Baiwei Storage 2025 Annual Report Analysis: Non-recurring Net Profit Increased by 1072.25%, Operating Cash Flow Net Amount Dropped by 469.59%

Operating Revenue: Industry Recovery Drives Doubling Growth

In 2025, Beiwei Storage achieved operating revenue of 11.302 billion yuan, a year-on-year increase of 68.82%, nearly doubling the scale compared to 2024. This growth is mainly driven by an upward industry cycle in storage, with explosive demand for storage products in downstream scenarios such as AI servers, AI PCs, and smart vehicles. The company seized industry opportunities to expand globally with top-tier clients, significantly increasing product sales. Quarterly data shows revenue accelerating each quarter, with Q4 revenue reaching 4.727 billion yuan, accounting for 41.82% of the annual total, indicating strong industry demand in the second half of the year boosting company performance.

Net Profit: Non-recurring Profit Surges Over 10 Times, Profit Quality Significantly Improved

In 2025, the company’s net profit attributable to shareholders of the listed company reached 853 million yuan, a year-on-year increase of 429.07%; non-recurring net profit was 785 million yuan, up 1072.25% YoY, with notable improvement in profit quality. The growth rate of non-recurring net profit far exceeds that of net profit, mainly because non-recurring gains and losses amounted to 67.89 million yuan, only 7.96% of net profit, indicating core business remains the main profit source.

Quarterly performance shows sequentially rising profits, with Q4 net profit attributable to shareholders reaching 823 million yuan, accounting for 96.48% of the annual profit, reflecting industry prosperity in the second half driving substantial profit release.

Earnings Per Share: Profit Explosion Leads to Significant EPS Growth

In 2025, basic earnings per share (EPS) was 1.87 yuan, up 405.41% YoY; non-recurring EPS was 1.72 yuan, up 975.00%. The substantial EPS increase is mainly due to explosive net profit growth. The company issued 30.0253 million new shares to specific investors in 2025, expanding share capital, but net profit growth far outpaced share expansion, significantly boosting EPS.

Expenses: Scale expansion drives cost growth; R&D investment continues to increase

In 2025, total operating expenses were 1.564 billion yuan, up 45.72% YoY, with cost control effects evident as expense growth was below revenue growth. Expenses increased across categories mainly due to business scale expansion and increased R&D investment.

R&D Staff: Expansion of R&D Team and Strengthening Talent Reserve

As of the end of 2025, the company’s R&D personnel totaled 1,262, an increase of 364 from the previous year, accounting for 44.25% of total employees, up 1.04 percentage points YoY. R&D personnel’s total salary was 39.422 million yuan, up 68.60%, with average annual salary at 312,400 yuan, up 19.97%. The company intensified efforts to attract and retain R&D talent, improving both team size and quality.

Cash Flow: Operating cash flow turns negative; Investment and Financing fluctuate significantly

In 2025, net cash increase was 691 million yuan, with ending cash and cash equivalents of 1.103 billion yuan, indicating sufficient liquidity. However, cash flow structure shows divergence: operating cash flow turned negative, while investment outflows widened, and financing inflows surged.

Operating Cash Flow: Increased procurement causes cash flow to turn negative

In 2025, net cash from operating activities was -1.965 billion yuan, a decrease of 469.59% YoY, shifting from a net inflow of 532 million yuan in 2024. This mainly results from increased raw material procurement driven by industry upturn, with procurement expenses rising faster than sales collection.

Investing Cash Flow: Capacity expansion leads to larger outflows

In 2025, net cash used in investing activities was -1.631 billion yuan, an increase of 60.86% YoY. The main reason is capacity expansion, with increased payments for fixed assets, intangible assets, and other long-term investments, including investments in advanced packaging and storage manufacturing projects.

Financing Cash Flow: Borrowings and private placements significantly boost inflows

In 2025, net cash from financing activities was 4.333 billion yuan, up 481.73%. This is mainly due to increased bank borrowings for capacity expansion and a private placement raising 2.039 billion yuan, providing ample funds for business growth.

