Overseas revenue declined by more than 8%. Wanxiang Qianchao expects a net profit growth of approximately 9% by 2025. The company states that this year they will "focus on breakthroughs in Tesla and Toyota's global systems."

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Wanxiang Qianchao (SZ000559, share price 14.80 yuan, market cap 49.07B yuan) disclosed its 2025 annual report on the evening of April 6. In 2025, the company achieved revenue of approximately 13.39B yuan, up 4.06% year over year; attributable net profit of approximately 1.04B yuan, up 8.89% year over year; and net profit after deducting non-recurring items of approximately 917 million yuan, down 1.72% year over year. Basic earnings per share were 0.31 yuan. The company plans to distribute a cash dividend of 2 yuan for every 10 shares (including tax), with no bonus shares and no capitalization of capital reserves to increase share capital.

Image source: Wanxiang Qianchao annual report

That same evening, Wanxiang Qianchao also announced that it plans to inject additional capital of 120 million yuan from its own funds into its wholly owned subsidiary Wanxiang Qianchao (America) Co., Ltd., which would then have the America company inject capital into its subsidiary Wanxiang Qianchao (Thailand) Co., Ltd. This capital increase will be used for Thailand’s new production lines, supporting engineering, Phase II plant facilities, and the construction of an intelligent warehouse.

In terms of direction, this follows a period of weakness after Wanxiang Qianchao’s revenue declined 7.84% year over year in 2024 (calculated using the adjusted restated basis), after which it has regained momentum. At the same time, although the company’s attributable net profit has grown for the fifth consecutive year in 2025, the 8.89% growth rate is clearly slower than the 15.76% growth rate in 2024.

Image source: Wind

However, during the reporting period, the net cash flow from operating activities of Wanxiang Qianchao increased 21.41% year over year to 1.59B yuan, with the growth rate significantly exceeding the growth rate of attributable net profit.

By quarter, in the fourth quarter of 2025, Wanxiang Qianchao achieved revenue of 2.99B yuan, down 14.31% year over year and down 14.59% quarter over quarter; it achieved attributable net profit of 262 million yuan, up 11.87% year over year and up 9.96% quarter over quarter.

Image source: Wind

During the reporting period, Wanxiang Qianchao’s high-end customer matrix continued to expand: on the basis of consolidating batch supply for existing user supporting projects and market share, the company continued to expand into the high-end market. During the period, it focused on developing hub unit and drive shaft projects such as those for Nissan, Toyota, and Volkswagen; the SAIC caliper project; the BYD bearing and structural components project; and Volvo hub unit projects.

During the period, Wanxiang Qianchao, around its “Move with Intelligence and Control” strategy, focused on its two core businesses—precision bearings and intelligent chassis—and vigorously promoted the implementation of its green and intelligent development strategy. The company obtained 317 authorized patents in China, including 183 invention patents; multiple new products received provincial-level honors, such as the “zero drag” electronic braking angle assembly recognized as the first batch in Zhejiang Province.

The annual report shows that in domestic supporting markets, Wanxiang Qianchao’s core products such as hub units and constant-velocity drive shafts achieved market shares of 26% and 17%, respectively. In addition, Wanxiang’s universal joints lead globally in scale. Furthermore, the company has deeply deployed AI (artificial intelligence) applications, and 19 AI agents have already been implemented. Through digital intelligence engineering, the company realized an annualized benefit breakthrough of more than 119 million yuan. Meanwhile, R&D spending continued to increase, with R&D expenses reaching 559 million yuan in 2025.

While achieving many results, Wanxiang Qianchao’s annual report also exposed certain risk points.

The annual report shows that the inventory of Wanxiang Qianchao’s hub bearing units increased 167.43% year over year. The company stated that “mainly due to the company’s production and stocking in accordance with the order plans of customers such as BYD, Great Wall, and FAW-Volkswagen, and the subsequent issuance/withdrawal by the counterpart has been delayed.” For example, Wanxiang Qianchao’s bearing inventory increased 69.48% year over year during the period. The company said this was mainly due to the relocation of the factory premises, which led to the early stocking of key materials and finished products.

Reporters from the Daily Economic News also noted that, against the backdrop of the overseas expansion of China’s auto industry supply chain, Wanxiang Qianchao’s revenue from overseas during the period fell 8.33% to 1.48B yuan. At the same time, the gross margin of its mechanical manufacturing main business decreased slightly by 0.76 percentage points year over year to 19.75%.

Image source: Wind

In addition, the annual report also disclosed that Wanxiang Qianchao’s transactions involving its subsidiary “supply chain company” in 2022–2023 for some ferrochrome trading business were not involved in the logistics process in a substantial manner, there were corresponding relationships between the main terms of the procurement and sales contracts, and there were related-party relationships between the transaction’s upstream and downstream parties. Based on the principle of prudence, the company recognized revenue for this portion of ferrochrome trading business using the net method. The corresponding important prior error corrections affected consolidated financial statements’ revenue and operating costs for 2022–2023 by reducing them by 759 million yuan and 524 million yuan, respectively.

Looking ahead to 2026, Wanxiang Qianchao has clearly stated in its annual report that: while consolidating the existing “9N” user share, it will “make a key breakthrough in Tesla and Toyota’s global systems,” and will accelerate the development of cutting-edge products such as low-altitude aircraft bearing components and robot precision parts (such as ball screw and joint module components). Meanwhile, the Phase II plant of the company’s Thailand subsidiary is planned to be completed and put into operation in 2026, and a new factory will be established at a selected location.

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