The Other Side of Chery's 300 Billion Revenue: Profits Increased, But Cash Is Gone? | Analyzing Financial Reports

What are the deep reasons behind AI · Chery’s divergence between cash flow and profitability?

Welcome to follow my good friend: Girlfriend Finance

Image generated by AI

Written by | Sister Gan & Edited by | Alice

On March 18, 2026, “King of Exports” Chery Automobile disclosed its first annual report after listing on the Hong Kong Stock Exchange. First, revenue exceeded 300 billion, congratulations!

Further analysis of the data reveals that this highlight becomes somewhat complex and subtle.

From a leverage perspective, Chery’s 2025 can be summarized with two words: high growth, high leverage.

_1_

Looking at revenue growth rate, Chery Automobile has been steady and fast. From 92.6 billion in 2022 to 163.2 billion in 2023, then to 269.9 billion in 2024, and reaching 300.3 billion in 2025. In four years, it has completed a journey that might take peers ten years.

In terms of regional revenue distribution, in 2025, Chery’s overseas revenue was 157.4 billion yuan, surpassing domestic revenue of 142.8 billion yuan for the first time, becoming the largest source of income.

However, the leverage analysis shows that Chery’s pace in 2025 was much slower, with revenue growth of 11.26% year-on-year, a significant decline compared to 65.37% and 76.21% in 2024 and 2023.

Chart source | Eastmoney (Special thanks)

In terms of revenue structure, Chery’s revenue still mainly comes from passenger cars. In 2025, this segment generated 272.35 billion yuan, accounting for 90.7% of total revenue.

Among them, fuel vehicles contributed 174.33 billion yuan, accounting for 58.1%, and new energy vehicles contributed 98.02 billion yuan, accounting for 32.6%.

In 2025, Chery’s自主 passenger vehicle sales reached 2.6314 million units, a year-on-year increase of 14.6%;自主 new energy passenger vehicle sales reached 826,500 units, up 72.5%.

In 2025, Chery’s components and parts business became a highlight, with revenue of 21.725 billion yuan, up 36.9%, with a gross profit margin of 21.3%, significantly higher than the vehicle business.

However, this parts business accounts for only 7.2%, limiting its impact on overall profitability.

Additionally, in 2025, Chery’s other income was 6.21 billion yuan, down 13.9% year-on-year, mainly due to contraction in automotive-related supporting services.

_2_

On the profit side, Chery’s 2025 performance was slightly better than revenue growth.

In 2025, Chery’s gross profit was 41.443 billion yuan, up 14.1%, with overall gross profit margin slightly increasing by 0.3 percentage points to 13.8%; annual profit was 19.507 billion yuan, up 36.1%, with net profit margin rising from 5.3% to 6.5%.

Chery’s image as a tech innovator began to monetize. R&D expenditure in 2025 was 11.444 billion yuan, up 23.8%. Whether it’s the “Zhiji” project in cooperation with Huawei or its own high-end Exeed brand, Chery has not fallen behind in the intelligentization race, leaving room for future valuation.

However, leverage analysis shows that despite significant growth in new energy vehicles, current profitability still faces challenges: in 2025, this segment’s gross profit was 8.639 billion yuan, with a gross margin of about 8.8%, while fuel vehicles’ gross profit was 26.144 billion yuan, with a gross margin of 15%.

The low gross margin of new energy vehicles, combined with a decline in fuel vehicle gross margin, caused Chery’s overall passenger car gross profit margin to decrease from 13.2% in 2024 to 12.8% in 2025.

Nevertheless, the company’s overall gross profit margin still increased, from 13.5% in 2024 to 13.8% in 2025.

Notably, Chery’s “Other income and gains” surged 79.3% to 11.211 billion yuan in 2025. Besides routine government subsidies, notable items include “disposal of dealership network income” and “net exchange gains.”

This also reveals Chery’s major strategy in 2025—capital operations and overseas dividends.

In September 2025, Chery Automobile listed on the Main Board of the Hong Kong Stock Exchange, raising net proceeds of over 10 billion HKD. This greatly improved its balance sheet: total equity jumped from 25.9 billion to 50.8 billion.

Meanwhile, the strong performance in overseas markets brought not only sales but also exchange gains from the appreciation of USD and EUR, effectively leveraging export advantages to support domestic financial statements.

_3_

All these factors form Chery’s biggest strengths: strong export capability, solid technological reserves, and a complete brand matrix. But on the other side, leverage analysis also shows the costs of rapid scale expansion.

First, the asset-liability ratio. Although in 2025, Chery’s financial pressure eased, with the ratio dropping to 80.41%, this absolute value remains quite high in the industry.

In 2025, while interest-bearing debt decreased, accounts payable and notes payable reached 110.2 billion yuan, an increase of 8.7 billion over 2024.

Trade receivables also increased significantly. In 2025, Chery’s net trade receivables were 33.882 billion yuan, up 94.5%, far exceeding the 11.3% revenue growth. This indicates a “slow downstream collection and upstream receivables increase” situation in the supply chain.

As for cash flow, the “blood” of business operations, Chery shows a serious divergence from profitability: net cash inflow from operating activities in 2025 dropped from 44.887 billion yuan in 2024 to 20.13 billion yuan, more than halved.

The company’s explanation in the financial report states this was due to “accelerating payments to suppliers.”

Net cash outflow from investing activities was 30.048 billion yuan, significantly increasing year-on-year, mainly due to purchases of wealth management products, structured deposits, and long-term assets.

Net cash outflow from financing activities was 5.939 billion yuan, a decrease from the previous year, mainly because of reduced loan repayments.

As a result, Chery’s cash and cash equivalents at the end of 2025 fell from 62.693 billion yuan in 2024 to 46.955 billion yuan.

Looking at the gains and costs together, Chery’s 2025 profile is quite clear. From a leverage perspective, it is a “debt-supported battle, IPO as a pressure release” model.

This is a victorious breakthrough but also a risky charge.

The good news is that Chery finally reached the 300 billion revenue mark, proving to the world that Chinese traditional automakers are not only surviving against new entrants but are also rejuvenating.

The concern is that this high growth comes with high consumption. If market growth slows in 2026 or overseas markets fluctuate, this operating model will face severe tests.

For Chery itself, the strategic focus in 2026 may need to shift from “scale expansion” to “quality restoration.”

Note: All unmarked charts in this article are sourced from the company’s official website or announcements.