Hengxin Technology reported QQ1 2025 revenue of 511.1 million CNY, with a gross margin of 18.3% and an EBITDA of 30.1 million. Operating income stood at 15.6 million, but the quarter ended with a net loss of 35.21 million due to an outsized income tax expense of 35.55 million and a negative contribution from other income/expenses of 15.58 million. The result is characterized by a modest operating profitability backdrop marred by non-operating charges, leaving earnings per share at -0.076. YoY revenue and gross profit declined roughly 8–9%, while operating and net margins deteriorated meaningfully, reflecting telecom capex cycle sensitivity and ongoing cost/income mix challenges.
The balance sheet remains robust with a substantial cash position (cash and cash equivalents of 1.314 billion CNY) and a solid asset base. However, leverage is a clear overhang: total debt at 1.774 billion CNY and net debt of 459.5 million CNY, against equity of about 1.493 billion CNY. Liquidity remains comfortable on a current basis (current assets about 3.681 billion vs current liabilities 1.889 billion, ~1.95x current ratio), but the company faces a meaningful tax burden and net income headwinds in the near term. The market environment for RF coaxial cables and related telecom equipment remains cyclical, with upside tied to 5G/6G deployments, capacity expansions by carriers, and potential improvement in cost structure.
Looking ahead, management guidance is not provided in the available data. The near-term trajectory will likely hinge on the pace of telecom capex recovery, product mix optimization, and the ability to translate EBITDA into sustained net income through tax efficiency and working capital discipline. In this context, Hengxin exhibits operational resilience in EBITDA terms but faces profitability and leverage headwinds that require careful monitoring.