Zhengping Road & Bridge (SH:603843) Zheng Quan Zhi Xing·2025-08-30 23:25Financial Performance - The company reported total revenue of 344 million yuan for the first half of 2025, a decrease of 37.77% year-on-year [1] - The net profit attributable to shareholders was -88.12 million yuan, down 12.4% compared to the previous year [1] - In Q2 2025, total revenue was 197 million yuan, a decline of 37.37% year-on-year, with a net profit of -103 million yuan, reflecting a significant drop of 66.07% [1] - The gross margin was 4.66%, down 8.81% year-on-year, while the net margin was -31.18%, a decrease of 93.91% [1] Cost Structure - The combined expenses (selling, administrative, and financial) accounted for 39.34% of total revenue, an increase of 80.55% year-on-year, totaling 135 million yuan [1] - The company’s financial expenses, sales expenses, and management expenses showed a significant rise, indicating increased operational costs [1] Asset and Liability Management - Cash and cash equivalents decreased by 56.71% to 102 million yuan, while accounts receivable fell by 20.18% to 972 million yuan [1] - Interest-bearing liabilities increased by 4.25% to 2.428 billion yuan, indicating a rise in debt levels [1] - The company’s net asset value per share dropped by 67.89% to 0.41 yuan, reflecting a decline in shareholder equity [1] Historical Performance - The company has a historical median Return on Invested Capital (ROIC) of 6.57%, with the worst year being 2023, where ROIC was -10.93%, indicating poor investment returns [3] - The company has reported losses in three out of eight annual reports since its listing, suggesting a fragile business model [3] Cash Flow and Debt Concerns - The cash flow situation is concerning, with cash and cash equivalents to current liabilities ratio at only 3.05%, and the average operating cash flow over the past three years being negative [4] - The interest-bearing debt ratio has reached 33.91%, highlighting potential debt sustainability issues [4] - The financial expenses have been consistently high, with negative net cash flow from operating activities over the past three years [4]