Eagle Eye Warning: Divergence Between Crown Stone Technology's Operating Income and Net Profit Changes

Sina Finance Listed Company Research Institute | Financial Report Eagle Eye Warning

On March 23, Guanshi Technology released its 2025 annual report.

The report shows that the company’s total operating revenue for 2025 was 1.365 billion yuan, a 0.44% increase year-over-year; net profit attributable to shareholders was -70.2891 million yuan, down 354.79% year-over-year; non-recurring net profit attributable to shareholders was -86.2331 million yuan, down 248.43% year-over-year; basic earnings per share were -0.96 yuan per share.

Since its listing in July 2021, the company has paid cash dividends three times, totaling 23.3545 million yuan.

The listed company financial report Eagle Eye warning system conducts intelligent quantitative analysis of Guanshi Technology’s 2025 annual report from four dimensions: performance quality, profitability, capital pressure and safety, and operational efficiency.

1. Performance Quality

During the reporting period, the company’s revenue was 1.365 billion yuan, a 0.44% increase; net profit was -70.2892 million yuan, down 354.79%; net cash flow from operating activities was 187 million yuan, up 21.43%.

Overall performance analysis highlights:

• Revenue growth slowed. During the reporting period, revenue was 1.37 billion yuan, up 0.44%, compared to a 51.95% increase in the same period last year, indicating a slowdown.

• Net profit attributable to shareholders continued to decline. Over the past three annual reports, YoY changes in net profit attributable to shareholders were -36.04%, -129.6%, -354.8%, showing a persistent downward trend.

• Non-recurring net profit attributable to shareholders continued to decline. In the last three annual reports, YoY changes were -24.57%, -153.49%, -248.43%, with a continuing downward trend.

• Operating profit has been negative for three consecutive quarters. During the reporting period, the last three quarters’ operating profits were -8.165 million, -14.128 million, -43.789 million yuan, all negative.

• Divergence between revenue and net profit. During the reporting period, revenue increased by 0.44% YoY, while net profit decreased by 354.79%, showing a divergence.

• Net profit has been in loss for two consecutive years. Over the last three annual reports, net profits were 50 million yuan, -20 million yuan, -70 million yuan, with two years of continuous loss.

From revenue, cost, and period expenses ratio analysis, key points include:

• Significant difference between changes in sales expenses and operating revenue. During the reporting period, revenue increased by 0.44%, while sales expenses increased by 25.17%, indicating a large discrepancy.

2. Profitability

During the reporting period, the company’s gross profit margin was 5.41%, down 49.33% YoY; net profit margin was -5.15%, down 352.79%; return on equity (weighted) was -7%, down 372.97%.

Key profitability points:

• Gross profit margin continued to decline. Over the last three periods, gross profit margins were 15.84%, 10.68%, 5.41%, showing a persistent downward trend.

• Net profit margin continued to decline. Over the last three periods, net profit margins were 5.84%, -1.14%, -5.15%, also showing a downward trend.

On the asset side:

• Return on net assets (ROE) has been below 7% on average over the past three years. During the period, weighted average ROE was -7%, with an average below 7% over the last three fiscal years.

• ROE has been declining. Over the last three reports, the weighted average ROE was 5.07%, -1.48%, -7%, showing a downward trend.

• Return on invested capital (ROIC) was below 7%. During the period, ROIC was -1.95%, with an average below 7% over the three periods.

3. Capital Concentration and Minority Shareholders

• Top five customers account for a large proportion of revenue. During the period, sales to the top five customers accounted for 86.46% of total sales, indicating high customer concentration.

• Top five suppliers account for a large proportion of procurement. During the period, procurement from the top five suppliers accounted for 67.85% of total procurement, indicating supplier dependency risk.

4. Capital Pressure and Safety

The company’s asset-liability ratio was 65.12%, up 2.57% YoY; current ratio was 1.21, quick ratio 1.09; total debt was 1.261 billion yuan, with short-term debt of 438 million yuan, accounting for 34.73% of total debt.

