Fangda Special Steel 2025 Annual Report Analysis: Net profit attributable to parent company increased by 280.18% to 942 million yuan; operating cash flow decreased by 47.08%

Core Profitability Indicator Interpretation

Operating Revenue: Down 15.43% Year-on-Year under Pressure from Volume and Price

In 2025, the company achieved operating revenue of 18.233 billion yuan, a decrease of 15.43% year-on-year, mainly due to the decline in steel product prices. From a quarterly perspective, revenue in the fourth quarter reached 5 billion yuan, the highest for the year, but overall, there was a decline in all quarters compared to the same period in 2024.

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• | | Q2 | 4.349 |
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• | | Q3 | 4.539 |
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• | | Q4 | 5.000 |
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Net Profit: Surging 280.18% Year-on-Year, Non-Recurring Net Profit Growth Even Higher

In 2025, the company achieved a total profit of 1.222 billion yuan, a year-on-year increase of 160.58%; the net profit attributable to shareholders of the listed company was 942 million yuan, a year-on-year increase of 280.18%; the net profit attributable to shareholders after deducting non-recurring gains and losses was 792 million yuan, a significant year-on-year increase of 349.49%. The substantial profit growth was mainly due to the cost benefits released from the decline in raw material prices and the implementation of the company’s cost reduction and efficiency improvement measures.

Earnings Per Share: Basic Earnings Per Share Significantly Increase to 0.407 Yuan/Share

In 2025, the basic earnings per share was 0.407 yuan/share, a year-on-year increase of 273.39%; the basic earnings per share after deducting non-recurring gains and losses was 0.343 yuan/share, a year-on-year increase of 369.86%, matching the growth rate of net profit, reflecting a significant improvement in the quality of the company’s earnings.

Expense Control Interpretation

Selling Expenses: Year-on-Year Increase of 23.50%, Scale Remains Low

In 2025, selling expenses amounted to 37.0419 million yuan, a year-on-year increase of 23.50%, mainly due to increases in employee compensation, conference fees, and other items. However, selling expenses accounted for only 0.20% of operating revenue, still at a low level, indicating the company’s sales channels are stable and expense control is effective.

Management Expenses: Year-on-Year Increase of 5.31%, Impact of Equity Incentive Expenses Eliminated

In 2025, management expenses amounted to 496.635 million yuan, a year-on-year increase of 5.31%. Management expenses in 2024 included 31.8086 million yuan in equity incentive expenses, which was not present in 2025. After excluding this impact, the actual increase in management expenses is lower, reflecting the continuous optimization of the company’s management efficiency.

Financial Expenses: Turned Positive, Mainly Due to Reduced Interest Income

In 2025, financial expenses amounted to -6.1696 million yuan, a significant increase compared to -37.1477 million yuan in the same period last year (absolute value decrease), mainly due to reduced interest income resulting from declining interest rates. The total interest income for the year was 123.496 million yuan, a year-on-year decrease of 36.3605 million yuan; interest expenses were 25.2072 million yuan, a year-on-year decrease of 1.9355 million yuan.

R&D Expenses: Year-on-Year Decrease of 20.54%, Focus on Core Product R&D

In 2025, R&D expenses amounted to 82.5978 million yuan, a year-on-year decrease of 20.54%. The company’s R&D investment mainly focused on technological upgrades for core products such as spring flat steel and high-end building materials. A total of 10 patent applications were submitted throughout the year, 16 national utility model patents were authorized, and 35 scientific papers were published, with a high conversion rate of R&D results.

R&D Personnel Situation Interpretation

In 2025, the company had 234 R&D personnel, accounting for 3.66% of the total number of employees. The educational structure of R&D personnel has been optimized, with 76.07% holding a master’s degree or higher, including 1 PhD and 177 master’s degree holders; the age structure is younger, with 76.07% of R&D personnel under 30 years old, injecting vitality into the company’s technological innovation.

