Executive Summary
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.
Key Performance Indicators
QoQ: -27.23% | YoY:-8.35%
QoQ: -27.13% | YoY:-10.89%
QoQ: -57.12% | YoY:-53.83%
QoQ: -551.41% | YoY:-364.85%
QoQ: -552.38% | YoY:-333.85%
Key Insights
Revenue: 511,104,500 CNY (Q1 2025) | YoY change: -8.35% | QoQ change: -27.23%
Gross Profit: 93,665,500 CNY | Gross Margin: 18.33%
YoY Gross Profit change: -10.89% | QoQ: -27.13%
EBITDA: 30,125,000 CNY | EBITDA Margin: 5.89%
Operating Income: 15,580,500 CNY | Operating Margin: 3.05%
YoY Operating Income change: -53.83% | QoQ: -57.12%
Net Income: -35,210,000 CNY | Net Margin: -6.89%
YoY Net Income change: -364.85% | QoQ: -551.41%
EPS (Diluted): -0.076 CNY | YoY EPS change: -333.85% | QoQ: -55...
Financial Highlights
Revenue: 511,104,500 CNY (Q1 2025) | YoY change: -8.35% | QoQ change: -27.23%
Gross Profit: 93,665,500 CNY | Gross Margin: 18.33%
YoY Gross Profit change: -10.89% | QoQ: -27.13%
EBITDA: 30,125,000 CNY | EBITDA Margin: 5.89%
Operating Income: 15,580,500 CNY | Operating Margin: 3.05%
YoY Operating Income change: -53.83% | QoQ: -57.12%
Net Income: -35,210,000 CNY | Net Margin: -6.89%
YoY Net Income change: -364.85% | QoQ: -551.41%
EPS (Diluted): -0.076 CNY | YoY EPS change: -333.85% | QoQ: -552.38%
Balance sheet highlights: Total assets 5.236b CNY; Total liabilities 2.959b CNY; Total equity 1.493b CNY
Cash position: Cash and cash equivalents 1.315b CNY; Net debt: 459.5m CNY; Total debt: 1.774b CNY
Liquidity: Current ratio approx. 1.95x; Quick ratio approx. 1.36x
Leverage: Debt/Equity ~1.19x; Net debt/EBITDA ≈ 15.3x
Income Statement
| Metric |
Value |
YoY Change |
QoQ Change |
| Revenue |
511.10M |
-8.35% |
-27.23% |
| Gross Profit |
93.67M |
-10.89% |
-27.13% |
| Operating Income |
15.58M |
-53.83% |
-57.12% |
| Net Income |
-35.21M |
-364.85% |
-551.41% |
| EPS |
-0.08 |
-333.85% |
-552.38% |
Management Commentary
No earnings call transcript data were provided in the dataset. As a result, key management themes, forward-looking commentary, and quotes could not be incorporated into this section. The analysis therefore relies on the disclosed quarterly results and the four-quarter trend data.
Forward Guidance
No formal forward guidance was disclosed in the provided materials. Given the observed quarterly volatility and the notable tax-related headwind, the near-term trajectory will likely hinge on: (1) the pace of telecom capex recovery and demand for RF coaxial cables and related equipment, (2) ongoing cost discipline and product-mix optimization to improve operating leverage, and (3) management’s ability to manage tax exposure and working capital. Investors should monitor potential catalysts such as an improved order intake trajectory, stabilization or recovery of gross margins, and any restructuring or amortization benefits that could translate EBITDA gains into net income.