Hengtai Securities reported QQ2 2025 revenue of 1,461,847,000 CNY, up 109.71% year over year, with gross profit matching revenue and a gross margin of 1.0000. The company posted operating income of 853,278,000 CNY (operating margin of 58.37%), but a sizable negative other income expense of -538,919,000 CNY reduced pretax income to 314,359,000 CNY. After tax, net income stood at 240,733,000 CNY, delivering a net margin of 16.47% and basic EPS of 0.0924 CNY. Despite a strong top-line growth trajectory and solid core profitability in QQ2, the earnings were materially affected by non-operating items, underscoring the importance of monitoring non-operating volatility in future quarters.
From a fundamentals perspective, EBITDA and explicit operating metrics indicate a healthy core business, supported by a high operating margin and favorable profitability ratios. Yet liquidity and balance-sheet dynamics warrant attention: current ratio is 1.283, cash ratio is modest at 0.0559, and leverage remains evident with debt to equity around 1.04 and long-term debt to capital at 0.184. The stock also trades at a low price-to-earnings multiple (about 5.06x) and a price-to-book of 0.57x, implying potential undervaluation relative to global financial services peers, should earnings quality stabilize and non-operating headwinds ease.
Overall, the QQ2 performance demonstrates meaningful growth in core activities and a growth outlook tied to China’s capital markets, but the outsized non-operating charge and liquidity nuances introduce execution risk that investors should watch closely for the subsequent quarters.