Overall financial status:

• Asset-liability ratio continued to rise. Over the last three reports, ratios were 39.08%, 63.48%, 65.12%, showing an increasing trend.

• Current ratio declined. Ratios over the last three periods were 1.8, 1.49, 1.21, indicating weakening short-term debt-paying ability.

Long-term capital pressure:

• Total debt to net assets ratio continued to increase. Over the last three periods, ratios were 40.2%, 124.65%, 129.08%, showing persistent growth.

• Short-term debt can be covered by broad monetary funds, but long-term debt cannot. During the period, broad monetary funds to total debt ratio was 0.45, with funds below total debt.

• Cash coverage of total debt is decreasing. Ratios over the last three periods were 1.15, 0.64, 0.45, showing a declining trend.

From capital management perspective:

• Interest income to monetary funds ratio is less than 1.5%. During the period, monetary funds were 350 million yuan, short-term debt 430 million yuan, with an average interest income/monetary funds ratio of 1.313%, below 1.5%.

• Large fluctuations in prepayments. During the period, prepayments were 3.82 million yuan, with a change rate of 52.91% from the beginning of the period.

• Prepayment growth rate exceeds that of operating costs. During the period, prepayments increased by 52.91% from the beginning, while operating costs grew by 6.36%, indicating higher prepayment growth.

• Significant changes in notes payable. During the period, notes payable were 10 million yuan, a 150.13% increase from the beginning.

From capital coordination:

• Operating activities cannot meet capital expenditure needs, and financing channels are tightening. During the period, net cash flow from operating activities plus investing activities was -240 million yuan; financing net cash flow was -89 million yuan, indicating operating cash flow cannot cover investment needs, and financing is tightening.

• Capital expenditure exceeds net cash inflow from operating activities. In the last three reports, cash paid for fixed assets, intangible assets, and other long-term assets were 450 million, 760 million, and 410 million yuan, respectively, while operating cash flow was -1.138 million, 150 million, and 190 million yuan.

• Free cash flow is negative. Over the last three periods, free cash flow was -1.2 billion, -7.5 billion, -0.67 billion yuan, remaining negative.

• Capital coordination with payment difficulties. During the period, working capital was 190 million yuan, with a demand of 210 million yuan; cash payments cannot fully cover operating needs, with a cash payment capacity of -2.0096 million yuan.

4. Operating Efficiency

During the reporting period, accounts receivable turnover was 3.63, down 14.66% YoY; inventory turnover was 11.36, up 18.74%; total asset turnover was 0.49, down 18.21%.

Long-term assets focus:

• Fixed assets changed significantly. During the period, fixed assets were 1.19 billion yuan, a 40.5% increase from the beginning.

• Revenue per unit of fixed assets declined annually. Over the last three reports, operating revenue to original fixed assets ratio was 3.23, 1.61, 1.15, showing a continuous decline.

• Construction in progress changed greatly. During the period, in-progress projects were 410 million yuan, a 35.96% increase from the beginning.

• Intangible assets also changed significantly. During the period, intangible assets were 63 million yuan, a 35.16% increase.

From the perspective of the three expenses (selling, administrative, R&D):

• Sales expenses grew over 20%. During the period, sales expenses were 20.5 million yuan, up 25.17%.

• Sales expenses to operating revenue ratio continued to increase. Over the last three reports, ratios were 1.18%, 1.29%, 1.61%, showing a rising trend.

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Sina Finance Listed Company Financial Report Eagle Eye Warning Introduction: The Eagle Eye Warning system is an intelligent professional analysis platform for listed company financial reports. It gathers authoritative financial experts from accounting firms and listed companies to track and interpret the latest financial reports from multiple dimensions such as performance growth, earnings quality, capital pressure and safety, and operational efficiency, providing visual alerts of potential financial risks. It offers professional, efficient, and convenient technical solutions for financial institutions, listed companies, regulators, and others to identify and warn of financial risks.

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