Cash Flow Interpretation

Cash Flow from Operating Activities: Down 47.08% Year-on-Year, Mainly Due to Reduced Sales Collections

In 2025, the net cash flow from operating activities was 464 million yuan, a decrease of 47.08% year-on-year, mainly due to the decrease in cash received from the sale of goods and providing services. The total cash received from the sale of goods and providing services for the year was 13.638 billion yuan, a year-on-year decrease of 3.26 billion yuan; the cash paid for purchasing goods and receiving services was 11.062 billion yuan, a year-on-year decrease of 3.777 billion yuan. The decline in net cash flow from operating activities was smaller than the decline in revenue, indicating that the company’s cash flow quality is still guaranteed.

Cash Flow from Investing Activities: Net Amount of -1.30 Billion Yuan, Increase in External Investments

In 2025, the net cash flow from investing activities was -1.30 billion yuan, compared to -1.51 billion yuan in the same period last year, showing a narrowing of the net amount. The total cash paid for investments was 1.702 billion yuan, a significant year-on-year increase of 1.199 billion yuan, mainly due to increased purchases of trading financial assets; cash received from recovering investments was 1.585 billion yuan, a year-on-year increase of 1.195 billion yuan.

Cash Flow from Financing Activities: Net Amount of -1.32 Billion Yuan, Debt Repayment Pressure Eased

In 2025, the net cash flow from financing activities was -1.32 billion yuan, compared to -7.32 billion yuan in the same period last year, showing a significant increase in net amount (absolute value decrease), mainly due to reduced loan repayments during the period. The total cash received from loans was 120 million yuan, a year-on-year decrease of 109 million yuan; cash paid for debt repayment was 170 million yuan, a year-on-year decrease of 275 million yuan.

Risk Factor Interpretation

Structural Fluctuations in Market Demand Combined with External Disturbances from Geopolitical Conflicts

In 2026, the global economic recovery remains uncertain, and the foundation for stability in the domestic real estate industry is not solid. The support for demand for construction steel may be less than expected; although demand for steel in manufacturing continues to grow, it may experience temporary fluctuations due to industry capacity adjustments. Meanwhile, if geopolitical conflicts in the Middle East continue to escalate, it will disturb global energy, maritime, and trade systems, increasing the logistics and energy costs associated with steel exports, and may lead to a contraction in overseas market demand and delays in order fulfillment.

Green Low-Carbon Risk

In 2026, domestic environmental protection standards, energy consumption “dual control,” and carbon emission reduction requirements continue to increase, placing higher demands on the company’s environmental protection facility operation and maintenance, low-carbon technology research and development, and green production. Environmental protection investments continue to rise; the carbon accounting and carbon trading systems in the steel industry are further improved, and carbon emission costs will gradually increase. The operating costs of ultra-low emission operation and maintenance, as well as green energy utilization projects, will also continue to rise.

Executive Compensation Interpretation

Chairman’s Pre-Tax Remuneration: 1.7424 Million Yuan

During the reporting period, Chairman Liang Jianguo received a total pre-tax remuneration of 1.7424 million yuan from the company, mainly from basic salary, performance bonuses, etc., in line with the company’s performance growth.

General Manager’s Pre-Tax Remuneration: 127,900 Yuan

General Manager Zeng Feijun was appointed on November 17, 2025, and received a total pre-tax remuneration of 127,900 yuan from the company during the reporting period.

Deputy General Manager’s Pre-Tax Remuneration: 879,900 Yuan

Deputy General Manager Wu Jiquan received a total pre-tax remuneration of 879,900 yuan from the company during the reporting period, while also serving as a director of the company.

Chief Financial Officer’s Pre-Tax Remuneration: 742,000 Yuan

Chief Financial Officer Jian Peng received a total pre-tax remuneration of 742,000 yuan from the company during the reporting period, while also serving as a director of the company.

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