Potential Risks

Core Competitiveness Risks

2. R&D Failure Risk: Rapid technological iteration in the semiconductor storage industry means that if product and technology development diverge from market trends or key technologies and performance indicators do not meet expectations, R&D failure risks arise, and R&D investments may not be recovered.

3. Core Technology Leakage or Confidentiality Risks: The company holds a series of proprietary core technologies. If these are leaked or compromised, it could adversely affect sustainable operations.

4. Talent Loss Risk: Industry competition for technical talent is fierce; losing key R&D personnel could harm the company’s ongoing competitiveness and business development.

Operational Risks

2. Macroeconomic and Performance Decline Risks: Deterioration of the global macroeconomic environment or changes in international trade could impact wafer supply and downstream customer demand, negatively affecting performance.

3. Raw Material Price Fluctuation Risks: Storage wafer prices are highly volatile due to supply and demand, which could lead to significant fluctuations in product prices and profit margins, and potentially inventory write-downs.

4. Supplier Concentration Risks: The company’s main raw material—storage wafers—is mainly purchased from Samsung, SK Hynix, and other few suppliers. Changes in their operations or relationships could impact supply stability.

5. International Trade and Equipment Import Restrictions: Some advanced packaging and testing equipment depend on imports. Escalating trade disputes could hinder equipment import, affecting project timelines and expected benefits.

6. Customer Concentration Risks: In 2025, the top five customers accounted for 40.95% of revenue. Changes in relationships or demand from major clients, without timely new customer development, could impact performance.

7. Brand Licensing Risks: Some business segments rely on brand licenses from HP, Acer, etc. If licenses expire or are not renewed, revenue and profitability could be affected.

8. Control Rights Instability Risks: The actual controller, Sun Chengsi, holds only 17.69%, indicating potential instability in control, which could impact corporate governance.

Financial Risks

2. Memory Product Price Fluctuation Risks: Memory prices are highly sensitive to market supply and demand, potentially causing large swings in performance and profitability.

3. Inventory and Write-down Risks: As of the end of 2025, inventory was 7.868 billion yuan, accounting for 50.70% of total assets. Significant market changes could lead to inventory write-downs affecting results.

4. Negative Cash Flow from Operating Activities: Operating cash flow has been negative for two consecutive years (2023: -1.966 billion yuan; 2025: -1.965 billion yuan). Without improvements in inventory turnover, this may continue, impacting operations.

5. Debt Repayment Risks: As of the end of 2025, the asset-liability ratio was 64.47%. External adverse changes or financial fluctuations could pose repayment risks.

Industry Risks

2. Raw Material Price Volatility: Rapid supply-demand changes in storage wafers cause cost fluctuations.

3. Fast Industry Technological Updates: The industry is highly competitive with short product life cycles; failure to keep up with technological trends may lead to loss of market share or obsolescence.

4. Talent Shortage in Domestic Market: The semiconductor storage industry faces talent shortages and high costs, increasing operational risks.

Macroeconomic Risks

2. Intellectual Property Risks: Inadequate IP protection could weaken competitive advantage and lead to legal disputes.

3. Leasing Property Risks: The main office is in a city renewal plan; while demolition is not expected before Q3 2027, early removal cannot be ruled out.

4. International Political and Economic Risks: Changes in global political and trade environments may negatively impact the semiconductor industry, reduce customer demand, and increase operational costs.

Senior Management Compensation: Performance Boom Drives Executive Pay Surge

In 2025, total compensation for senior executives increased significantly, mainly due to the substantial growth in revenue and net profit, which motivated the leadership team. Chairman Sun Chengsi received a pre-tax remuneration of 9.873 million yuan; General Manager He Han received 9.702 million yuan; Vice Presidents Xu Qian, Wang Can, Liu Yang, and Cai Dong received 9.033 million, 9.452 million, 7.122 million, and 3.775 million yuan respectively; CFO Huang Yanfeng received 6.012 million yuan.

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