EPS of $0.01 decreased by 32.2% from previous year
Gross margin of 48.0%
Net income of 6.95M
"N/A" - N/A
Diwang Industrial Holdings Limited (1950.HK) QQ1 2025 Results: Revenue Decline with Margin Resilience in a Competitive Coatings Market
Executive Summary
Diwang Industrial reported QQ1 2025 revenue of CNY131.44 million, down 9.92% year-over-year and 4.28% quarter-over-quarter. Despite the revenue decline, the company delivered a robust gross margin of 47.96% and an EBITDA of CNY11.26 million, translating to an EBITDA margin of 8.57% and an operating margin of 4.71%. Net income was CNY6.95 million, equating to a net margin of 5.29% and earnings per share (diluted) of CNY0.0097. The quarter benefitted from a positive mix of operating income and other income, with total other income and expenses contributing to a stronger bottom line relative to the prior quarter. While the top-line contraction reflects ongoing competitive dynamics in the coatings and specialty resins landscape, margin resilience signals a favorable cost structure and potential leverage from efficiencies and pricing actions. Investors should monitor demand recovery in key end-markets (automotive, apparel, home furnishings) and raw material cost movements, which remain the primary drivers of quarterly volatility.
Key Performance Indicators
Revenue
131.44M
QoQ: -4.28% | YoY:-9.92%
Gross Profit
63.04M
47.96% margin
QoQ: 7.17% | YoY:-9.73%
Operating Income
6.19M
QoQ: 122.91% | YoY:-38.46%
Net Income
6.95M
QoQ: 46.51% | YoY:-32.28%
EPS
0.01
QoQ: 46.97% | YoY:-32.17%
Revenue Trend
Margin Analysis
Key Insights
Revenue: 131.44; YoY: -9.92%, QoQ: -4.28%
Gross Profit: 63.04; Gross Margin: 47.96%
EBITDA: 11.26; EBITDA Margin: 8.57%
Operating Income: 6.19; Operating Margin: 4.71%
Income Before Tax: 8.75; Pre-Tax Margin: 6.65%
Financial Highlights
Revenue and profitability overview for QQ1 2025 (CNY millions):
- Revenue: 131.44; YoY: -9.92%, QoQ: -4.28%
- Gross Profit: 63.04; Gross Margin: 47.96%
- EBITDA: 11.26; EBITDA Margin: 8.57%
- Operating Income: 6.19; Operating Margin: 4.71%
- Income Before Tax: 8.75; Pre-Tax Margin: 6.65%
- Net Income: 6.95; Net Margin: 5.29%
- EPS (Diluted): 0.0097; Weighted Avg Shs Out: 720.02m
Key deductions: The mix remains favorable with a mid-high gross margin, but SG&A and R&D spend keep operating leverage modest. The year-on-year revenue decline suggests competitive pressure or demand-seasonality, while the QoQ improvement in net income indicates a positive shift in components like other income and operating profitability. The company’s earnings quality appears solid given the margin profile and modest capex proxy through depreciation and amortization of 3.11m.
Income Statement
Metric
Value
YoY Change
QoQ Change
Revenue
131.44M
-9.92%
-4.28%
Gross Profit
63.04M
-9.73%
7.17%
Operating Income
6.19M
-38.46%
122.91%
Net Income
6.95M
-32.28%
46.51%
EPS
0.01
-32.17%
46.97%
Key Financial Ratios
Net Income vs. Revenue
Expense Breakdown
Management Commentary
Transcript availability: Not provided in the data set. No earnings call transcript was supplied for QQ1 2025. Therefore, there are no management quotes or call-specific themes to extract directly. In lieu of a transcript, the analysis relies on the disclosed P&L items and ratios to infer management emphasis on margin resilience and cost discipline. Investors should supplement this with the official earnings call remarks when available to confirm management guidance on demand trajectory, product mix strategies, and geographic expansion plans.
N/A
— N/A
N/A
— N/A
Forward Guidance
No explicit QQ1 2025 guidance was published in the provided data. Given the observed margin resilience amid a revenue contraction, the forward path will hinge on (1) demand stabilization or recovery in key end-markets (coatings, finishes, additives for apparel and automotive interiors), (2) price pass-through capabilities to offset raw material cost dynamics, and (3) continued control of operating expenses. Management commentary (when available) should be weighed for any targets on revenue growth, gross margin expansion, and capital spending. Until guidance is disclosed, the likely scenario range includes a base case of flat-to-low-single-digit revenue growth with margin maintenance and modest earnings progression, a bull case driven by improved pricing/tassellation and higher volume, and a bear case driven by sustained demand weakness or commodity pressure. Key monitoring items for investors: order momentum in China and overseas markets, raw material cost trends, competition intensity, and any announced customer or geographic expansion initiatives.
Competitive Position
Company
Gross Margin
Operating Margin
Return on Equity
P/E Ratio
1950.HK Focus
47.96%
N/A
N/A
N/A
1912.HK
0.00%
0.00%
0.00%
0.00%
1953.HK
0.00%
0.00%
0.00%
0.00%
1941.HK
0.00%
0.00%
0.00%
0.00%
1936.HK
20.80%
5.64%
1.38%
17.46%
Gross Profit Margin
Operating Profit Margin
Return on Equity
P/E Ratio Comparison
Investment Outlook
Moderate upside potential anchored by a stable margin profile and potential top-line recovery through geographic expansion and product mix optimization. The QQ1 2025 results show a disciplined cost structure that preserves profitability amid revenue declines. The absence of explicit guidance adds uncertainty, so investors should rely on ongoing quarterly cadence to confirm top-line stabilization and margin trajectory. Key catalysts include improved demand in core end-markets, favorable pricing actions to offset input costs, and any announced strategic partnerships or capex that could lift margins over time. Primary risks include sustained revenue weakness, raw material cost volatility, and competitive pricing pressure within a fragmented market.
Key Investment Factors
Growth Potential
Potential margin expansion through product mix optimization (coatings resins, colorants, finishes) and selective geographic expansion in APAC and emerging markets. Opportunities to monetize higher-value specialty resins and additives in apparel, automotive, and home décor segments.
Profitability Risk
Concentration risk in select end-markets; sensitivity to commodity price swings for feedstocks; currency and cross-border pricing pressure; competitive intensity in a fragmented coatings and resins space; limited disclosure of balance sheet to assess liquidity and leverage.
Financial Position
Limited balance sheet details in QQ1 2025 release. No debt levels or cash position disclosed; depreciation is modest (CNY3.11m) suggesting a relatively light asset base. Investors should seek supplemental disclosures (working capital, debt maturity profile, cash flow statements) to gauge liquidity and financial flexibility.
SWOT Analysis
Strengths
Healthy gross margin around 48% provides a cushion against input cost volatility.
Diversified end-market exposure across China, Mexico, Turkey, and Vietnam.
Modest depreciation and amortization suggesting a lean capital base and potential for cash generation.
EBITDA-driven profitability supports resilience even with revenue softness.