Kelu Electronic 2025 Annual Report Analysis: Revenue Increased by 42.41%, Net Operating Cash Flow Dropped by 82.23%

Core Performance Indicator Interpretation

Operating Revenue: Revenue growth powered by the energy storage business boom

In 2025, the company achieved operating revenue of RMB 6.31 billion, up 42.41% year over year, with the revenue scale reaching a new high in recent years. By product segment, revenue from the energy storage business was RMB 3.80 billion, surging 160.74% year over year, becoming the core driver of revenue growth; revenue from the smart grid business was RMB 2.45 billion, down 14.34% year over year, mainly due to the impact of being barred from the Southern Power Grid market in 2024. However, the restriction was lifted in January 2026, and subsequent recovery is expected; revenue from integrated energy management and services was RMB 0.19 billion, down 64.15% year over year. By region, overseas revenue was RMB 2.77 billion, up 86.54% year over year, showing strong results in overseas market expansion, while domestic revenue was RMB 3.54 billion, up 20.18% year over year.

Net Profit and Non-GAAP Net Profit: Significant improvement in losses, but still not profitable

In 2025, net profit attributable to shareholders of the listed company was -RMB 156 million, narrowing losses by 66.33% year over year; non-GAAP net profit was -RMB 161 million, narrowing losses by 66.26% year over year. The main reasons for the loss reduction include the gradual emergence of economies of scale in the energy storage business, effective control over period expenses, and investment gains resulting from the disposal of subsidiaries. However, due to the drag from the smart grid business, ongoing increases in R&D spending, and losses from some projects, the company still has not achieved profitability.

Earnings per Share: Improving in line with the reduction in losses in net profit

In 2025, basic earnings per share were -RMB 0.0941 per share, up 66.31% year over year; non-GAAP earnings per share were -RMB 0.0968 per share, up 66.24% year over year. The improvement in EPS basically matches the magnitude of the reduction in losses in net profit.

Interpretation of Period Expenses

Total expenses: Optimized structure, and control measures showing results

In 2025, the company’s total period expenses were RMB 1.242 billion, up 0.35% year over year. The growth rate was far lower than that of revenue, indicating significant effectiveness in cost control. Sales expenses and R&D expenses grew slightly, while administrative expenses and finance expenses decreased noticeably, and the expense structure continued to improve.

Sales expenses: Slight increase alongside business scale expansion

In 2025, sales expenses were RMB 392 million, up 10.94% year over year, mainly due to the expansion of the energy storage business and overseas business, which led to a corresponding increase in marketing spending. The sales expense ratio was 6.22%, down 1.70 percentage points year over year, indicating improved efficiency in expense investment.

Administrative expenses: Strong results from cost reduction and efficiency gains

In 2025, administrative expenses were RMB 354 million, down 12.62% year over year, mainly thanks to the company’s efforts to drive cost reduction and efficiency gains, with effective control over expenses such as office expenses, travel, and consulting fees. The administrative expense ratio was 5.62%, down 3.27 percentage points year over year, reflecting improved internal management efficiency.

Finance expenses: Lower financing costs + FX gains, leading to a major reduction in spending

In 2025, finance expenses were RMB 94 million, down sharply by 57.73% year over year. The main reasons were: (1) lower financing costs, resulting in reduced interest expense; and (2) a large FX loss in 2024 caused by a sharp depreciation of the Egyptian pound, while FX fluctuations in 2025 generated FX gains from the Egyptian pound, significantly improving FX gains/losses.

R&D expenses: Ongoing high investment to solidify technical advantages

In 2025, R&D expenses were RMB 400 million, up 6.18% year over year, with R&D investment remaining at a high level. The company focuses on core technologies in smart grid and energy storage. During the year, it applied for 212 patents and obtained 145 patents. As of the end of 2025, cumulative patent applications reached 2,461 and patents granted were 1,649. The company’s technical reserves continue to expand, laying a foundation for long-term development.

R&D Personnel: Team expansion and structure optimization

In 2025, the number of the company’s R&D personnel reached 1,125, up 18.92% year over year. The proportion of R&D personnel to total employees increased to 42.10%, up 4.81 percentage points year over year. In terms of educational structure, there were 793 R&D personnel with an undergraduate degree or above, up 15.45% year over year. Of these, there were 132 R&D personnel with a master’s degree, up 25.71% year over year. The scale and quality of the R&D team improved simultaneously, providing talent support for technological innovation.

• | | Number of R&D personnel with a master’s degree (people) | 132 | 105 | 25.71% |

Interpretation of Cash Flows

Overall cash flow: Financing support, with net amount turning from negative to positive

In 2025, the company’s net increase in cash and cash equivalents was RMB 436 million. In 2024, it was a net decrease of RMB 26 million, indicating an improvement in cash flow conditions. Among them, net cash flow from operating activities fell significantly. Net cash flow from investing activities turned positive with growth, and net cash flow from financing activities turned from negative to positive. The company’s cash flow mainly relies on financing activities for support.

