Profitability improvement leads to divergence in core businesses. Xing Shuai Er expects to achieve approximately 2.3 billion yuan in revenue by 2026 | Financial report analysis

Lianhe Daily News, April 3 (Reporter Wang Bin): Driven by the dual factors of home appliances’ “trade-in for upgrades” policy and an improvement in the supply-demand relationship in the photovoltaic industry, Starshier (002860.SZ) in 2025 saw its profit growth far outpace its revenue growth. However, behind the improvement in profitability, the company’s sharply rising accounts receivable, the situation of “increasing revenue but not profit” in its photovoltaic business, and persistently high inventory levels are worth paying attention to.

The company’s annual report for 2025 released last night shows that for the full year, it achieved operating revenue of RMB 2.1555 billion, up 3.73% year on year. Meanwhile, net profit attributable to shareholders of listed companies was RMB 200 million, up 38.86% year on year. Net cash flow from operating activities also surged 174.60%, reaching RMB 86.68 million.

Lianhe Daily News reporters found that during the reporting period, the company’s photovoltaic module business volume increased 38.38% year on year, and revenue rose 12.26%, becoming the main contributor to revenue growth. However, the large increase in the profit side was not the result of a broad-based boom in the core business, but rather the outcome of multiple factors compounding.

From the breakdown of the income statement, the most significant variable comes from financial expenses. Last year, the company’s financial expenses were only RMB 8.24 million, down sharply 70.96% year on year, mainly due to the accrual of convertible bond interest in the prior period. In addition, management expenses and selling expenses also declined slightly.

With operating revenue increasing by only 3.73%, the company’s operating cost growth was kept to 2.37%, while its gross margin improved from 16.57% last year to 17.66%. Among them, the home appliance business’s gross margin increased by 3.62 percentage points to 32.72%, becoming the core driving force behind the improvement in gross margin.

At the same time, during the reporting period, the company’s non-recurring gains and losses amounted to RMB 27.2366 million, including gains from fair value changes in financial assets of RMB 20.0488 million and government subsidies of RMB 14.9308 million, which contributed to net profit to some extent.

Starshier’s main business is the R&D, production, and sales of various types of thermal protectors for refrigeration compressors, starters, sealed terminal blocks, temperature controllers for small home appliances, motor products, and solar photovoltaic modules. Notably, the company’s two major business segments show a clear pattern of divergence: photovoltaic revenue again exceeds 50%, but its profit contribution is far less than that of home appliances.

In 2025, the photovoltaic industry revenue was RMB 1.09B, up 12.26% year on year, with a gross margin of only 6.32%, up slightly by 1.31 percentage points year on year. The home appliances industry revenue was RMB 968 million, down 6.40% year on year, and its revenue contribution ratio fell to 44.94%.

By region, last year the company’s domestic revenue was RMB 2.0855 billion, up 4.16% year on year, accounting for as much as 96.78% of total operating revenue, indicating a highly concentrated market. Overseas revenue was RMB 69.3697 million, down 7.81% year on year, accounting for only 3.22%.

Worth noting is that the company’s accounts receivable ending balance reached RMB 1.03B, up 39.5% year on year, and its share of total assets rose from 20.88% to 28.21%. The annual report explains this as “caused by growth in the photovoltaic business,” but the photovoltaic business’s revenue growth was only 12.26%, while the increase in accounts receivable was far higher than the revenue increase. In addition, the concentration of accounts receivable from the company’s top five customers is as high as 75.70%; among them, the first customer alone accounts for 57.38%.

As for inventory, last year the photovoltaic industry inventory quantity increased from 54.05MW to 170.77MW, up 215.95% year on year. The company explained this as “increased stocking due to the expansion of sales scale.”

Even more worth attention is a subtle change in strategic direction. The “annual production of 2GW high-efficiency solar photovoltaic module construction project” that the company previously raised funds for has been officially terminated, and the remaining raised funds of RMB 234 million will be permanently replenished as working capital. In the annual report, the company admits that the termination reason is “an imbalance in supply and demand in the photovoltaic industry, intensified competition in the industrial chain, and project investment returns not meeting expectations or falling short.”

In its annual report, Starshier stated that in the future it will focus on deployments across the upstream and downstream of the high-efficiency permanent magnet motor, servo motor, new energy vehicle motor business, photovoltaic business, sensor component business, and the small home appliance industry chain. In 2026, the home appliance industry faces a development landscape where market adjustments and structural opportunities coexist. The photovoltaic industry still faces many challenges, but leveraging its own advantages, the company is expected to secure a more favorable position in the market.

Based on strategic planning and business development expectations, the company projects that in 2026 it will achieve full-year operating revenue of around RMB 2.3 billion. On this basis, the company’s revenue in the current year is expected to grow by approximately 6.74% year on year.

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