Shengxing Co.'s net profit plummeted 37% in the first three quarters
Shengxing Co., Ltd. (002752) released its financial report for the third quarter of 2025, showing that the company's operating growth is weak and profitability is under significant pressure. In the first three quarters, the company achieved operating income of 5.07 billion yuan, a year-on-year increase of 1.51%; However, the net profit attributable to the parent company was 217 million yuan, down 36.99% year-on-year; deducted non-net profit of 196 million yuan, down 39.98% year-on-year.
Against the backdrop of a slight increase in revenue, profit margins continued to decline, showing multiple pressures from fierce competition in the industry, high raw material costs and slowing downstream demand. net cash flow from operating activities was 546 million yuan, down 2.99% year-on-year, and cash flow was stable but slightly tight.
Stable revenue but significant decline in earnings: gross margin falls below 10%
From the perspective of overall performance, Shengxing maintained its basic revenue scale in the first three quarters of 2025, but the profit side performance was weak. The company's gross profit margin was only 10.03%, down 4.32 percentage points year-on-year, and the net profit margin was 4.29%, down 2.72 percentage points year-on-year. Among them, the operating income in the third quarter was 1.845 billion yuan, a year-on-year increase of 4.03%, but the net profit attributable to the parent company was only 69.21 million yuan, a year-on-year decrease of 37.13%, showing a typical situation of "increasing revenue but not increasing profits".
The industry comparison is even more pressured: Shengxing ranked third in the industry with a revenue of 5.07 billion yuan, second only to Orijin (18.346 billion yuan) and Baosteel Packaging (6.581 billion yuan), but its gross profit margin and net profit margin are lower than the industry average. According to Shenwan industry data, the average gross profit margin of the industry in 2025 will be 11.84%, and the average net profit margin will be about 5.5%. The profitability of Shengxing shares has lagged significantly behind that of leading companies. The company's weighted average return on net assets (ROE) was 6.25%, down 4.46 percentage points year-on-year, and the return on invested capital (ROIC) was 4.51%, down 2.15 percentage points from the same period last year, and the efficiency of return on investment was further weakened.
Asset structure and cash flow fluctuations: inventory backlog, liabilities rise
As of the end of the third quarter, the company's total assets were 8.264 billion yuan, an increase of 4.1% over the end of the previous year; net assets attributable to the parent company were 3.457 billion yuan, a slight increase of 1.2% year-on-year. However, the asset structure has changed significantly: accounts receivable decreased by 11.77%, indicating a certain improvement in collection, but inventory increased by 31.77%, accounting for 2.82 percentage points of total assets, and inventory backlog concerns appeared. Monetary funds rose by 21.18% in the same period, reflecting the company's increase in capital reserves to cope with fluctuations.
On the liability side, long-term borrowings increased by 50.14% year-on-year, and short-term borrowings decreased by 6.32%, indicating that the company is extending its debt maturity to alleviate financial pressure. The asset-liability ratio was 57.93%, higher than the industry average of 55.1%, and the leverage level was still high.
net cash flow from operating activities was 546 million yuan, down 2.99% year-on-year; net cash flow from investment activities was -268 million yuan, indicating that expansion expenses are still increasing. On the whole, the company's cash flow remains positive, but the structure is tight, and the robustness of the capital chain needs to continue to be paid attention to.
Cost control is tightening, but profit elasticity is insufficient
Shengxing shares have shown some improvement in cost control. During the first three quarters, the expense ratio was 5.3%, down 0.5 percentage points year-on-year, of which sales expenses decreased by 27.46% and financial expenses decreased by 33.5%, but management expenses increased by 5.08% and R&D expenses decreased by 27.19%.
The decline in expenses will help alleviate short-term pressures, but with the rise in raw material prices (especially the price of tinplate and aluminum rising by 5%-10% year-on-year) and the rise in energy and labor costs, the company's unit cost remains high. The main reason for the decline in gross profit margin is not high sales expenses, but price concessions caused by industry competition and limited cost transmission.
Analysts generally believe that the main reason for the decline in the company's profits is the weak demand for downstream beverages and beer, and the intensification of price competition for packaging cans. The Metal Container and Steel Barrel Professional Committee of the China Packaging Federation issued the "Anti-Involution Proposal" in 2025, calling for rational competition in the industry, showing that the erosion of corporate profits by price wars has become a consensus.
