Prince New Materials (002735) reported a significant decline in performance in 2024, with concerns over cash flow and accounts receivable risks.

Recently, Prince New Materials (002735) released its 2024 annual report. The Securities Star financial statement model analysis is as follows:

Financial Overview

Prince New Materials (002735) disclosed its financial status in the 2024 annual report. By the end of the reporting period, the company's total operating revenue reached 1.989 billion yuan, an increase of 12.15% year-on-year. However, the net profit attributable to shareholders was -68.5025 million yuan, a decrease of 213.51% year-on-year, and the non-recurring net profit was -64.2417 million yuan, a decrease of 236.59% year-on-year. The performance in the fourth quarter was particularly poor, with a net profit attributable to shareholders of -81.3855 million yuan, a decrease of 289.36% year-on-year, and a non-recurring net profit of -79.29 million yuan, a decrease of 327.91% year-on-year.

Key Financial Indicators

Gross margin: 16.81%, a year-on-year decrease of 16.25%.

Net profit margin: -3.84%, a year-on-year decrease of 196.19%.

Three expenses占 revenue ratio: 11.54%, a year-on-year decrease of 8.23%. (Note: "Three expenses" typically refers to selling expenses, administrative expenses, and financial expenses in Chinese financial contexts. For precise translation in a specific context, it might be better to clarify what specific three expenses are being referred to.)

Net assets per share: 4.51 yuan, a year-on-year decrease of 2.53%.

Operating cash flow per share: -0.01 yuan, a year-on-year decrease of 104.88%.

Earnings per share: -0.18 yuan, a decrease of 185.71% year-on-year.

Accounts Receivable and Cash Flow

The company's accounts receivable volume is substantial, accounting for 49.74% of the total operating revenue, reaching 989 million yuan, a year-on-year increase of 30.35%. The net cash flow from operating activities is negative, decreasing by 104.77% year-on-year, and the operating cash flow per share is -0.01 yuan, a year-on-year decrease of 104.88%. This indicates that the company is under significant pressure in accounts receivable management and cash flow.

Main business composition

Plastic packaging products: revenue of 1.164 billion yuan, accounting for 58.49% of total revenue, with a gross margin of 16.64%.

Film capacitor products: revenue of 454 million yuan, accounting for 22.84% of total revenue, with a gross margin of 13.13%.

Military Electronics Products: Revenue of 223 million yuan, accounting for 11.23% of total revenue, with a gross margin of 30.43%.

Other businesses: revenue of 148 million yuan, accounting for 7.44% of total revenue, with a gross margin of 8.86%.

Industry Background and Development Review

Plastic packaging industry

Under the drive of demand structure adjustment and industrial upgrading, the market size of the plastic packaging industry in China will reach 1.35 trillion yuan in 2024, a year-on-year increase of 5.0%, demonstrating a steady development trend. The company's packaging business mainly focuses on plastic packaging for smart electronic products, home appliances, and cushioning products.

Military Electronics Industry

The military electronics industry plays a crucial role in national security and self-reliance. In 2025, China's national fiscal budget for defense expenditure is approximately 1.78 trillion yuan, a year-on-year increase of 7.2%, marking the third consecutive year with the same growth rate.

Film Capacitor Industry

The market size of film capacitors in China increased from 4.3 billion yuan in 2018 to 10.8 billion yuan in 2023, with a compound annual growth rate of 20.1%. It is projected to reach 28.7 billion yuan by 2029, with a compound annual growth rate of 17.8%.

Future Outlook

The company plans to transition from a single plastic packaging business to a diversified enterprise encompassing military electronics, film capacitor components, and other fields. In the future, the company will adhere to the strategy of "focusing on high-quality businesses and promoting diversified development," continuing to solidify its leading position in the plastic packaging sector while accelerating the cultivation and development of new productive forces, particularly in areas such as military electronics and film capacitors, driving technological and intelligent transformation.

Financial Analysis Summary

Despite achieving growth in total operating revenue, the significant decline in net profit attributable to shareholders and non-recurring net profit, along with pressures from accounts receivable and cash flow, indicate challenges in the company's operational management and financial health. Moving forward, the company needs to further optimize its accounts receivable management and improve its cash flow situation to ensure sustainable development.