting the industry’s temporary supply-demand contradictions, and profit margins faced temporary challenges. Countermeasures: Establish a dynamic market monitoring system to anticipate market changes in advance, flexibly adjust marketing strategies, and increase efforts to explore emerging markets. The significant growth in foreign revenue in 2025 is a result of proactive layout.

Safety Production Risk: Inherent Risks of Chemical Production

The company’s product processes are complex, with some links involving high temperatures and high pressures, presenting certain safety production risks. Countermeasures: Emphasize the safety prevention system, strengthen safety culture construction, accelerate the pace of digital transformation and intelligence, introduce AI intelligent monitoring systems, implement equipment life cycle management, and ensure effective pre-emptive safety risk prevention.

Environmental Risk: Compliance Pressure Under “Dual Carbon” Policy

With the in-depth implementation of the national “dual carbon” policy, environmental protection standards and regulatory requirements are becoming increasingly stringent, increasing the pressure on enterprises for investment in production technology updates and environmental protection facility upgrades. Countermeasures: Actively respond to the national “dual carbon” policy, practice a green low-carbon development strategy, proactively adopt low-carbon environmental protection and energy-saving emission reduction technologies, vigorously develop clean production and circular economy, and promote the transition to high-end, intelligent, and green upgrades.

Executive Compensation Situation

In 2025, the compensation for the company’s executives showed significant differentiation. Among the executives receiving compensation from the company:

• General Manager Wang Zhihui: Received a total pre-tax compensation of 499,700 yuan from the company;
• Chief Financial Officer Wei Ludong: Total pre-tax compensation of 431,000 yuan;
• Vice General Manager Xue Peigong: Total pre-tax compensation of 416,300 yuan;
• Vice General Manager Wang Shunfu: Total pre-tax compensation of 399,200 yuan;
• Vice General Manager Zhao Yuhua: Total pre-tax compensation of 392,500 yuan;
• Vice General Manager Yang Yuhua: Total pre-tax compensation of 378,800 yuan;

Meanwhile, Chairman Sun Lingbo, Directors Wang Yongzhi, Li Jinjun, Chen Guodong, etc., received compensation from related parties and did not receive compensation from the company.

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