MORIMATSU INTL (02155) disclosed its annual results for 2025 on March 23. During the reporting period, the company's revenue reached RMB 6.955 billion, a slight increase of 0.1% year-on-year. Gross profit stood at RMB 1.817 billion, with a gross profit margin of 26.1%. Net profit was RMB 584 million, resulting in a net profit margin of 8.4%. Despite facing multiple macroeconomic challenges, including contraction in key end-market demand, shifts in the international geopolitical landscape, overcapacity in certain downstream industries, and adjustments to global low-carbon policies, the company secured new orders totaling RMB 8.569 billion, a significant increase of 43.6% compared to the previous period. This performance highlights the effective synergy between its "Alpha Strategy" and "Beta Advantage."
Significant divergence was observed across regions and business segments, with the Alpha Strategy employed to hedge against cyclical fluctuations. MORIMATSU INTL has consistently built a "non-replicable" development path through diversified operations. Its business spans over 40 countries and regions, covering six core industries: biopharmaceuticals, consumer chemicals, power battery materials, oil and gas refining, chemicals, and electronic chemicals. This cross-industry and cross-regional diversification has fostered anti-cyclical capabilities under its Alpha Strategy, allowing the company to rely on complementarity between segments to ensure overall performance stability amidst cyclical volatility in different industries.
Regionally, 2025 was characterized by "contraction in mainland China and comprehensive overseas expansion" for MORIMATSU INTL. Revenue from Asia (excluding mainland China) grew by 53.3% to RMB 3.102 billion, increasing its share to 44.6% and making it the largest market. Revenue from the European market surged by 86.6% to RMB 625 million. In contrast, revenue from mainland China declined by 42.2% to RMB 1.589 billion, reducing its share to 22.9%. The rapid expansion in overseas markets, particularly in Europe, North America, and Southeast Asia, represents a strategic move to actively develop new growth drivers. However, this expansion is accompanied by short-term profit pressures resulting from upfront investments and adjustments to bidding strategies.
Business segments also showed notable divergence. Revenue from the pharmaceutical and biopharmaceutical segment increased by 40.5% to RMB 2.228 billion, with the gross profit margin rising by 1.7 percentage points to 28.0%, establishing it as the core growth engine. The consumer chemicals segment saw revenue soar by 178.8%, with the gross profit margin climbing to 27.2%, demonstrating the profitability of its customized solutions. This divergent pattern reflects both the fact that some sectors within the diversified portfolio are in investment or adjustment phases, and the company's overarching approach of deepening its presence in advantageous areas to hedge against cyclicality through its Alpha Strategy.
The trade-offs of flexible allocation: Beta Advantage exchanges cost for opportunity. If the Alpha Strategy defines the direction of expansion, the Beta Advantage is manifested in the company's highly generalized human resources, technology platforms, and manufacturing capabilities, which form a flexible system adept at handling uncertainty. The majority of technical and manufacturing staff are capable of serving multiple industries, and manufacturing bases can flexibly allocate production capacity according to downstream cyclical fluctuations without starting from scratch. While this flexibility helps maintain revenue, it also brings pressure from expanding costs and expenses. Financial data shows that MORIMATSU INTL's direct labor costs increased by 22% year-on-year to RMB 751 million. Installation and repair expenses rose by 36.3% to RMB 744 million. Furthermore, in 2025, the company's cost of sales grew by 4.9% year-on-year to RMB 5.138 billion. The company attributed these changes to increased expenses driven by the expansion of overseas operations, which required larger overseas marketing teams and upfront technical support costs.
Overall, the effectiveness and costs associated with the Alpha and Beta strategies are clearly evident. The company indicated in its announcement that it has secured substantial orders across various regions, including North and South America, Asia, Europe, and Oceania, in industries such as pharmaceuticals and biopharmaceuticals, power battery raw materials, consumer chemicals, and oil and gas refining. Recently, during an earnings briefing, the company also stated that rapidly growing overseas demand is simultaneously creating opportunities in emerging industries and facilitating the continued application of traditional technologies in new scenarios. In 2026, the company is expected to achieve substantive breakthroughs in non-traditional sectors.
Capital deployment across multiple fronts highlights efficiency through diversity and flexibility. Reviewing MORIMATSU INTL's investment activities in 2025 in the context of its strategic layout reveals a high degree of consistency and rapid execution efficiency. In 2025, the company's total assets exceeded RMB 10 billion for the first time, reaching RMB 10.127 billion, a year-on-year increase of 13.7%. This growth was comprised of a RMB 902 million increase in current assets and a RMB 316 million increase in non-current assets. The growth in current assets was primarily due to a significant rise in contract assets and advance receipts from new orders, while the increase in non-current assets stemmed from ongoing investments in overseas acquisitions and capacity expansion.
Regarding its global footprint, the company established seven new subsidiaries throughout the year, covering Southeast Asia, South Asia, and Europe, including countries such as Malaysia, Italy, India, and Thailand. These subsidiaries focus on building service centers and manufacturing bases for sectors like energy materials and life sciences. This has further enhanced the company's global supply chain responsiveness and localized service resources in key regions, providing crucial support for the significant growth witnessed in Asian and European markets.
In terms of equity acquisitions, the company completed two major acquisitions in 2025. First, it acquired 100% equity of Switzerland's Bioengineering AG and its subsidiaries, aiming to continuously strengthen its technological capabilities and global positioning in the high-end life science equipment sector. Second, it achieved full ownership of MORIMATSU (Thailand) Co., Ltd., further optimizing its overseas production capacity layout and enhancing delivery and service capabilities for customers across different global regions.
In summary, MORIMATSU INTL's stable revenue and high order growth in 2025 are attributable to the synergistic combination of the proactive expansion driven by its Alpha Strategy and the flexible support provided by its Beta Advantage. Although profits faced temporary pressure due to strategic investments, the efficient deployment of globalization efforts and capital operations has accumulated substantial momentum for the company's next phase of growth, demonstrating robust resilience to navigate economic cycles.
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