Yizhimu Ginseng 2025 Annual Report Analysis: Revenue Increased by Nearly 20% to 739 million yuan; Net profit attributable to parent decreased by 23.05%

Interpretation of Operating Revenue

In 2025, the company achieved operating revenue of 739,287,297.95 yuan, an increase of 19.91% compared to 616,519,674.06 yuan in the same period last year. By product, konjac powder revenue was 514,911,876.34 yuan, up 18.74% year-on-year; konjac food revenue was 213,415,956.59 yuan, up 24.38% year-on-year; konjac beauty product revenue was 3,212,522.92 yuan, down 37.71% year-on-year. By region, domestic sales revenue was 516,590,018.78 yuan, up 18.52% year-on-year; foreign sales revenue was 221,779,926.29 yuan, up 23.42% year-on-year.

The revenue growth was mainly due to the company’s strengthened market promotion of the health value and application scenarios of konjac, which drove up the sales price of konjac powder and increased the sales volume of konjac food, with a significant contribution from the growth of konjac powder sales and a rapid growth rate for konjac food sales.

Interpretation of Net Profit

In 2025, the net profit attributable to shareholders of the listed company was 66,724,607.89 yuan, a decrease of 23.05% compared to 86,716,564.59 yuan in the same period last year. The decline in net profit was mainly due to the rising prices of konjac raw materials, which narrowed the product gross profit margin. The company’s gross profit margin for 2025 was 19.99%, a decrease of 6.66 percentage points from last year’s 26.65%.

Interpretation of Deducted Non-recurring Net Profit

In 2025, the net profit attributable to shareholders of the listed company after deducting non-recurring gains and losses was 59,896,520.64 yuan, a decrease of 27.73% compared to 82,884,272.82 yuan in the same period last year. The decline in deducted non-recurring net profit was greater than that of net profit, mainly because the net amount of non-recurring gains and losses for 2025 was 6,828,087.25 yuan, an increase from 3,832,291.77 yuan last year, including government subsidies included in the current profit and loss amounting to 10,286,900.01 yuan, up 50.71% from last year.

Interpretation of Basic Earnings Per Share

In 2025, the basic earnings per share was 0.73 yuan/share, a decrease of 38.66% compared to 1.19 yuan/share in the same period last year. The decline in earnings per share was greater than the decline in net profit, mainly because the company implemented a distribution of equity in 2025, converting capital reserves into share capital, increasing the share capital from 73,754,000 shares at the beginning of the period to 103,170,886 shares at the end of the period, which diluted the earnings per share due to the enlarged share capital.

Interpretation of Deducted Earnings Per Share

In 2025, the deducted earnings per share was 0.66 yuan/share, a decrease of 41.07% compared to 1.12 yuan/share in the same period last year (calculated based on last year’s deducted net profit of 82,884,272.82 yuan and the initial share capital of 73,754,000 shares), with a decline greater than that of deducted net profit, also affected by the increase in share capital.

Interpretation of Expenses

In 2025, the total period expenses of the company were 71,514,268.58 yuan (sales expenses + management expenses + R&D expenses + financial expenses), an increase of 17.32% compared to 60,958,620.07 yuan in the same period last year. The growth rate of expenses exceeded the growth rate of revenue, further compressing the profit margin.

Interpretation of Sales Expenses

In 2025, sales expenses were 24,576,201.28 yuan, an increase of 15.78% year-on-year, mainly due to increases in employee compensation, website and e-commerce platform technical service fees, and share-based payments. Employee compensation amounted to 11,230,036.49 yuan, up 0.44% year-on-year; website and e-commerce platform technical service fees were 3,658,353.26 yuan, up 69.75% year-on-year; share-based payments were 2,376,770.00 yuan, up 222.35% year-on-year. The sales expense ratio was 3.32%, slightly down from 3.44% last year, indicating improved efficiency in expense investment.

Interpretation of Management Expenses

In 2025, management expenses were 19,437,540.76 yuan, an increase of 15.73% year-on-year, mainly due to increases in employee compensation and intermediary service fees. The management expense ratio was 2.63%, slightly down from 2.72% last year, reflecting effective expense control.

Interpretation of Financial Expenses

In 2025, financial expenses were -165,242.28 yuan, an increase of 91.06% year-on-year (indicating a decrease in financial income), mainly due to a year-on-year decrease in interest income and government interest subsidies. Interest income in 2025 was 565,892.47 yuan, down 57.15% from 1,320,603.30 yuan last year; government interest subsidies were 297,800.00 yuan, down 65.92% from 873,839.58 yuan last year.

Interpretation of R&D Expenses

In 2025, R&D expenses were 27,665,768.82 yuan, an increase of 16.32% year-on-year, mainly due to increases in R&D materials, employee compensation, and share-based payments. R&D materials amounted to 18,031,457.20 yuan, up 10.60% year-on-year; employee compensation was 6,380,361.19 yuan, up 20.87% year-on-year; share-based payments were 928,798.75 yuan, up 233.33% year-on-year. The R&D expense ratio was 3.74%, slightly down from 3.86% last year, maintaining stable R&D investment intensity.

Interpretation of R&D Personnel Situation

At the end of 2025, the company had a total of 92 R&D personnel, an increase of 14 from 78 at the beginning of the period. The proportion of R&D personnel to the total number of employees increased from 12.79% at the beginning of the period to 15.97%. In terms of educational background, the number of R&D personnel with a master’s degree increased from 7 at the beginning of the period to 11, while those with a bachelor’s degree slightly decreased from 15 to 14, and those with an associate degree or lower increased from 56 to 67, indicating an expanded R&D team and an increased proportion of high-educated talents.