Net cash flow from operating activities: Down 82.23%, with pressure highlighted

In 2025, net cash flow generated from operating activities was RMB 144 million, down 82.23% year over year. The main reason is that shipment volume of energy storage products increased significantly. Supply of upstream core raw materials became tight. Purchases and settlement and advance payment items accordingly increased. As a result, cash paid for purchases of goods and receiving services increased by 63.09% year over year, and the growth rate of cash outflow from operating activities was far higher than the growth rate of cash inflow.

Net cash flow from investing activities: Up 2,472.45% in a surge—cash inflows from disposing subsidiaries

In 2025, net cash flow generated from investing activities was RMB 84 million, up 2,472.45% year over year. The main reason was cash inflows obtained from disposing of subsidiaries such as Nanchang Kelu Smart Grid Technology Co., Ltd., while construction cash outlays for projects such as Guangming Smart Energy Industrial Park decreased year over year, resulting in a significant decline of cash outflows from investing activities by 55.95%.

Net cash flow from financing activities: Turned from negative to positive, with increased financing efforts

In 2025, net cash flow generated from financing activities was RMB 214 million, while in 2024 it was -RMB 796 million. The main reasons were that the company increased its financing efforts, with cash received from borrowings up 15.82% year over year; meanwhile, cash paid for debt repayment decreased by 14.26% year over year. Net financing inflow therefore turned from negative to positive.

Risk Interpretation for the Company

Industry policy risk

The power and energy industry is influenced by macro policies. If policies related to energy storage and smart grid are adjusted, or if there are changes to tax preferential policies for high-tech enterprises, it may affect the company’s operations and development. The company needs to continuously monitor policy developments and promptly adjust its operating strategy.

Risk of trade frictions and tariff barriers

The international political and economic landscape is complex, and protectionism has risen in some countries. If trade frictions escalate, the difficulty of exporting the company’s products may increase and costs may rise, affecting overseas business earnings. The company needs to diversify its overseas market layout, strengthen localized operations, and break through trade barriers.

Risk of intensifying industry competition

The energy storage industry is developing rapidly, and companies are increasing investments one after another, making competition increasingly fierce. At the same time, technology iterations are fast. If the company fails to keep pace with technological innovation and market development is not effective, its market share may decline. The company needs to continuously increase R&D investment, optimize product structure, and expand into new scenarios and new markets.

Risk of fluctuations in raw material prices

Global supply chains are unstable. Fluctuations in raw material prices may squeeze the company’s profits and affect project delivery. The company needs to improve inventory management, establish long-term cooperation with core suppliers, optimize procurement cost structures, and hedge against the risk of price fluctuations.

Risk of exchange rate fluctuations

As the proportion of overseas business increases, fluctuations in exchange rates of settlement currencies such as the US dollar and the Egyptian pound may result in foreign exchange losses. The company needs to closely monitor exchange rate trends and use financial instruments such as hedging to avoid exchange rate risk.

Interpretation of Compensation for Executives and Directors

Chairman: Total pre-tax compensation

The total pre-tax compensation received by Chairman Li Gefeng from the company in 2025 was RMB 3.9959 million. The compensation level matches the company’s operating scale and industry position, reflecting his contribution to guiding the company’s strategy and improving operations.

General Manager: Total pre-tax compensation

The total pre-tax compensation received by General Manager Li Gefeng (who is also Chairman) from the company in 2025 was RMB 3.9959 million. He is comprehensively responsible for the company’s operating and management, driving the expansion of the energy storage business and expense control. Compensation is linked to responsibilities and performance.

Deputy General Manager: Total pre-tax compensation

The annual report did not separately disclose the total pre-tax compensation for the deputy general manager. It only disclosed director compensation for other positions held concurrently in the company, in which Director Xu Lapine and Zhang Ming do not receive compensation from the company, and receive it from the shareholder unit.

Chief Financial Officer: Total pre-tax compensation

The total pre-tax compensation received by Chief Financial Officer Xie Weiguang from the company in 2025 was RMB 1.5099 million. He is responsible for the company’s financial management and financing, and promotes a significant decline in finance expenses; compensation aligns with the results of financial control.

Click to view the original text of the announcement>>

Disclaimer: There are risks in the market; investment requires caution. This article is automatically published by an AI large-scale model based on third-party databases and does not represent Sina Finance’s viewpoints. Any information appearing in this article is for reference only and does not constitute personal investment advice. If there are discrepancies, please refer to the actual announcement. If you have any questions, please contact biz@staff.sina.com.cn.

Endless information and precise analysis are available on the Sina Finance app

Responsible editor: Xiao Lang Express