1. Record Revenue Growth and First Annual Profit

• Revenue soared to RMB 64.73 billion in 2025, doubling from RMB 32.16 billion in 2024 and showing remarkable expansion from RMB 3.13 billion in 2021.
• First-ever annual profit: Leapmotor achieved a net profit attributable to equity holders of RMB 538 million in 2025, reversing a net loss of RMB 2.82 billion in 2024. Adjusted net profit (excluding share-based payments) reached RMB 1.08 billion, a dramatic turnaround from the previous year’s adjusted net loss of RMB 2.35 billion.
• Gross profit improved significantly to RMB 9.41 billion in 2025, up from RMB 2.69 billion in 2024 and a mere RMB 80 million in 2023, reflecting better cost control and sales mix.

2. Strategic Capital Raises and Use of Proceeds

• Major new share subscriptions: In late 2025, Leapmotor entered into agreements to issue 134.8 million Domestic Shares to FAW Equity and Jinyi High-tech, raising approximately RMB 6.74 billion. The funds will be deployed as follows:
  • 70% (RMB 4.72 billion) for research and development investment, supporting new models and technology innovation.
  • 30% (RMB 2.02 billion) for working capital and general corporate purposes.
• Stellantis Subscription: Stellantis’ strategic investment earlier in the year raised approximately HK\$8.51 billion, with 40% for smart EV development, 25% for marketing and overseas expansion, 15% for production capacity, and 20% for working capital.
• 2024 Domestic Share Subscription: Raised RMB 2.6 billion, with 75% for new EV model R&D and 25% for working capital. As of the report date, RMB 1.68 billion remains unutilized, earmarked for R&D over the next three years.

3. Strong Financial Position

• Total assets surged to RMB 62.8 billion by end-2025, supported by increases in both current (RMB 39.7 billion) and non-current assets (RMB 23.2 billion).
• Total equity increased to RMB 14.12 billion, up from RMB 10.07 billion in 2024, reflecting profitability and successful equity financings.
• Net cash to equity ratio stands at 118%, indicating a robust liquidity position to support growth and R&D initiatives.

4. No Dividend Declared for 2025

• The board resolved not to recommend a final dividend for 2025, in line with the company’s policy to prioritize reinvestment for growth and long-term shareholder value creation. As of year-end, there were no distributable reserves.

5. Share Capital and Dilution

• Share capital rose to 1,421,812,652 shares after the issuance of new shares and share options exercise during 2025.
• 14.63 million shares were issued under the Employee Incentive Schemes, accounting for 1.3% of the weighted average H Shares for the period—further aligning staff interests with shareholders.
• After the completion of new share subscriptions, FAW Equity and Jinyi High-tech will hold a combined 8.66% of total enlarged issued shares, further strengthening strategic partnerships.

6. Related Party & Connected Transactions

• Stellantis, a substantial shareholder, was among the top five customers during the reporting period, accounting for a significant portion of sales and strategic cooperation.
• All connected transactions, such as the 2025 Property Lease Agreement and the Carbon Dioxide Credits Transfer Agreement, were conducted on fair terms, with no breaches of Listing Rules and no need for independent shareholders’ approval.
• The Auditor issued an unqualified opinion on the group’s connected transactions, confirming compliance and proper disclosure.

7. Risk Management and Financial Controls

• Foreign Exchange Risk: The company primarily operates in RMB, with some USD/HKD exposure. A 10% change in exchange rates would impact pre-tax profits by RMB 212 million and RMB 11 million, respectively, but the company does not currently use hedging instruments.
• Interest Rate and Credit Risk: Group borrowings include both fixed and variable rates; no interest rate swaps are used. Credit risk is well managed with deposits in reputable financial institutions and ongoing counterparty evaluation.
• Liquidity: The group maintains ample cash, and all time deposits can be withdrawn without significant penalties.

8. Corporate Governance and Management

• Sound governance: The company is fully compliant with Hong Kong Listing Rules, with three independent non-executive directors, regular board and committee meetings, and robust internal controls.
• Remuneration: Senior management (excluding share-based compensation) received up to RMB 5 million per individual, with further details disclosed in the annual report.
• Supervisory Committee: No incidents of non-compliance or material legal proceedings during 2025.

9. Shareholder Matters and Rights

• No arrangements for waived dividends or pre-emptive rights during the reporting period.
• Company maintains a robust communication policy and encourages shareholder participation at meetings, with mechanisms allowing significant shareholders to propose meetings and resolutions.

10. Outlook and Strategic Positioning

• Leapmotor has entered a new growth phase with its first profitable year, strong capital backing, and strategic alliances (notably with Stellantis and FAW Equity).
• Significant unutilized capital will fund R&D, global expansion, and capacity upgrades, potentially supporting further growth in revenue and earnings.
• Several new IFRS standards (notably IFRS 18) will affect presentation but not the substance of financial performance starting from 2027.

Potential Price-Moving Factors

• First annual net profit: Marking a major turnaround for the company, which may drive positive re-rating by investors.
• Large-scale capital injections from major strategic partners (Stellantis, FAW, Jinyi High-tech) signal confidence in Leapmotor’s future and provide ample resources for expansion.
• No dividend payout: While some investors may view this as a negative, the reinvestment of profits and new funds into R&D and growth initiatives is likely to be seen positively in the context of rapid expansion and market share capture.
• Expanding strategic cooperation and internationalization: Particularly the Stellantis partnership, which is expected to drive overseas sales and brand recognition.

Disclaimer

This article is for informational purposes only and does not constitute investment advice. Investors should conduct their own due diligence and consult professional advisors before making any investment decisions. The information is based on the company’s published 2025 annual report and is believed to be accurate as of the date of the report. Actual outcomes may differ due to market conditions and other factors.

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