China Business News reporter Zhuang Linghui and Lu Zhikun reported in Beijing

Recently, Juli Rigging (.SZ) released its 2025 semi-annual report. In the first half of 2025, Juli Rigging's revenue and net profit increased both times, and its non-net profit turned losses into profits.

At the same time, Juli Rigging announced that it plans to invest in the establishment of Juli Rigging Ocean Technology (Tianjin) Co., Ltd. with its own cash to enhance the company's industrialization and scale effect in the field of deep-sea technology.

A reporter from China Business News noticed that while net profit increased significantly, in the first half of 2025, Juli Rigging's gross profit margin dropped to below 20%, and the scale of accounts receivable increased. Regarding the current profit growth, Juli Rigging attributed it to the company's continued implementation of lean improvement measures to promote lean production and improve operational efficiency.

Net profit increased significantly and gross profit margin fell

In the first half of 2025, Juli Rigging's performance rebounded significantly. In the current period, Juli Rigging achieved revenue of 1.14 billion yuan, a year-on-year increase of 17.45%; net profit attributable to shareholders was RMB 09 million, a year-on-year increase of 137.21%; net profit excluding non-operating items was RMB 06 million, a year-on-year increase of 450.30%.

In comparison, in the first half of 2024, Juli Rigging's revenue and net profit both fell, and its net profit was incurred after deducting non-net profit; in the first half of 2023, Juli Rigging's revenue increased slightly, while its net profit declined. In addition, in 2023 and 2024, Juli Rigging was in a loss state, and its net profit decreased significantly year-on-year, with a decrease of 195.92% and 426.15% respectively.

Regarding the reasons for the performance changes in the first half of 2025, Juli Rigging stated in its performance forecast that during the reporting period, the company strictly implemented its global layout in accordance with the established goals at the beginning of the year, and formed a multi-dimensional business expansion model by strengthening cross-border overseas travel, national policy orientation (such as the "Belt and Road" initiative), infrastructure construction, marine engineering and new energy fields (such as wind power), further increasing market share and achieving steady growth in operating income.

In addition, Juli Rigging also stated that the company continued to implement lean improvement measures to promote lean production, further improved operational efficiency, enhanced the company's profit level, and achieved steady growth in operating profits.

It is worth noting that while net profit increased significantly, Juli Rigging's gross profit margin declined in the first half of 2025. Wind data shows that the gross profit margin of Juli Rigging during the period was 18.00%, compared with 21.16% in the same period last year.

Industry analysts believe that in the context of a decline in gross sales profit margin, listed companies can increase profits by optimizing cost control or product structure, reducing period expenses, etc.

In the first half of 2025, Juli Rigging sales expenses and management expenses decreased by 23.49% and 7.60% year-on-year respectively, and R&D investment decreased by 16.99% year-on-year. However, the operating costs of Juli rigging increased by 22.15% year-on-year. In response, Juli Rigging explained that the main reason was that the company's financial software upgraded during the reporting period, and the accounting of transportation costs was refined, and the transfer of transportation costs into the accounting of operating costs accounts.

In addition, in the first half of 2025, the net cash flow generated by Juli Rigging business activities increased by 56.98% year-on-year, mainly due to the increase in cash received from the current sales of goods and services.

In recent years, the net cash flow generated by Juli Rigging business activities has been negative in the first half of the year, and the annual data can basically turn positive. In the first half of 2025, although the net cash flow generated by Juli Rigging business activities increased year-on-year, it was still negative, about -0.43 million yuan.

Increase investment in the field of marine technology

At the same time as the interim report was released, Juli Rigging announced that the company plans to establish a wholly-owned subsidiary Juli Rigging Marine Technology (Tianjin) Co., Ltd. with its own cash capital of RMB 100 million.

"In recent years, the company has carried out the development of long-term mooring systems in response to the key technical bottlenecks of marine engineering equipment, mastered the key technologies for long-term mooring product design and manufacturing, and solved the technical bottlenecks of high fatigue performance of mooring products." Juli Rigging said that in 2024, the company actively carried out market promotion based on the three major product lines it has built (single-strand permanent mooring wire rope, mooring fiber cable, and deep-sea mooring system accessories).

Regarding the purpose of establishing the above wholly-owned subsidiary this time, Juli Rigging stated that it is to enhance the company's industrialization and scale effect in the field of deep-sea technology, and benchmark against international similar industries to build core competitiveness of efficient service and cost advantages.

Juli Rigging said that with the continuous heating of global marine resource development, the marine engineering industry has flourished, and the continuous expansion of offshore oil and gas exploitation, marine renewable energy development, marine fishery aquaculture, and cross-sea bridge construction have brought broad development space to the deep-sea mooring product market.

In fact, in the 2025 semi-annual report, Juli Rigging also pointed out that in the first half of 2025, the market demand in the rigging industry increased steadily, but the structural differentiation was obvious. Among them, the demand in traditional fields is stable, mainly reflected in the slowdown in demand growth in traditional industries such as metallurgy, mining, and construction, but the stock market is still large. The demand in emerging fields is growing strongly, mainly reflected in the new energy fields. The increase in installed capacity of wind power, photovoltaics, nuclear power, offshore wind power, etc. drives the demand for high-intensity and deep-sea economic rigging, and the demand for supporting rigging such as 5G base stations, ultra-high voltage, and intercity high-speed rail has increased. Overseas infrastructure projects represented by the "Belt and Road" drive rigging exports.

"The company's establishment of the target company this time will help improve the company's sustainable development capabilities." Juli Rigging reminded that after the establishment of the target company, there will be risks of profit uncertainty or failure to meet expectations due to uncontrollable factors; at the same time, the target company is still in the planning stage and will not have a significant impact on the company's future financial status and operating results in the short term.