The 2025 annual report disclosures for A-share listed companies have concluded, revealing detailed financial data that highlights the profitability across various sectors over the past year. Among numerous financial metrics, the gross profit margin on sales has garnered significant attention as a primary indicator of a company's core competitiveness and profit quality.
Wind data indicates that, excluding the financial sector, the average gross profit margin for A-share listed companies in 2025 was 27.22%, a slight decrease of 0.41 percentage points compared to 27.63% in 2024. However, the performance of gross margins varied drastically between industries. Biopharmaceuticals and beauty care have long dominated the rankings with their high margins, while sectors such as coal, agriculture, forestry, animal husbandry & fishing, architectural decoration, petroleum & petrochemicals, and steel consistently recorded the lowest margins.
Twenty-two companies surpassed Kweichow Moutai in terms of gross margin. The gross profit margin is commonly used to gauge a company's or industry's ability to convert raw materials or services into profit. On one hand, it quantifies core competitiveness, directly reflecting a firm's bargaining power within the industrial chain. A high gross margin typically signifies technological barriers, brand premium, cost control advantages, or a unique business model. On the other hand, the gross margin acts as a reservoir for net profit; if it is too low, even extreme reductions in management and sales expenses would leave minimal room for net profit.
Overall, 78 listed companies achieved gross margins exceeding 80%, with 30 surpassing 90%. The top three companies by gross margin were all from the biopharmaceutical sector, specializing in innovative cancer drugs. These were Haichuang Pharmaceutical-U, Shouyao Holdings-U, and Allist Pharmaceuticals, with gross margins of 98.62%, 96.93%, and 96.83%, respectively.
Haichuang Pharmaceutical led the A-share gross margin rankings. In May 2025, its first self-developed Class 1 new drug, deuterated enzalutamide soft capsules for advanced prostate cancer, received approval from the National Medical Products Administration and was included in the National Reimbursement Drug List in December 2025. The drug generated domestic sales revenue of 20.1925 million yuan that year, with a gross margin as high as 99.79%.
Shouyao Holdings primarily focuses on the iterative upgrading and clinical breakthroughs of domestic small-molecule anticancer drugs. The company's products are still in the clinical R&D stage and have not yet entered commercialization. Its 2025 revenue mainly came from technology development, technical services, and intermediate product sales, with the gross margin for technology development and services reaching 99.87%.
Allist Pharmaceuticals saw sustained sales growth of its core product, the Class 1 small-molecule targeted drug Fumeitinib Mesylate Tablets, last year. Additionally, its new indication for Golaresib in second-line treatment of NSCLC was approved in May 2025. The gross margin for its anti-tumor products was 97.28%.
Investors often regard Kweichow Moutai as the benchmark for gross margin ceilings. Last year, Kweichow Moutai's gross margin was 91.23%, but 22 A-share listed companies exceeded this level.
At the lower end of the spectrum, Wind data shows that 746 listed companies had gross margins below 10%, with 119 reporting negative gross margins. A negative gross margin is an anomalous financial situation, indicating that the sales price of products cannot cover direct production costs, resulting in losses that increase with sales.
Huazhi Shumei, in the struggling film and television industry, recorded the lowest gross margin in the A-share market last year at -212.21%. The company's operating revenue fell by 40.78% year-on-year, with a net loss of 402 million yuan, a decline of 1344.84% compared to the previous year.
Similarly, Beijing Culture and Bona Film Group, also in the film and television sector, reported negative gross margins of -142.37% and -342.78%, respectively, for their movie businesses. In their annual reports, both companies noted that the film market is currently in a structural adjustment cycle, facing severe challenges, particularly with the pronounced divergence between popular and unpopular films, indicating that a full market recovery remains a distant goal.
The disparity in gross margins between industries is stark. Wind data highlights biopharmaceuticals and beauty care as high-margin sectors. Biopharmaceuticals led with an average industry gross margin of 48.9%, followed by beauty care at 44.06%.
An expert explained that the high margins in biopharmaceuticals stem from patent technology barriers, inelastic demand, low asset intensity cost structures, and the exclusion of high-margin segments like innovative drugs and high-end medical devices from centralized procurement. Beauty care benefits from expanding demand driven by the aesthetics economy, significant brand premiums, extremely low production costs, and increased industry concentration that further stabilizes pricing power.
While the overall gross margin for A-share listed companies showed a gradual decline, the beauty care industry bucked the trend with a consistent upward trajectory. Its average gross margin rose from 40.39% in 2022 to 43.05% in 2023, reached 43.81% in 2024, and exceeded 44% in 2025. This steady increase made it one of the few sectors capable of continuously improving profitability.
Key factors include the upgrade of core products to high-end, efficacy-enhanced versions, declining upstream raw material costs, optimized direct sales channels reducing intermediate losses, and the exit of smaller brands alleviating price wars, leading to a more stable pricing system.
The listed company with the highest gross margin in beauty care was Imeik Technology, a leader in aesthetic injectables, which maintained a gross margin above 90% for years, reporting 92.70% last year, though down 1.94 percentage points from the previous year.
Other sectors with relatively high gross margins, averaging between 30% and 40%, included computers, social services, food & beverage, textiles & apparel, commerce & retail, and defense & military industry. Among these, textiles & apparel, commerce & retail, and defense & military industry saw their average margins improve compared to 2024.
In contrast, low-margin industries such as real estate, building materials, basic chemicals, non-ferrous metals, power equipment, coal, agriculture, forestry, animal husbandry & fishing, architectural decoration, petroleum & petrochemicals, and steel had average gross margins between 10% and 20%. Notably, real estate and coal experienced significant declines of approximately 3 percentage points in their average margins from 2024.
This analysis shows that top-margin industries are typically technology-intensive or brand-driven, whereas low-margin sectors are often characterized by strong cyclicality, high competition, and product homogeneity in resource-based, processing, and manufacturing fields. It underscores that intangible assets like technology and brand are core elements supporting high gross margins.
The gross profit margin serves as a crucial measure of a company's core competitiveness. Its level reflects product barriers and pricing power, while its trend helps predict profit cycles, distinguish between revenue growth without profit improvement, and validate industry vitality, making it a key metric for investors to avoid low-quality profit traps.
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