Jianfa Hecheng 2025 Annual Report Analysis: Revenue increased by 15.53% to 7.635 billion yuan; R&D expenses decreased by 5.96%

Revenue Scale Steady Growth

In 2025, Jianfa Hecheng achieved an operating income of 763,541.81 million yuan, a year-on-year increase of 15.53%. From the industry structure, the construction industry contributed revenue of 687,868.19 million yuan, accounting for 89.96%, with a year-on-year growth of 16.41%, making it the core driving force for revenue growth; the service industry generated revenue of 71,674.19 million yuan, up 5.57%; the manufacturing industry generated revenue of 3,677.42 million yuan, with a significant year-on-year increase of 112.99%, although it only accounted for 0.48%, the growth rate is impressive.

From the product structure, the construction business generated revenue of 667,480.52 million yuan, accounting for 87.42% of total revenue, with a year-on-year growth of 17.15%, making it the company’s primary source of income; surveying, design, engineering management, and comprehensive maintenance services also maintained a stable trend, while the engineering materials business generated revenue of 3,677.42 million yuan, with a year-on-year growth of 112.99%, showing significant growth.

From the regional structure, revenue in Zhejiang Province was 321,907.55 million yuan, accounting for 42.16%, with a year-on-year growth of 32.49%; revenue in Fujian Province was 285,752.78 million yuan, accounting for 37.43%, with a year-on-year decrease of 19.66%; other provinces generated revenue of 155,559.48 million yuan, accounting for 20.41%, with a significant year-on-year growth of 151.49%, indicating a continuous optimization of regional layout.

Profitability Indicators Gradually Improve

Net Profit and Deducted Non-Net Profit

In 2025, the company achieved a net profit attributable to shareholders of the listed company of 10,919.41 million yuan, a year-on-year increase of 14.21%; the deducted net profit was 10,191.56 million yuan, a year-on-year increase of 13.77%. Non-recurring gains and losses mainly include government subsidies, changes in fair value of financial assets, etc., totaling 727.85 million yuan, having a minor impact on net profit.

Earnings Per Share

Basic earnings per share were 0.4189 yuan/share, a year-on-year increase of 14.20%; diluted earnings per share were 0.3910 yuan/share, a year-on-year increase of 13.76%. The growth in profitability indicators aligns with the trends in revenue and net profit, reflecting stable profit quality.

Expense Structure Analysis

Overall Expense Situation

In 2025, the company’s total period expenses amounted to 197,436.85 million yuan, a year-on-year increase of 3.38%, with the growth rate lower than that of revenue, indicating effective expense control.

Detailed Expense Interpretation

2. Sales Expenses: Increased by 15.65% year-on-year, mainly due to the expansion of new businesses and the promotion of localized development, resulting in increased expenses for new operating personnel. The sales expense ratio is 3.43%, up 0.01 percentage points year-on-year, which is basically in line with the revenue growth rate.
3. Management Expenses: Increased by 3.18% year-on-year, mainly due to the expansion of new businesses and the promotion of localized development, resulting in increased expenses for new management personnel. The management expense ratio is 17.60%, down 1.98 percentage points year-on-year, indicating significant expense control effects.
4. Financial Expenses: The net figure is -148.96 million yuan, a year-on-year decrease of 26.87 million yuan, mainly due to reduced interest expenses on lease liabilities. The company’s financial expenses are negative, mainly due to interest income exceeding interest expenses, indicating high capital utilization efficiency.
5. R&D Expenses: Decreased by 5.96% year-on-year, mainly due to personnel changes and structural adjustments, leading to a reduction in salary expenses. In 2025, R&D investment was 3,828.64 million yuan, accounting for 0.50% of operating income. The company was granted 18 authorized patents throughout the year, participated in compiling 2 provincial local standards, and was approved as the “Fujian Province Postdoctoral Innovation Practice Base,” showing significant R&D achievements.

R&D Personnel Situation

In 2025, the number of R&D personnel in the company was 266, accounting for 9.45% of the total number of employees. In terms of educational structure, there were 2 doctoral researchers, 52 master’s degree holders, 183 bachelor’s degree holders, and 29 associate degree holders, with a high-education R&D personnel proportion of 20.30%; in terms of age structure, there were 134 R&D personnel aged 30-40, accounting for 50.38%, and 74 aged 40-50, accounting for 27.82%. The age structure of the R&D team is reasonable, combining experience and innovation capability.

Cash Flow Analysis

Overall Cash Flow Situation

In 2025, the company’s net increase in cash and cash equivalents was 37,835.23 million yuan, a year-on-year decrease of 10.23%, mainly affected by changes in operating cash flow.

Detailed Cash Flow Interpretation

2. Operating Cash Flow: The net figure is 42,098.31 million yuan, a year-on-year decrease of 10.55%, mainly due to an increase in completed construction projects, where the corresponding settlement cycle differed from the normal progress payments, leading to a slower increase in operating cash inflows compared to outflows.
3. Investing Cash Flow: The net figure is -847.57 million yuan, a year-on-year decrease of 116.30 million yuan, mainly due to the payment of the final installment for the equity transfer of Lijun Design. The company’s investment activities primarily focus on financial product investments, with total cash payments for investments throughout the year amounting to 630,617.63 million yuan, and redemptions of financial products at 630,400.00 million yuan, maintaining a stable investment scale.
4. Financing Cash Flow: The net figure is -3,415.51 million yuan, a year-on-year increase of 772.52 million yuan, mainly due to the previous year’s acquisition of minority shareholder equity in Fujian Yilu, with no such large expenditures this period. This period, the company obtained loans of 408.23 million yuan, primarily to supplement working capital.

Risks Facing the Company

2. Policy Risks: The development of the engineering technology service industry to which the company belongs relies on the national macroeconomic situation, relevant policies, and the scale of fixed asset investment. Future adjustments in national industrial policies may affect the company’s production and operation status.
3. Human Resource Risks: The loss of talent in the civil engineering industry and the oversaturation of graduate employment may lead to a structural imbalance in talent supply in the industry, potentially affecting the company’s human resource reserves; fluctuations in industry and regional salary levels may increase labor costs; the long training cycle for specialized talent poses challenges to the company’s sustainable human resource development.
4. Safety Production Risks: If a major safety accident occurs during the engineering technology service process, the company may have to bear corresponding responsibilities, affecting operations.
5. Accounts Receivable Risks: The company has a high balance of accounts receivable, mainly due to the long service periods of engineering consulting projects, extended settlement and warranty periods, and lengthy owner payment processes. If accounts receivable are not collected in a timely manner, it may affect the company’s cash flow and profitability.

Compensation Situation for Directors, Supervisors, and Senior Management

In 2025, the chairman Wang Xuefei reported a total pre-tax compensation from the company of 0 million yuan, with his compensation derived from related parties; the general manager Kang Mingxu received a pre-tax total compensation of 126.97 million yuan; the deputy general manager Xu Hui received a pre-tax total compensation of 92.49 million yuan; and the financial director Liu Xiaoling received a pre-tax total compensation of 108 million yuan. Among the departing executives, Liu Zhixun and Fang Jianxin also received corresponding compensation. The company’s compensation system is linked to job responsibilities and operational performance, aligning with industry standards.

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Editor: Xiaolang Express