Shenchi Electric has responded to the Shanghai Stock Exchange's inquiry regarding its 2025 annual report, explaining the reasons behind rising revenue without profit growth and the gross margin gap between its domestic and overseas operations. The company stated that its overseas business is dominated by end products, accounting for 89.65 percent, with a gross margin of 29.89 percent. Domestically, over 70 percent of revenue comes from low-margin components such as motors and accessories, with a gross margin of only around 9 percent. The core reason for the difference lies in product mix rather than costs. In terms of revenue, domestic revenue grew 28.53 percent, while overseas revenue fell 2.87 percent, mainly because the tariff suspension in the first half of 2025 spurred domestic OEMs to rush exports, while reduced hurricane frequency in North America caused revenue from the US subsidiary to drop from 405 million yuan to 238 million yuan. The company said its main business has not seen adverse changes and it has responded through localized production capacity, foreign exchange hedging, and second growth curves such as energy storage.
Senci Electric Machinery Co LtdCompany responds to SSE inquiry, explaining revenue/profit divergence and margin gap due to product mix, tariffs, and hurricanes; no clear positive or negative impact.