On April 20, Liu Guo Chemical (600470) released its 2025 annual performance report. The company presented a stark contrast of "slight revenue increase and huge losses," with core operating indicators under comprehensive pressure, reflecting the industry dilemma of the fertilizer sector where costs and prices are squeezing from both sides.

Performance data shows that the company achieved operating revenue of 6.442 billion yuan in 2025, a slight year-on-year increase of 3.06%; however, the profit end saw a cliff-like decline, swinging from profit to loss. Net profit attributable to shareholders was a loss of 456 million yuan, a massive year-on-year decrease of 1910.65%; net profit after deducting non-recurring gains and losses was a loss of 462 million yuan, a year-on-year drop of 3885.90%, with the scale of loss expanding significantly.

Behind the slight revenue increase was mainly a small boost in the sales scale of fertilizer products, but the profit space was completely eroded. During the reporting period, the company's total profit fell by 757.76% year-on-year, and the gross profit margin dropped sharply to 4.68%, a decrease of 4.73 percentage points from the previous year; the net profit margin was -7.08%, highlighting that under the dual pressure of high raw material costs and product price controls, the company's profitability is on the verge of collapse.

The structure of the main business showed a trend of continuous convergence. Among them, fertilizer products achieved revenue of 5.841 billion yuan, accounting for as much as 90.66% of total revenue, further increasing from the previous year and becoming the absolute pillar of the company's revenue; compound fertilizer, phosphate fertilizer, and urea constitute the core categories of the fertilizer business, supporting the company's basic revenue base. In contrast, chemical product revenue was only 355 million yuan, accounting for only 5.52% of total revenue. The business position continues to weaken, failing to form an effective profit supplement.

In terms of market layout, the company's focus is accelerating its tilt towards domestic demand. The domestic market achieved sales revenue of 5.365 billion yuan, accounting for 83.29% of total revenue, an improvement from the previous year; foreign market sales revenue was 831 million yuan, accounting for 12.89%. Affected by the sharp decline in export volume, the regional layout presents a clear trend of inward contraction, and reliance on external markets has further decreased.

At the same time, the company's cash flow and financial pressures became prominent simultaneously. In 2025, the net cash flow from operating activities was 43.3567 million yuan, a sharp year-on-year decrease of 88.84%, mainly because cash received from sales of goods and cash paid for purchases of goods increased simultaneously during the reporting period. This led to a significant rise in the occupation of working capital against the background of slight revenue growth, putting pressure on fund turnover efficiency. As of the end of the reporting period, the company's short-term debt was 1.533 billion yuan and long-term debt was 1.11 billion yuan. The asset-liability ratio climbed to 73.08%, a year-on-year increase of 3.75 percentage points. The financial leverage is at a high level, and debt repayment pressure has further increased.

It is worth noting that the company continued to increase R&D investment despite the performance losses. The total R&D expense for 2025 reached 230 million yuan, a year-on-year increase of 11.01%, and the proportion of operating revenue rose to 3.56%; the number of R&D personnel was 367. Although the year-on-year change was not disclosed, the increase in R&D investment intensity echoes the accelerated implementation of the company's new energy and new material projects. R&D resources are gradually shifting from traditional process optimization to the construction of green and low-carbon new production capacity, demonstrating the adjustment of the company's strategic focus.

Input on the sales side failed to form an effective hedge, but instead negatively superimposed with the performance losses. During the reporting period, sales expenses were 123 million yuan, a year-on-year increase of 7.44%, with the growth rate 4.38 percentage points higher than the revenue growth rate. Against the backdrop of a sharp decline in gross profit margin and rigid constraints on product prices, the additional investment on the sales side failed to effectively alleviate the profit pressure caused by the failure of cost transmission, instead further dragging down the company's overall profitability.