Chery Automobile Co., Ltd. Announces Robust 2025 Annual Results: Detailed Investor Briefing

Key Financial Highlights

• Revenue Growth: Chery Automobile posted a record revenue of RMB 300.3 billion for the year ended 31 December 2025, representing an 11.3% increase from RMB 269.9 billion in 2024.
• Profit Surge: Profit for the year reached RMB 19.5 billion, up 36.1% year-on-year, with net profit margin improving from 5.3% to 6.5%.
• Dividend Announcement: The Board recommended a final cash dividend of RMB 0.86 per share, subject to shareholder approval, totaling RMB 5.0 billion. An interim dividend of RMB 3.99 billion was also paid during the year.
• Basic Earnings Per Share: Increased by 32.9% to RMB 3.43 per share.

Operational and Strategic Developments

• Product Portfolio Expansion: Chery maintained its multi-brand strategy with five distinct brands (CHERY, JETOUR, EXEED, iCAR, LUXEED), targeting diverse market segments, including ICE and NEV vehicles.
• Global Expansion: The Group further entrenched its position as a leading Chinese vehicle exporter, expanding sales/service networks across Europe, South America, Africa, and the Middle East. Chery now operates 12 major production bases worldwide, including 2 overseas, supporting regional fulfilment and supply chain resilience.
• Brand and Product Strategy:
  • CHERY: Flagship mass-market brand with strong family appeal and a full range of ICE, PHEV, REEV, and BEV models.
  • JETOUR: Focused on family travel/outdoor leisure, offering ICE and PHEVs.
  • EXEED: Premium segment targeting performance and luxury.
  • iCAR: Technology-oriented, targeting Gen-Z with smart EVs.
  • LUXEED: Intelligence and innovation-driven, with smart sedans and SUVs.
• R&D Investment: R&D expenses rose 23.8% to RMB 11.4 billion, reflecting continued focus on next-generation technologies, vehicle electrification, and intelligentization.

Segmental and Geographical Performance

• Revenue by Segment:
  • Passenger vehicles: RMB 272.4 billion (90.7% of total revenue)
  • Automotive parts/components: RMB 21.7 billion (7.2%)
  • Others: RMB 6.2 billion (2.1%)
• NEV Revenue: NEV sales surged 66.4% to RMB 98.0 billion, now accounting for 32.6% of passenger vehicle revenue, up from 21.9% in 2024. ICE vehicle sales declined 7.2% to RMB 174.3 billion, reflecting an industry shift towards NEVs.
• Geographical Revenue: Revenue from outside Greater China exceeded domestic sales for the first time. Overseas revenue soared to RMB 157.4 billion (52.4% of total), up from RMB 100.9 billion, while domestic revenue declined to RMB 142.9 billion.

Profitability and Cost Structure

• Gross Profit: Increased 14.1% to RMB 41.4 billion; overall gross margin improved to 13.8%.
• NEV Margin Pressure: Gross margin for NEVs remains lower (8.8%) compared to ICE vehicles (15.0%), reflecting fierce competition and higher input costs.
• Other Income and Gains: Up 79% to RMB 11.2 billion, driven by a large RMB 2.7 billion net foreign exchange gain and RMB 1.1 billion gain on disposal of a distribution network.
• Selling/Distribution Expenses: Jumped 32.6% to RMB 11.1 billion, mainly from increased marketing and staff costs, reflecting global expansion and brand-building efforts.
• Administrative Expenses: Stable, at RMB 6.1 billion.
• Finance Costs: Fell 9.3% to RMB 2.1 billion due to loan repayments.
• Net Impairment Losses: RMB 189 million loss due to additional provisions for receivables, compared to a net gain in 2024.

