Zhejiang Chang’an Renheng Technology Co., Ltd. (abbreviated as CHANGAN RH) released its 2025 audited results, reporting steady top-line growth but a slide in profitability amid higher costs and financing expenses.

Revenue and Segment Mix • Annual revenue increased 6.5% year on year to RMB 207.44 million, driven chiefly by stronger sales of organic bentonite (+5.8% to RMB 117.21 million, 56.5% of total) and putty powder (+163.7% to RMB 6.85 million). • Paper-making chemicals contributed 17.3% of sales, inorganic gel 13.9%, dry strength agent 6.0%, quality calcium-bentonite 1.5%, and other chemicals 1.5%.

Profitability • Gross profit slipped 1.7% to RMB 78.74 million as cost of sales rose 12.1%, outpacing revenue growth. Gross margin declined to 38.0% from 41.1%, reflecting higher raw-material costs—particularly CPAM—and an unfavourable product mix. • Operating profit was broadly stable at RMB 7.96 million (+0.3%). • Finance costs climbed 13.7% to RMB 7.52 million, eroding earnings; profit before tax fell 67.0% to RMB 0.47 million. • A net loss of RMB 0.08 million was recorded, compared with a RMB 1.27 million profit a year earlier; basic loss per share stood at RMB 0.00. • The board proposed no final dividend, unchanged from 2024.

Cost Structure and Expenses • Raw materials and consumables accounted for 79.1% of cost of sales; their outlay increased 13.0% to RMB 101.80 million, reflecting higher input prices. • Selling and administrative expenses rose 11.2% and 18.0% respectively, while R&D spending eased 11.6% to RMB 13.74 million. • Other gains swung to a RMB 5.64 million profit (2024: RMB 1.26 million loss) after the disposal of listed equity investments.

Balance Sheet and Liquidity • Total assets reached RMB 360.25 million (+6.6%); equity remained broadly flat at RMB 118.63 million. • Net debt expanded to RMB 158.82 million, lifting the gearing ratio slightly to 133.9% (2024: 132.0%). • Short-term borrowings totalled RMB 188.41 million against cash and cash equivalents of RMB 38.06 million, resulting in a current-liability overhang of RMB 17.57 million. • Management highlighted reliance on operating cash flow, loan renewals, and financial support from the controlling shareholder to address going-concern uncertainties.

Working Capital • Inventories were stable at RMB 71.88 million, with turnover improving to 205 days (2024: 221 days). • Trade receivables increased 10.1% to RMB 85.77 million; turnover lengthened slightly to 144 days (2024: 140 days). • Trade payables fell 10.7% to RMB 16.96 million; turnover shortened to 51 days (2024: 93 days).

Capital Expenditure and Commitments • Capex dropped to RMB 10.70 million (2024: RMB 30.08 million). • Outstanding capital commitments totalled RMB 0.46 million at year-end.

Operational Highlights • A U.S. subsidiary was established to promote bentonite products for oilfield and coatings markets. • Subsidiary Yangyuan Renheng Fine Clay renewed its five-year mining licence. • Two new provincial-level products were accredited: additives for waste paint treatment and an environmentally friendly high-solid pesticide dispersant.

Strategic Focus CHANGAN RH plans to intensify development of high-value functional mineral materials, advance automation, and pursue overseas market expansion in North America, Europe, and Southeast Asia during 2026.

Auditor & Governance The audit committee, comprising three independent non-executive directors, reviewed the 2025 results with the external auditor and confirmed compliance with IFRS and GEM Listing Rules. The company maintained public float requirements; no share repurchases or major acquisitions were reported during the year.