Analysis of Revenue Decline of Husong Technology in H1 2025

According to public information, Husong Technology Group Co., Ltd. recently submitted a listing application to the Hong Kong Exchanges and Clearing Limited (HKEX). Financial data disclosed in its prospectus shows that the company faced severe performance pressure in H1 2025 [1][2].

Indicator	H1 2024	H1 2025	Change Rate
Operating Revenue	RMB309 million	RMB82.461 million	-73.4%
Revenue from Intelligent Production Line Solutions for Micro-Nano Materials	RMB309 million	RMB80.576 million	-73.9%
Net Profit	RMB15.298 million	-RMB59.715 million	Swung from Profit to Loss

From a historical trend perspective, the company’s revenue grew steadily from RMB409 million in 2022 to RMB710 million in 2024, with a compound annual growth rate of approximately 31.8%. However, the sudden decline in H1 2025 broke this growth momentum [1][2].

The final acceptance of two large-scale projects each with a contract value exceeding RMB150 million (including VAT) was delayed from H1 2025 to H2 2025, which is the direct reason for the sharp revenue decline [1][2]. These two projects belong to the intelligent production line solutions for micro-nano materials segment, whose revenue plummeted by 73.9% from RMB309 million to RMB80.576 million, accounting for almost the entire decline in overall revenue [2].

1. Sharp Drop in Gross Profit Margin
   : The overall gross profit margin in H1 2025 was only 8.0%, a significant decrease from 24.6% in 2024. Among them, the gross profit margin of the standalone equipment segment turned from positive to negative at -27.9%, and that of the biomanufacturing process solutions segment was -16.3% [2]. The company explained that the decline in gross profit margin of standalone equipment was mainly due to reduced production volume caused by factory relocation, coupled with a substantial increase in fixed costs allocated to products produced in H2 2024 [2].

2. Strained Cash Flow
   : Cash flow from operating activities remained negative, with a net outflow of RMB66.787 million in H1 2025. As of the end of June 2025, the company’s cash and cash equivalents stood at RMB170 million, a significant decrease from RMB432 million at the end of 2024. If the outflow trend continues, the company will face short-term debt repayment pressure [2].

3. Deteriorated Accounts Receivable Turnover
   : The average turnover days of trade receivables and notes receivables surged from 88 days in 2024 to 511 days in H1 2025, reflecting a significant lengthening of the collection cycle and testing the efficiency of operation and management [2].

• Net losses of RMB26.126 million and RMB68.477 million in 2022 and 2023, respectively
• Turned profitable with a net profit of RMB15.298 million in 2024
• Returned to a loss of RMB59.715 million in H1 2025 [1][2]

Revenue from intelligent production line solutions for micro-nano materials accounted for 97.7% of total revenue, indicating the company’s extremely high reliance on this segment. Meanwhile, the company has a high customer concentration, with revenue from the top five customers accounting for 97.0% of total revenue, and the largest single customer accounting for 47.4% [2]. This means that once the core business’s revenue generation is hindered or the cooperation scale with major customers shrinks, the company’s operating performance will face severe challenges.

According to data from CIC Consulting, based on FY2024 revenue, Husong Technology ranks first in China’s lithium battery anode material intelligent production line market with a 6.6% market share; it ranks second in China’s lithium battery material intelligent production line market with a 4.9% market share [1][2]. Despite its leading industry position, the company has still been affected by unfavorable industry conditions, leading to delayed project acceptance.

The impact of delayed contract acceptance on Husong Technology is multi-dimensional:

• Direct and significant short-term revenue impact
  : The delay of two large-scale projects directly led to a revenue decline of over 73%
• Pressured profit quality
  : Issues such as a sharp drop in gross profit margin, sustained losses, and net cash outflow have become prominent
• Declining financial health
  : Accelerated cash consumption and deteriorated accounts receivable turnover
• Exposed vulnerability of business structure
  : The risk of over-reliance on a single segment and a small number of customers has been amplified amid the industry downturn

If the two delayed projects can be successfully accepted in H2 2025, the company’s revenue is expected to recover to a certain extent. However, uncertainties in the industry environment, customer concentration risks, and cash flow pressure remain core issues that require continuous attention.

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[1] RCCaijing - “Husong Technology’s Hong Kong IPO: 73% Revenue Drop in H1, Two Contract Acceptances Delayed” (https://m.rccaijing.com/news-7413499693001012658.html)

[2] OFweek - “Husong Technology Races for Hong Kong IPO: Volatile Performance, Extreme Reliance on a Few Customers” (https://m.ofweek.com/im/2026-01/ART-201900-12003-30678656.html)