Eagle Eye Warning: Shuhua Sports' Operating Revenue and Net Profit Diverge

Sina Finance Listed Company Research Institute | Financial Report Eagle Eye Warning

On March 11, Shuhua Sports released its 2025 annual report, with an audit opinion of standard unqualified audit opinion.

The report shows that the company’s total operating revenue for 2025 was 1.566 billion yuan, a year-on-year increase of 10.53%; net profit attributable to shareholders was 89.21 million yuan, a decrease of 1.24% year-on-year; net profit excluding non-recurring gains and losses attributable to shareholders was 86.87 million yuan, up 24.92%; basic earnings per share were 0.22 yuan.

Since listing in November 2020, the company has paid cash dividends five times, totaling 525 million yuan. The announcement states that the company plans to distribute a cash dividend of 2 yuan (tax included) for every 10 shares to all shareholders.

The Listed Company Financial Report Eagle Eye Warning System conducts intelligent quantitative analysis of Shuhua Sports’ 2025 annual report from four dimensions: performance quality, profitability, capital pressure and safety, and operational efficiency.

1. Performance Quality

During the reporting period, the company’s revenue was 1.566 billion yuan, up 10.53% year-on-year; net profit was 89.21 million yuan, down 1.24%; net cash flow from operating activities was 107 million yuan, down 2.32%.

Overall performance analysis requires attention to:

• Divergence between revenue and net profit. During the reporting period, revenue increased by 10.53%, while net profit decreased by 1.24%, indicating a divergence.

Cash flow quality considerations:

• Divergence between operating revenue and net cash flow from operating activities. During the period, revenue grew by 10.53%, but net cash flow from operating activities decreased by 2.32%, showing divergence.

• Continuous decline in net cash flow from operating activities. Over the past three annual reports, the net cash flows were 2.4 billion yuan, 1.1 billion yuan, and 1.1 billion yuan, respectively, showing a downward trend.

• The ratio of net cash flow from operating activities to net profit continues to decline. In the past three semi-annual reports, this ratio was 1.83, 1.21, and 1.2, respectively, indicating a downward trend in earnings quality.

2. Profitability

During the reporting period, the company’s gross profit margin was 30.69%, up 0.44% year-on-year; net profit margin was 5.7%, down 10.65%; return on equity (weighted) was 7.02%, down 2.09%.

Profitability analysis highlights:

• Continuous decline in net profit margin. Over the past three annual reports, the net profit margins were 9.07%, 6.37%, and 5.7%, respectively, showing a consistent downward trend.

• Gross profit margin from sales continues to increase, while net profit margin declines. Over the past three periods, gross profit margins were 29.61%, 30.56%, and 30.69%; net profit margins were 9.07%, 6.37%, and 5.7%, respectively.

Asset-side profitability considerations:

• Return on equity (ROE) continues to decline. Over the past three annual reports, the weighted average ROE was 10.11%, 7.17%, and 7.02%, respectively, with a downward trend.

3. Capital Pressure and Safety

During the period, the company’s asset-liability ratio was 37.41%, up 1.98% year-on-year; current ratio was 1.83, quick ratio was 1.42; total debt was 236 million yuan, all short-term debt.

Overall financial condition requires attention to:

• Continuous decline in the current ratio. Over the past three annual reports, the current ratios were 2.04, 1.9, and 1.83, indicating weakening short-term debt-paying ability.

Short-term capital pressure:

• Declining cash ratio. Over the past three annual reports, cash ratios were 0.9, 0.79, and 0.76, showing a downward trend.

• The ratio of net cash flow from operating activities to current liabilities continues to decline. In the past three reports, this ratio was 0.42, 0.17, and 0.16, respectively.

Long-term capital pressure:

• The cash coverage ratio of total debt is decreasing. Over the past three reports, the ratio of broad monetary funds to total debt was 2.97, 2.4, and 2.23, respectively.

From capital management perspective:

• Large fluctuations in prepayments. During the period, prepayments were 20 million yuan, with a change rate of 34.44% from the beginning of the period.

• The ratio of prepayments to current assets continues to grow. Over the past three reports, this ratio was 0.71%, 1.14%, and 1.55%.

• Growth rate of prepayments exceeds that of operating costs. During the period, prepayments increased by 34.44% from the beginning, while operating costs grew by 10.31%, indicating a higher growth rate in prepayments.

• Significant changes in notes payable. During the period, notes payable were 20 million yuan, with a change rate of 273.41% from the beginning.

4. Operating Efficiency

During the period, the company’s accounts receivable turnover was 4.56, up 0.94%; inventory turnover was 4.31, down 5.18%; total asset turnover was 0.77, up 8.6%.

Operational asset considerations:

• The proportion of accounts receivable to total assets continues to grow. Over the past three reports, this ratio was 15.25%, 16.19%, and 17.64%.

• The ratio of inventory to total assets continues to increase. Over the past three periods, it was 10.08%, 11.62%, and 13.21%.

Long-term assets to monitor:

• Long-term deferred expenses fluctuate significantly. During the period, long-term deferred expenses were 20 million yuan, up 76.66% from the beginning.

• Intangible assets change considerably. During the period, intangible assets were 110 million yuan, an increase of 44% from the beginning.

From the perspective of the three expenses (selling, administrative, R&D):

• Selling expenses as a percentage of operating revenue continue to rise. Over the past three reports, ratios were 9.94%, 11.37%, and 11.4%.

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Sina Finance Listed Company Financial Report Eagle Eye Warning Introduction: The Eagle Eye Warning System is an intelligent professional analysis system for listed company financial reports. It gathers authoritative financial experts from accounting firms and listed companies to track and interpret the latest financial reports from multiple dimensions such as performance growth, earnings quality, capital pressure and safety, and operational efficiency, providing visual alerts for potential financial risks. It offers professional, efficient, and convenient technical solutions for financial institutions, listed companies, and regulatory authorities to identify and warn of financial risks.

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