Shandong Xinhua reported audited 2025 revenue of RMB 8.75 billion, up 3.41% year-on-year, but net profit attributable to shareholders fell 38.32% to RMB 289.89 million. Basic EPS dropped to RMB 0.42, and weighted-average ROE narrowed to 5.66% from 9.79% a year earlier. Management cited intensified domestic and overseas competition and selective price reductions to defend market share.

Gross margin declined 5.33 percentage points to 18.78%. Segment-wise, Chemical Bulk Drugs delivered RMB 2.65 billion in sales (–3.30% YoY) with a gross margin of 35.71% (+1.10 ppts). Preparations generated RMB 3.99 billion (–2.13% YoY); margin compressed to 16.05% (–10.22 ppts) on volume-based procurement. Pharmaceutical Intermediates and Other Products jumped 28.07% to RMB 2.12 billion, but margin remained thin at 2.83%.

Tight cost control was evident: selling expenses fell 41.67% to RMB 341.08 million, though financial expenses surged 184.77% to RMB 34.57 million, largely reflecting adverse FX movements. Operating profit declined 31.89% to RMB 363.98 million.

Operating cash flow improved markedly, rising 45.19% to RMB 533.73 million on stricter receivables and inventory management. Net cash used in investing narrowed to RMB 103.50 million, while financing activities turned to a RMB 291.13 million outflow after higher debt repayments. Cash and cash equivalents reached RMB 1.40 billion at year-end.

The balance sheet remained stable: total assets edged up 1.84% to RMB 9.19 billion and total liabilities fell 1.90% to RMB 3.73 billion, lowering the gross gearing ratio to 28.38%. The current ratio improved to 1.43x, supported by increased cash.

The Board recommends a final cash dividend of RMB 0.15 per share (tax-inclusive), equal to an estimated payout of roughly RMB 104.50 million. The proposal is subject to shareholder approval.

Looking ahead to 2026, Shandong Xinhua plans to mitigate margin pressure through cost-reduction initiatives in APIs, accelerate launches of new and specialty drugs, expand into emerging markets, and advance its pipeline of innovative treatments, including candidates for Alzheimer’s disease and gout. The company also aims to strengthen digitalisation, optimise its debt structure, and intensify talent development to support the first year of its “15th Five-Year Plan.”