Industrial chain and customer system: stable but limited growth
Shengxing has long focused on the metal packaging business of food and beverage, and its main products include three-piece cans, two-piece cans and high-end aluminum bottles, and provides beverage filling services. The customer group is highly concentrated, covering leading beverage brands such as Red Bull, Wang Laoji, Tsingtao Beer, Budweiser, Coca-Cola, Master Kong, Starbucks, Carlsberg, and Dali Group. The company adopts the "past-in production" model, and lays out production bases in Fujian, Guangdong, Shandong, Anhui, Yunnan, Zhejiang, Sichuan, Henan and other places to reduce transportation costs and form an interdependent supply chain relationship with customers.
On the raw material side, the company signed long-term strategic agreements with major tinplate and aluminum suppliers, and the group unified procurement to stabilize supply and cost. However, the industry as a whole is subject to fluctuations in the price of steel and aluminum raw materials, and the cost transfer ability is limited. In addition, the increase in the company's inventory also reflects the slowdown in the pace of order adjustment for some customers.
Overseas expansion and new business layout: opportunities and risks coexist
Shengxing continues to promote the production capacity layout of the "Belt and Road" market, and has established manufacturing bases in Cambodia, Indonesia, Vietnam and other places. The Indonesian factory has entered the trial production stage, the construction of the two-piece tank production line in Xing'an, Vietnam, and the fifth phase of the production line in Phnom Penh, Cambodia have achieved full production, contributing new growth points to the company's overseas business.
But at the same time, overseas investment still faces exchange rate fluctuations, operational management and geopolitical risks. Although the Indonesian and Vietnamese markets have growth potential, the industry is becoming increasingly competitive and the project return on investment cycle is long.
Beyond its core business, the company established Quanzhou New Energy Technology Co., Ltd., entering the new energy battery precision components sector, attempting to leverage its metal processing advantages to enter a new market. However, this field has high technological barriers and long customer certification cycles. The company is still in its early stages, so short-term contributions are limited.Overall, the company's strategy of "maintaining the core business while exploring expansions" is forward-looking but its diversified layout also increases management and financial risks.Corporate Governance and Shareholding Concentration: Stable internally but growth is weakThe controlling shareholder of Shengxing Co., Ltd. is Shengxing Holdings Co., Ltd., holding 55.63% of shares, with actual controllers being Lin Yongbao, Lin Yongxian, and Lin Yonglong. Chairman and CEO Lin Yongbao's salary in 2024 was 916,500 yuan, up 39,700 yuan year-on-year.As of the end of September, the number of shareholders was 27,900, down 7.14% from the previous period, while the average shares per account increased, indicating higher stock concentration. Institutional investors' holdings rose, with Hong Kong Securities Clearing Company Ltd. holding 4.7996 million shares, making it the fourth largest circulating shareholder. Overall, the shareholding structure is stable, but market confidence still needs to be restored.Industry Background and Practical Constraints: Downward Cycles and Cost PressuresSince 2025, China's metal packaging industry has been affected by weak macro consumption, fluctuations in beverage shipments, and rising raw material costs, leading to a decline in overall profitability. Steel and aluminum prices rose 5%-8% year-on-year, while transportation and energy costs increased, further compressing the profit margins of packaging manufacturers.In this context, Shengxing Co., Ltd.'s gross margin fell from 14.34% to 10.03%, reflecting the industry's typical situation of "intensified price competition and blocked cost pass-through." Industry leader Origen still maintains profit growth through high-end clients and scale effects, whereas medium-sized companies like Shengxing and Baosteel Packaging face squeezed profits.Summary: Stable Yet Pressured, Structural Optimization Still Needs TimeOverall, Shengxing Co., Ltd.'s performance in the first three quarters reflects characteristics of "stable revenue, declining profit, tight cash flow, and slow expansion." The company has achieved some results in cost control and capacity layout, but weak downstream demand, rising costs, and fierce competition have lowered its profit baseline.Overseas capacity expansion and the new energy component layout provide potential growth, but in the short term, they are unlikely to offset the pressure of declining core business profits. As one of the key firms in China's food and beverage metal packaging industry, Shengxing Co., Ltd. is experiencing the growing pains of transitioning from scale expansion to structural optimization. Future execution in cost management, overseas operations, and technological innovation will determine its stability and competitiveness amid industry reshuffling.