A Massive Loss of Over 200 Million Yuan in One Year! Why Did Xinuowei's Performance Plunge?

Ask AI · How does the continued loss of subsidiaries amplify pressure on performance decline?

“Research and development investments are difficult to quickly convert into profits,” “subsidiaries continue to lose money,” “weakening core business advantages”—these factors collectively led Xinuowei to shift from profit to loss in 2025.

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Investment Time Network, Punctuation Finance Researcher Xi Yu

From a profit of 53.73 million yuan in 2024 to a loss of 241 million yuan in 2025, Xinuowei (300765.SZ) experienced a significant decline in profitability within just one year.

On the evening of March 16, Xinuowei disclosed its 2025 annual report. Data shows that during the period, the company’s revenue reached 2.158 billion yuan, an increase of 8.93% year-over-year; net profit attributable to the parent turned into a loss, amounting to 241 million yuan, a sharp decline of 548.80% year-over-year; non-recurring net profit attributable to the parent was a loss of 294 million yuan, down 795.33% year-over-year. Why did this happen?

Main financial indicators of Xinuowei in 2025

Data source: Company announcement

Investment Time Network and Punctuation Finance Researcher note that Xinuowei listed on the A-share market in March 2019. In its early days, relying on core advantages in functional raw materials like caffeine, the company’s performance maintained steady growth.

Among these, 2021 and 2022 were golden years for rapid performance growth, with both revenue and profit achieving high-speed increases. In 2023, growth momentum weakened, with revenue declining by 4.75% year-over-year and net profit growth slowing significantly to 4.03%.

This slowdown further intensified in 2024. During that year, Xinuowei achieved operating income of 1.981 billion yuan, a decrease of 21.98% year-over-year; net profit attributable to the parent was about 53.73 million yuan, down 87.63%, with profits shrinking substantially. Also in 2024, Xinuowei’s operating cash flow turned negative for the first time since listing, further exacerbating future operational and funding challenges.

As a company focused on biopharmaceuticals, functional raw materials, and health food R&D, production, and commercialization, Xinuowei has been accelerating its transformation into an innovative biopharmaceutical enterprise, focusing on frontier technology platforms such as antibody drugs, ADC, and mRNA vaccines. R&D investment has increased year by year, becoming a key driver of the company’s strategic transformation.

The 2025 annual report shows that the company invested 1.036 billion yuan in R&D, an increase of 23.01% year-over-year. Several pipeline products have also made significant progress.

However, drug innovation inherently involves long cycles and slow returns. Large R&D investments in the short term are difficult to quickly translate into actual profits, making it hard to offset their impact on current performance.

Meanwhile, the continuous increase in R&D spending, coupled with ongoing losses from acquisitions, has further burdened Xinuowei’s performance.

In November 2025, Xinuowei completed the acquisition of a 29% minority stake in Jushi Biotech at a transaction price of 1.1 billion yuan, increasing its stake from 51% to 80%. While this move helps strengthen its layout in innovative drugs, it also amplifies the impact of Jushi Biotech’s current losses on the company’s consolidated net profit.

Data shows that Jushi Biotech posted net losses of 727 million yuan in 2024 and 904 million yuan in 2025. Although Xinuowei has stated that Jushi Biotech’s layout in antibody drugs, ADC, and other fields has long-term value, and that it signed a strategic cooperation agreement with AstraZeneca in January 2026, promising phased stable returns, in the short term, Jushi Biotech’s ongoing losses will continue to negatively affect the company’s performance.

In addition, the decline in core business profitability further compresses Xinuowei’s profit margins, becoming another key factor in performance pressure.

Functional raw materials are Xinuowei’s traditional strength, with caffeine products being one of its core offerings. As a leading global producer of synthetic caffeine, Xinuowei is also a global supplier for Coca-Cola, Pepsi, and Red Bull. This business has long been a major pillar of the company’s revenue and profit, providing stable cash flow and profit foundation.

However, in 2025, the caffeine industry faced oversupply, intensified homogenized competition, rising costs, weak downstream demand, and increased global competition, leading to a decline in gross profit margin and profitability compared to the previous year.

Over the past year, Xinuowei has focused on increasing sales to consolidate market share, with functional raw materials and health foods generating 1.857 billion yuan in sales revenue, accounting for 86% of total revenue—still the main source of income. However, the gross profit margin for this business in 2025 decreased by 4.85 percentage points year-over-year to 34.88%.

Main product revenue, cost, and gross profit margin of Xinuowei

Data source: Company annual report

Additionally, declining asset operation efficiency has further increased operational pressure. The annual report shows that as of the end of 2025, accounts receivable reached 441 million yuan, up 40.51%; inventories were 498 million yuan, up 24.87%. The total of these two items is 939 million yuan, accounting for 43.47% of the current operating income, higher than the industry average of 28%–36%, indicating a high level of asset utilization.

For Xinuowei, the losses in 2025 are both a necessary pain during its transformation and an opportunity to push for self-innovation. How the company can achieve a spectacular shift from a traditional functional raw materials enterprise to an innovative biopharmaceutical company is worth watching.

Keywords: Xinuowei (300765.SZ)

Author’s statement: Personal opinions for reference only.