SICC (688234) Q1 2025 earnings summary

Executive summary

• Q1 2025 revenue was RMB 407.96 million, down 4.25% year-over-year; net profit attributable to shareholders was RMB 8.52 million, down 81.52% year-over-year.

• R&D investment doubled to RMB 44.94 million, representing 11.02% of revenue, up from 5.23% a year ago.

• Cash flow from operations turned positive at RMB 143.96 million, compared to negative RMB 39.06 million in Q1 2024.

Financial highlights

• Operating income: RMB 407.96 million, down 4.25% year-over-year.

• Net profit: RMB 8.52 million, down 81.52% year-over-year; EPS: RMB 0.02, down 81.82%.

• Gross margin declined as operating costs remained high; R&D and management expenses increased significantly.

• Non-recurring gains totaled RMB 4.92 million, mainly from government subsidies.

• Total assets at quarter-end: RMB 7.55 billion, up 2.61% from year-end 2024.

Outlook and guidance

• Profit decline attributed to higher R&D for large-size products, increased management fees, and reduced tax credits.

• Company expects continued impact from increased R&D and cost pressures.