Company Q&A | Diwei’er: The increase in fixed assets is mainly due to the transfer of project assets from the ‘Precision Manufacturing Project for Key Components of Oil and Gas Equipment’ to fixed assets, with a controllable impact from the additional dep

Gelonghui, April 20th | An investor asked Diwei’er on an interactive platform: The amount of construction-in-progress to be transferred to fixed assets in 2025 will reach 564 million yuan, representing an 83% increase in fixed assets. What is the estimated impact of the additional depreciation on future profits? Additionally, the net profit growth rate of 39% is significantly higher than the revenue growth rate of 7%. What are the main reasons for the improvement in gross margin and its sustainability? Diwei’er responded that the increase in fixed assets is mainly due to the transfer of assets from the ‘Precision Manufacturing Project for Key Components of Oil and Gas Equipment’ project, and the impact of the additional depreciation is controllable. The improvement in the comprehensive gross margin in 2025 is mainly attributable to the continuous optimization of the company’s product mix.