Cathay Biotech (688065) H2 2025 earnings summary

Executive summary

• Achieved record sales in core biomanufacturing products, with long-chain dicarboxylic acids annual sales surpassing 100,000 tons for the first time and bio-based piperidine securing a leading market position in China.

• Completed partial construction of new production lines for bio-based polyamide composites and battery casings, enhancing scale and downstream integration.

• Raised RMB 5.915 billion through a directed share issuance to a strategic investor, strengthening the capital base for expansion.

• Continued to invest in R&D, especially in AI-enabled synthetic biology, and expanded the patent portfolio to 562 patents.

Financial highlights

• Revenue reached RMB 3.295 billion, up 11.40% year-over-year; net profit attributable to shareholders was RMB 560.72 million, up 14.68%.

• Gross margin for core business increased to 39.52%, up 2.55 percentage points year-over-year.

• Operating cash flow decreased by 50.77% to RMB 404.12 million due to increased procurement for production needs.

• Total assets grew to RMB 23.88 billion, with net assets attributable to shareholders up 53.82% to RMB 17.70 billion, mainly due to the share issuance.

• R&D investment was RMB 237.89 million, accounting for 7.22% of revenue.

Outlook and guidance

• Plans to accelerate R&D of new biomanufacturing products, strengthen IP protection, and deepen cooperation with leading downstream companies in automotive, construction, and new energy sectors.

• Focus on scaling up bio-based polyamide applications and building a robust market ecosystem.

• Ongoing investment in AI-driven high-throughput R&D platforms and expansion of the full industry chain from non-food crops to bio-based materials.