WEIXING NBM(SZ:002372) 光大证券研究·2025-08-13 23:04Core Viewpoint - The company, Weixing New Materials, reported a decline in revenue and net profit for the first half of 2025, primarily due to weak downstream demand and increased competition in the market [3][4][7]. Group 1: Financial Performance - In H1 2025, the company achieved total revenue of 2.1 billion and net profit attributable to shareholders of 271 million, representing year-on-year declines of 11% and 20% respectively [3]. - In Q2 2025, the company recorded total revenue of 1.18 billion and net profit of 157 million, with year-on-year declines of 12% and 16% respectively [3]. - The company's gross profit margin decreased to 40.5%, down by 1.6 percentage points year-on-year, with declines in gross margins for PPR pipes, PE pipes, and other products [5]. Group 2: Business Segments - Revenue from retail and engineering segments both accelerated their decline, with PPR pipe revenue down by 13%, PE pipe revenue down by 13%, and PVC pipe revenue down by 4% [4]. - Notably, revenue from other products, primarily waterproof and water purification products, experienced a decline for the first time in many years [4]. Group 3: Profitability Factors - The decline in net profit was attributed to decreased revenue, lower gross margins, and an increase in expense ratios [5]. - The company's expense ratio rose to 25.0%, an increase of 0.8 percentage points year-on-year, with variations in sales, management, R&D, and financial expense ratios [5]. Group 4: Operational Quality - The company reported a net cash flow from operating activities of 580 million, an increase of 290 million year-on-year, primarily due to reductions in inventory and accounts receivable [6]. - The cash collection quality improved, with a cash collection ratio of 119%, up by 6 percentage points year-on-year [6]. Group 5: Market Outlook - Despite the revenue and profit pressures from weak downstream demand, the company maintained a high level of operational quality, showing improvements year-on-year [7]. - The company plans to observe the third-quarter performance before making any adjustments to profit forecasts, as the second half of the year typically accounts for a larger share of revenue [7].