In 2025, Anker Innovations delivered another strong income statement. Operating revenue reached 30.514 billion yuan, marking a year-on-year increase of 23.49%, with net profit attributable to shareholders hitting 2.545 billion yuan, up 20.37%. However, cash flow suddenly lagged behind, as the net cash generated from operating activities was only 481 million yuan, representing a significant decline of 82.49%. Operating cash flow now stands at 18.89% of attributable net profit, a sharp contrast to the ratio of 129.84% recorded in 2024. For a consumer hardware company that has consistently achieved rapid growth and maintained profitability stability for years, such a substantial divergence between profit and cash indicates a change in its growth pattern.

The cash flow statement offers the most direct explanation for this sudden brake on cash. In 2025, rising inventory absorbed 2.004 billion yuan from operating cash flow, with operating receivables further consuming 661 million yuan, while operating payables contributed only 212 million yuan in cash. By comparison, in 2024, inventory consumed 805 million yuan of cash, while operating payables contributed as much as 1.881 billion yuan. In other words, the changes in 2025 were not merely about the company purchasing more goods; the payables that previously helped buffer working capital pressures failed to expand proportionally. Public data reveals that Anker's year-end inventory climbed from 3.234 billion yuan to 4.997 billion yuan, a year-on-year surge of 54.54%—more than double the growth rate of revenue during the same period. Based on average inventory calculations, the inventory turnover days increased from 73.24 days in 2024 to 87.70 days, while the cash conversion cycle extended from 58.63 days to 69.91 days. Over the past few years, Anker's operating efficiency had been on an improving trajectory. The cash conversion cycle was approximately 83.65 days in 2021, dropped to 73.66 days in 2022, fell further to 65.12 days in 2023, and declined again to 58.63 days in 2024. The reversal in 2025 essentially wiped out three consecutive years of improvement.

Tariffs offer a partial explanation for inventory buildup, but not the complete picture. The company's stated reasons for this trend are clear: increased business volume and proactive stockpiling driven by factors such as tariffs. This explanation holds some merit. In response to tariff and trade policy changes, the company has accelerated procurement and inventory buildup, essentially trading working capital for flexibility in supply arrangements and cost mitigation. If subsequent inventory drawdown proceeds smoothly, the cash flow pressure in 2025 may be more of a timing issue rather than a fundamental deterioration in operational quality. Demand-side indicators also provide some support. At the end of 2025, contract liabilities reached 552 million yuan, up from just 155 million yuan at the end of 2024, representing a year-on-year increase of 257.22%, primarily driven by higher advance payments received from customers. While these advance receipts cannot be directly linked to the newly added inventory, they do suggest that order demand for certain products continues to grow during the same period. The fourth quarter also showed notable recovery, with operating cash flow reaching 1.346 billion yuan, compared to -288 million yuan in the first quarter and -845 million yuan in the second quarter. The significant weakening of operating cash flow figures alone is insufficient to conclude that operational quality has deteriorated. What warrants closer attention is another signal: alongside inventory growth, the quality of that inventory is also shifting.

The impairment charge of 365 million yuan is more striking than the five billion yuan in inventory. At the end of 2025, Anker's inventory carrying value stood at 5.362 billion yuan, with inventory write-down provisions of 365 million yuan, translating to an overall provision ratio of 6.81%. In the same period of 2024, the inventory write-down provision was only 124 million yuan, with a provision ratio of 3.70%. Within one year, the write-down provision surged by 194.11%—nearly triple the prior year—while the provision ratio climbed by 3.11 percentage points. This trend deserves more attention than the mere increase in inventory levels. If the newly added inventory were primarily aimed at tariff avoidance with certainty of demand, inventory could expand rapidly without necessarily triggering a proportionate rise in the impairment rate. Anker's annual report explicitly notes that inventory impairment assessments comprehensively consider shelf age, future market demand, historical obsolescence risks, and product iteration risks. The simultaneous occurrence of inventory expansion and a rising impairment rate suggests that beyond proactive stockpiling, there are inventory risks stemming from product iterations, shifting demand, and price declines that need closer monitoring. As the product portfolio continues to broaden, such risks are likely to become an increasingly significant cost of business for Anker's multi-category expansion strategy. This is precisely the price Anker must pay for its rapid diversification. In the past, the market tended to view Anker as a consumer electronics brand built on charging products, with relatively standardized inventory management. Today, the company's operations have expanded into areas such as energy storage, security, cleaning, mother and baby products, creative printing, audio, and projection. These products vary significantly in average selling price, life cycle, regional demand patterns, and iteration speed. Multi-category expansion is raising the complexity of demand forecasting, inventory scheduling, and supply chain coordination.

Peers are also increasing inventory, yet Anker's cash gap remains particularly pronounced. Rising inventory is not unique to Anker. According to relevant data calculations, the three selected comparable consumer hardware companies in the same sector also reported inventory increases at the end of 2025. Among them, UGREEN Group grew inventory by 62.03% year-over-year, Roborock by 78.19%, and Ecovacs by 37.32%. However, cash conversion performance varied widely. In 2025, Anker's ratio of operating cash flow to attributable net profit was 18.89%, compared to 56.74% for Roborock, 192.61% for Ecovacs, and -5.01% for UGREEN. Judging operational risk solely by inventory size can be misleading, as this comparison illustrates. When increasing inventory, some companies can absorb it through payables, sales collections, and inventory turnover, while others quickly see cash flow strain. Anker's real anomaly in 2025 is not the 4.997 billion yuan inventory itself, but rather the fact that inventory growth significantly outpaced revenue growth, the write-down provision rate rose, and the buffering effect of operating payables on cash flow markedly diminished.

The coming test is whether inventory becomes a permanent cost of growth. Currently, there is insufficient evidence to define Anker's inventory growth as a demand problem. The growth in contract liabilities and the cash flow recovery in the fourth quarter both lend support to the company's explanation of proactive stockpiling. Yet, not everything can be attributed to tariffs. Anker is transitioning from a single dominant category to a diversified consumer hardware company. Revenue growth remains strong, but this growth is consuming more inventory and working capital while placing higher demands on demand forecasting. The year 2025 once again highlights the working capital pressures inherent in multi-category expansion, and this time the impact on cash flow is particularly evident. Going forward, the key metrics to watch are not whether revenue can continue growing by 20.00%, but whether inventory growth can decelerate to below revenue growth, whether the inventory write-down provision rate can stabilize, and whether operating cash flow can realign with profit. If these indicators show meaningful improvement in 2026, it will further support the explanation that the 2025 inventory increase primarily reflected phased proactive stockpiling and front-loaded investments for growth. Conversely, if inventory continues to outpace revenue growth, turnover cycles keep lengthening, and impairment rates remain persistently high, it will signal that multi-category expansion is structurally raising Anker's working capital requirements. In that case, inventory will no longer be just a temporary tariff-related disruption, but rather a lasting capital burden imposed on the company's long-term growth.