Eagle Eye Warning: Nanjing Steel Co., Ltd. Revenue Decline

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

On March 16, Nanjing Steel Co., Ltd. released its 2025 annual report.

The report shows that the company’s total operating revenue for 2025 was 57.994 billion yuan, a decrease of 6.17% year-on-year; net profit attributable to shareholders was 2.867 billion yuan, an increase of 26.83%; net profit after non-recurring gains and losses was 2.467 billion yuan, up 13.02%; basic earnings per share were 0.4651 yuan.

Since listing in September 2000, the company has paid cash dividends 22 times, totaling 13.436 billion yuan.

The Listed Company Financial Report Eagle Eye Warning System conducts intelligent quantitative analysis of Nanjing Steel’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 57.994 billion yuan, down 6.17% year-on-year; net profit was 2.758 billion yuan, up 25.78%; net cash flow from operating activities was 3.674 billion yuan, up 14.06%.

Overall performance analysis highlights:

• Decline in operating revenue. During the reporting period, operating revenue was 57.994 billion yuan, a decrease of 6.17%.

• Divergence between revenue and net profit. During the reporting period, revenue decreased by 6.17% year-on-year, while net profit increased by 25.78%, indicating a divergence in their movements.

From the perspective of cost and expense ratios:

• Significant difference between sales expenses and revenue changes. During the period, revenue decreased by 6.17%, while sales expenses increased by 20.15%, showing a large discrepancy.

• Divergence between operating revenue and taxes and surcharges. During the period, revenue decreased by 6.17%, while taxes and surcharges increased by 24.28%, indicating a divergence.

Regarding operating asset quality:

• Accounts receivable to operating revenue ratio continues to grow. Over the past three annual reports, the ratios are 4.03%, 5.47%, and 6.2%, showing a continuous increase.

2. Profitability

During the reporting period, the company’s gross profit margin was 14.07%, an increase of 18.15% year-on-year; net profit margin was 4.75%, up 34.06%; return on equity (weighted) was 10.69%, an increase of 24.45%.

From the operational perspective:

• Significant increase in gross profit margin. During the period, gross profit margin was 14.07%, up 18.15%.

• Fluctuation in net profit margin. Quarterly net profit margins were 3.93%, 0.92%, -0.02%, -0.07%, with respective year-on-year changes of 19.5%, 148.51%, -69.69%, 85.51%, indicating volatility.

• Continuous growth in gross profit margin, while inventory turnover rate declines. Over the past three reports, gross profit margins are 10.6%, 11.91%, 14.07%; inventory turnover rates are 8.24, 6.39, 6 times, respectively.

• Gross profit margin continues to rise, while accounts receivable turnover rate declines. Over the past three reports, gross profit margins are 10.6%, 11.91%, 14.07%; accounts receivable turnover rates are 25.22, 19.61, 16.63 times, respectively.

Unusual gains and losses:

• Large cash inflows from disposal of equity or assets. During the period, cash inflow from disposal of subsidiaries or real estate accounted for 59.4% of net profit.

3. Capital Pressure and Safety

The company’s asset-liability ratio was 58.07%, down 2.87% year-on-year; current ratio was 0.78, quick ratio 0.54; total debt was 25.97 billion yuan, with short-term debt at 22.124 billion yuan, accounting for 85.19% of total debt.

Overall financial status:

• Declining current ratio. Over the past three reports, current ratios are 0.93, 0.84, 0.78, indicating weakening short-term debt-paying ability.

Short-term capital pressure:

• Significant increase in short-term to long-term debt ratio. The ratio rose sharply to 4.27.

• Large short-term debt, with a funding gap. The broad monetary funds were 9.57 billion yuan, short-term debt 18.21 billion yuan, broad monetary funds to short-term debt ratio is 0.53, below 1.

• Significant short-term debt pressure, cash flow strain. During the period, cash and cash equivalents were 9.57 billion yuan, short-term debt 18.21 billion yuan, net cash flow from operating activities was 3.67 billion yuan, with gaps between short-term debt, financial expenses, cash, and operating cash flow.

• Cash ratio below 0.25. During the period, the cash ratio was 0.23, below the warning threshold.

From capital management perspective:

• Growth of prepayments exceeds that of operating costs. During the period, prepayments increased by 5.01% from the beginning of the period, while operating costs decreased by 8.48%, indicating a higher growth rate in prepayments.

• Significant change in notes payable. During the period, notes payable were 3.92 billion yuan, a 50.78% increase from the beginning.

From capital coordination:

• Capital coordination needs strengthening. During the period, the company’s working capital demand was 4.74 billion yuan, with a negative operating capital of 7.63 billion yuan, indicating gaps in operating and investing activities, with cash payment ability at -1.238 billion yuan.

4. Operating Efficiency

During the period, accounts receivable turnover was 16.63 times, down 15.19%; inventory turnover was 6 times, down 6.05%; total asset turnover was 0.83, down 3.99%.

Operational asset analysis:

• Decline in accounts receivable turnover. Over the past three reports, ratios are 25.22, 19.61, 16.63, showing weakening collection efficiency.

• Decline in inventory turnover. Ratios are 8.24, 6.39, 6, indicating weakening inventory management.

• Accounts receivable as a percentage of total assets continues to grow. Ratios are 3.99%, 4.89%, 5.14%, respectively.

Long-term asset analysis:

• Total asset turnover rate continues to decline. Ratios are 0.98, 0.87, 0.83, indicating weakening efficiency.

• Revenue per unit of fixed assets decreases annually. Ratios are 2.57, 2.09, 1.83.

• Significant changes in other non-current assets. During the period, other non-current assets were 2.4 billion yuan, an increase of 36.09% from the beginning.

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

• Sales expenses increased by over 20%. During the period, sales expenses were 520 million yuan, up 20.15%.

• Sales expenses as a percentage of operating revenue continued to grow. Ratios are 0.66%, 0.7%, 0.89%.

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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, and regulatory authorities to identify and warn of financial risks.

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