JIANYI GROUP(SZ:002789) Zheng Quan Zhi Xing·2025-08-30 23:24Core Viewpoint - *ST Jianyi (002789) reported significant declines in revenue and net profit for the first half of 2025, indicating severe financial distress and operational challenges [1]. Financial Performance Summary - Total revenue for the first half of 2025 was 1.958 billion yuan, a decrease of 28.37% year-on-year [1]. - The net profit attributable to shareholders was -188 million yuan, a staggering decline of 3486.81% compared to the previous year [1]. - In Q2 2025, total revenue was 1.192 billion yuan, down 36.64% year-on-year, with a net profit of -157 million yuan, reflecting a decline of 43874.14% [1]. - The gross margin fell to 4.92%, a decrease of 64.42% year-on-year, while the net margin was -10.13%, down 928.83% [1]. - The total of selling, administrative, and financial expenses reached 231 million yuan, accounting for 11.81% of total revenue, an increase of 39.81% year-on-year [1]. - Earnings per share dropped to -1.18 yuan, a decline of 3483.09% year-on-year [1]. Cash Flow and Debt Analysis - Cash flow from operating activities showed a drastic decline of 1749.31%, indicating reduced cash receipts compared to the previous year [3]. - The company’s cash and cash equivalents increased by 93.60% year-on-year, reaching 1.298 billion yuan [1]. - Interest-bearing liabilities rose by 16.04% to 3.38 billion yuan, raising concerns about the company's debt levels [1]. Business Model and Historical Performance - The company relies heavily on research and marketing for its business model, necessitating a thorough examination of these driving factors [4]. - Historical performance shows a median Return on Invested Capital (ROIC) of 6.65%, with a particularly poor ROIC of -44.54% in 2021 [4]. - The company has reported losses in four out of its eight annual reports since its listing, indicating a pattern of financial instability [4]. Recommendations for Monitoring - Attention is advised on the company's cash flow situation, with a cash to current liabilities ratio of only 25.17% [5]. - The debt situation is concerning, with an interest-bearing debt ratio of 31.14% and negative average operating cash flow over the past three years [5]. - Financial expenses have been consistently high, with negative average cash flow from operating activities over the last three years [5].