Interpretation of Cash Flow

In 2025, the net increase in cash and cash equivalents for the company was -6,132,091.80 yuan, an improvement compared to -23,831,094.12 yuan last year, indicating some relief in cash outflow pressure, but overall still showing a net outflow status.

Interpretation of Net Cash Flow from Operating Activities

In 2025, the net cash flow from operating activities was 197,199,402.42 yuan, turning from negative to positive compared to -68,681,925.78 yuan in the same period last year, with a year-on-year increase of 387.12%. This was mainly due to an increase in sales collections and a decrease in raw material purchases. In 2025, cash received from sales of goods and services was 792,853,202.68 yuan, up 22.80% year-on-year; cash paid for purchases of goods and services was 513,911,408.26 yuan, down 19.80% year-on-year.

Interpretation of Net Cash Flow from Investing Activities

In 2025, the net cash flow from investing activities was -105,839,832.08 yuan, a decline of 967.53% compared to 12,200,072.55 yuan in the same period last year, mainly due to the maturity of financial products at year-end and a year-on-year decrease in long-term asset investments. In 2025, cash paid for investments was 2,150,000,000.00 yuan, an increase of 51.44% compared to 1,419,699,000.00 yuan last year; cash paid for the acquisition of fixed assets, intangible assets, and other long-term assets was 56,939,555.63 yuan, a decrease of 25.05% from 75,966,080.87 yuan last year.

Interpretation of Net Cash Flow from Financing Activities

In 2025, the net cash flow from financing activities was -97,490,208.99 yuan, a decline of 398.56% compared to 32,653,362.20 yuan in the same period last year, mainly due to the repayment of previous loans and an increase in dividend distributions. In 2025, cash paid for debt repayment was 102,000,000.00 yuan, an increase of 13.33% from 90,000,000.00 yuan last year; cash paid for dividend distributions or interest payments was 37,615,158.99 yuan, an increase of 68.44% from 22,331,149.25 yuan last year.

Interpretation of Possible Risks

Risk of Fluctuations in Raw Material Prices

Konjac and its semi-finished products constitute a high proportion of the company’s production costs. Fluctuations in their prices will significantly impact the production costs of the company’s main products. In 2025, rising raw material procurement prices led to a year-on-year increase of 30.80% in operating costs, exceeding revenue growth and compressing profit margins. The company is addressing this by monitoring procurement market trends, strengthening long-term relationships with suppliers, expanding procurement channels, supplementing with imported raw materials, and increasing R&D investments, but cannot completely eliminate the risks posed by price fluctuations.

Risk of High Supplier Concentration

The company has a high concentration of suppliers for its main raw materials. Although long-term stable relationships have been established with major suppliers, adverse changes in their business or relationships could negatively impact the company’s operations and business. The company is mitigating this risk by strengthening the assessment of existing suppliers, establishing a backup supplier resource pool, and nurturing new suppliers, but supplier concentration risks remain.

Risk of Product Safety and Quality Control

The company’s products involve numerous suppliers and raw materials, with complex process controls and high quality inspection requirements. If there are lapses in quality management leading to product quality issues, it could result in compensation risks and negatively impact the company’s reputation and product sales. Additionally, if national product quality inspection standards are further raised, this may increase production costs, affecting the company’s profitability. The company is reducing risks by improving quality control processes, formulating internal control standards, and strictly implementing quality management systems, but pressure on quality control remains.

Risk of Declining Foreign Sales Revenue

In 2025, revenue from overseas customers accounted for 30.00% of total revenue. Influenced by foreign exchange trends, changes in trade policies, and geopolitical conflicts, the company may face risks of declining foreign sales revenue in the future. The company is addressing this by enhancing customer stickiness through technological R&D, strengthening customer relationship management, and expanding new overseas customers, but uncertainties in the overseas market remain significant.

Risk of Inventory Occupying Funds and Impairment

At the end of 2025, the company’s inventory book value was 310,308,973.00 yuan, mainly composed of raw materials and semi-finished products. As the company’s business scale continues to expand, the future inventory balance may continue to increase. If sales and collections are not realized in a timely manner, the company’s inventory turnover ability may decline, affecting the efficiency of fund utilization, thus adversely impacting the company’s operating results and cash flow. Furthermore, if the market environment experiences severe fluctuations, the company’s inventory may also face risks of price depreciation. The company is mitigating these risks through reasonable procurement layouts and implementing order-based procurement, but inventory management pressure remains.

Interpretation of the Total Pre-tax Remuneration Received by the Chairman During the Reporting Period

During the reporting period, the company’s chairman Wu Ping received a total pre-tax remuneration of 713,800 yuan, which was primarily determined based on the company’s 2025 annual remuneration plan for directors and senior management, and the assessment has been completed.

Interpretation of the Total Pre-tax Remuneration Received by the General Manager During the Reporting Period

During the reporting period, the company’s general manager Wu Ping (who also serves as chairman) received a total pre-tax remuneration of 713,800 yuan, with the remuneration determination basis and assessment status consistent with that of the chairman.

Interpretation of the Total Pre-tax Remuneration Received by the Vice Presidents During the Reporting Period

During the reporting period, the total pre-tax remuneration received by the company’s vice presidents Gou Chunpeng, Peng Pai, Li Xia, and Chen Xiaomei were 698,200 yuan, 706,600 yuan, 430,000 yuan, and 489,200 yuan respectively, with remuneration determined according to the company’s 2025 annual remuneration plan for directors and senior management, and assessments completed for all.

Interpretation of the Total Pre-tax Remuneration Received by the Financial Director During the Reporting Period

During the reporting period, the company’s financial officer Huang Zhaosheng received a total pre-tax remuneration of 500,000 yuan, with remuneration determined according to the company’s 2025 annual remuneration plan for directors and senior management, and the assessment has been completed.

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