Balance Sheet and Cash Flow Highlights

• Assets and Liabilities:
  • Total assets: RMB 259.3 billion (up from RMB 213.9 billion)
  • Net assets: RMB 50.8 billion (doubled from RMB 25.9 billion)
  • Gearing ratio improved to 80.4% from 87.9%, reflecting stronger equity base.
• Cash Position: Cash and cash equivalents at year-end were RMB 47.0 billion (down from RMB 62.7 billion), with significant holdings in RMB, USD, EUR, and HKD.
• Liquidity: Net current assets turned positive (RMB 9.7 billion), a significant improvement from net current liabilities in 2024, supported by higher trade receivables and financial assets at fair value through profit or loss.
• Indebtedness: Bank loans and other borrowings decreased to RMB 15.9 billion (from RMB 23.2 billion), with most borrowings unsecured. Lease liabilities rose to RMB 4.1 billion.
• Capital Expenditure: Jumped to RMB 14.3 billion (from RMB 8.4 billion), reflecting aggressive investment in capacity and technology.
• Capital Commitments: Increased to RMB 5.4 billion (from RMB 2.5 billion). Pledged assets also rose sharply to RMB 23.9 billion, reflecting collateral for financing activities.
• Operating Cash Flow: Net cash inflow from operations fell sharply to RMB 20.1 billion (from RMB 44.9 billion), mainly due to accelerated supplier payments. Outflows from investing activities increased as the company purchased more wealth management products and structured deposits.

Dividends and Shareholder Returns

• Final Dividend: RMB 0.86 per share, subject to approval, payable on or before 26 June 2026.
• Dividend Policy: The Company continues its policy of stable dividends, with total proposed dividends for 2025 amounting to nearly RMB 9 billion (including interim).
• No Share Buybacks: No purchase, sale, or redemption of listed securities during the year; no treasury shares held at year-end.

Use of IPO Proceeds

• Net proceeds from the Hong Kong listing (HK\$10.13 billion) remain largely unutilized (HK\$9.93 billion balance as of year-end). Funds are earmarked for R&D (including NEV expansion, technology upgrades, intelligent cockpit), overseas market expansion, production facility upgrades, and general corporate purposes. The majority of these proceeds are expected to be used by 2028-2030.

Risks and Forward-Looking Statements

• Competitive Landscape: The Group faces intense domestic and international competition, especially in the rapidly growing NEV market.
• External Risks: Global expansion brings exposure to geopolitical tensions, trade policy changes, currency volatility, and regulatory differences.
• Supply Chain: Chery relies on a diversified supplier network, exposing it to price volatility and potential supply disruptions.
• Technological Transition: The shift towards NEVs, while driving growth, has compressed NEV margins compared to traditional ICE vehicles. Ongoing R&D and brand investment are critical to long-term competitiveness and profitability.
• Financial Risks: The Group is exposed to interest rate, foreign exchange, credit, and liquidity risks. Active risk management strategies, including foreign currency hedges and credit controls, are in place.
• Pillar Two Tax: The Group does not expect a material exposure to new global minimum tax rules as of 2025, but continues to monitor regulatory changes.

Corporate Governance and Compliance

• Board Structure: The roles of Chairman and CEO remain combined under Mr. Yin Tongyue, which is a deviation from the relevant Hong Kong Corporate Governance Code, but justified by the Board as necessary for effective leadership and strategic direction.
• Risk Control and Audit Committee: All annual results and financial disclosures have been reviewed and confirmed to meet regulatory requirements.
• No Significant Events: Other than the proposed dividend, no material post-balance sheet events or contingent liabilities were reported.

Other Noteworthy Items for Investors

• Major Growth in Overseas Markets: For the first time, overseas revenue exceeded domestic sales, highlighting Chery’s successful internationalization strategy and potential for further global growth.
• R&D and Capital Spending: The company is investing aggressively in NEV and smart vehicle technologies, which may impact short-term margins but is expected to drive long-term value creation.
• Labour Force: The Group’s workforce grew substantially to over 70,000 employees, reflecting ongoing expansion in capacity and R&D.
• Stock Price Sensitivity: The large dividend payout, strong profit growth, and rapid NEV expansion are all positive share price catalysts. However, the sharp drop in operating cash flow, increased receivables, and margin pressure in NEVs are risks investors should monitor.
• IPO Proceeds Deployment: The slow utilization of IPO proceeds may draw investor attention regarding the pace of Chery’s strategic investments.

Conclusion

Chery Automobile Co., Ltd. delivered another year of robust growth, with record revenues and profits, a strengthened global position, and substantial investments in NEV and smart vehicle technology. The Company’s ongoing transformation and internationalization, supported by a strong balance sheet and ample liquidity, position it well for future growth. However, investors should remain attentive to risks surrounding NEV profitability, cash flow volatility, and the execution of its ambitious expansion plans.

Disclaimer: This article is prepared for informational purposes only and does not constitute investment advice. Investors are urged to consult their financial advisors and review the official financial statements and disclosures before making any investment decisions. The information is derived from the official annual report and may be subject to change or update.

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