Fiscal Year ended December 31, 2025, Full Year Highlights:
Revenues for the fiscal year ended December 31, 2025, increased by 39.0% to $19.6 million compared to the prior year, driven by growth in both domestic and global markets; International sales grew by 58.2%.
Gross profit increased by 41.2% to $6.4 million compared to $4.5 million in 2024.
Operating expenses were approximately $3.9 million, representing a decrease of $2.2 million compared to $6.1 million in 2024.
Sales and marketing expenses increased to $0.9 million compared to $0.7 million in 2024.
Research and development expenses increased $0.2 million to $1.0 million for the year ended December 31, 2025.
General and administrative expenses decreased $0.6 million.
Net income reached approximately $1.9 million, or $0.03 per diluted share, for the year ended December 31, 2025, representing an approximate $3.8 million year-over-year turnaround from a net loss of approximately $1.9 million, or $0.11 per diluted share, for the year ended December 31, 2024.
"Our strong performance for the fiscal year 2025 marked an important turnaround for Hongli Group as we successfully navigated the prior year's global economic headwinds to deliver a period of robust growth and improved operating results," said Mr. Jie Liu, Chief Executive Officer of Hongli Group. "Our financial results reflected a meaningful recovery, characterized by a 39.0% increase in total revenues to $19.6 million. This growth was driven by recovery in the domestic market in China and a 58.2% increase in our international sales, demonstrating the growing global demand for our products. By maintaining a disciplined approach to our cost structure and optimizing our financing through more favorable interest rates, we achieved a gross margin expansion to 32.5% and a substantial reduction in operating expenses. Most importantly, our focus on high-quality growth has allowed us to return to profitability, delivering $1.9 million in net income compared to a net loss in the previous year. As we look ahead, we remain committed to strategic investments in R&D and market expansion. We plan to focus on developing products and components for solid-state battery and other energy storage applications, which we believe may position Hongli Group to benefit from the continued recovery of the construction machinery sector and global energy transition trends, while delivering long-term, sustainable value to our shareholders."
Revenues
In 2025, Chinese manufacturers recovered after an economic slowdown triggered by weakening global demand last year. These factors actively affected our revenue performance. For the year ended December 31, 2025, our total revenues increased by approximately $5.5 million, or 39.0%, to $19.6 million, compared to $14.1 million for the year ended December 31, 2024.
The increase was primarily driven by a growth in PRC sales, which growth by approximately $4.4 million to $16.6 million in 2025, from $12.2 million in 2024, mainly due to increased orders from our domestic customers. Moreover, international sales also increased, reaching $3.0 million in 2025, an increase of $1.1 million, or 58.2%, from $1.9 million in the prior year.
Cost of revenues
Our cost of revenues consists primarily of expenses incurred to manufacture our products, including the cost of raw materials, direct labor, and depreciation of production machinery and equipment. For the year ended December 31, 2025, the cost of revenues increased by approximately $3.6 million, or 37.9%, compared to the same period in 2024. This increase was generally in line with the growth in total revenues.
Gross profit
Our gross profit was approximately $6.4 million in 2025, representing an increase of $1.9 million, or 41.1%, compared to $4.5 million in 2024. As a percentage of revenues, our gross margin growth to 32.5% in 2025 from 32.0% in 2024, an increase of 0.5 percentage points or representing a 1.7% relative increase.
Operating expenses
Operating expenses primarily consisted of salary expenses and related employee benefits relating to our sales and marketing, finance, legal, human resources and executive office personnel, and included research and development expenses, shipping and handling expenses, depreciation and amortization expenses, office overhead, professional service expenses and travel and transportation costs.
Operating expenses were approximately $3.9 million for the year ended December 31, 2025, representing a decrease of $2.2 million, or 35.4%, compared to $6.1 million in 2024. The decrease was primarily driven by $2.0 million in share-based compensation recognized in 2024. On May 7, 2024, the Company issued 1,200,000 Ordinary Shares to three employees as part of their 2024 compensation packages. The Ordinary Shares were valued at $1.64 per share, based on the closing market price on May 6, 2024, resulting in $1,968,000 recognized as share-based compensation expense during the year.
Sales and marketing expenses
Our sales and marketing expenses primarily consisted of salaries and related employee benefits for sales and marketing personnel, as well as shipping and handling costs, port and customs clearance fees, storage expenses, promotional and marketing expenditures, and other costs associated with sales and marketing activities. For the year ended December 31, 2025, sales and marketing expenses were approximately $0.9 million, representing an increase of $0.2 million, or 39.7%, compared to $0.7 million in 2024. The increase was generally in line with the growth in sales during 2025.
Research and development ("R&D") expenses
Substantially all research and development (R&D) costs reflect the Company's efforts in product development activities. In 2025, R&D expenses were approximately $1.0 million, representing an increase of $0.2 million, or 21.5%, compared to $0.8 million in 2024. The increase was primarily attributable to the Company's increased investment in research and development as the agricultural machinery and construction machinery markets continued to develop favorably in 2025. The Company plans to increase R&D investment as needed in the future to support the development of new products.
General and administrative ("G&A") expenses
Our general and administrative (G&A) expenses primarily consisted of salaries and employee benefits, repair and maintenance, professional services, depreciation and amortization, travel, entertainment, and office supplies. In 2025, other G&A expenses were approximately $2.0 million, a decrease of $0.6 million, or 23.9%, compared to $2.6 million in 2024. The decrease was mainly attributable to a decrease of $0.4 million in professional service expenses as less professional service was provided in 2025.
Interest and financing expenses, net
Interest and financing expenses, net primarily consisted of interest expenses on loans, finance leases, and other financial liabilities, as well as expenses related to the discounting of notes receivable prior to maturity, net of insignificant interest income. Interest and financing expenses, net were approximately $470,000 in 2025, a decrease of $3,000, or 0.7%, compared to approximately $466,000 in 2024. The decrease was mainly attributable to lower interest expenses in 2025, as the Company refinanced its short-term loans at more favorable interest rates. The weighted average interest rate on short-term loans was 3.46% in 2025, compared to 4.35% in 2024.
Other income
Other income primarily consists of proceeds from the sale of scrapped materials, government subsidies, foreign currency exchange gains or losses, gains or losses on the disposal of property and equipment, and other miscellaneous items. In 2025, the Company recorded other income of approximately $216,000, representing an increase of $31,000, or 16.5%, compared to $185,000 in 2024. The increase was mainly due to a gain of approximately $17,000 on the disposal of equipment in 2025, compared to a loss of approximately $77,000 recognized in 2024 from similar transactions.
Total other income and expenses, net
Total other income and expenses, net, amounted to a net expense of approximately $262,000 in 2025, a decrease of $28,000, or 9.7%, compared to $290,000 in 2024. This decrease was primarily attributable to the changes in interest and financial expenses, net and other income, as discussed in the respective sections above.
Income (loss) before income taxes
Our income before income taxes was approximately $2.2 million for the year ended December 31, 2025, representing an increase of approximately $4.0 million compared to loss before income taxes of approximately $1.9 million in 2024. This growth was primarily attributable to an increase in sales and other factors discussed in the sections above.
Net income (loss)
As a result of the foregoing, we reported a net income of approximately $1.9 million, or $0.03 per basic and diluted share, for the year ended December 31, 2025, compared to net loss of approximately $1.9 million, or $0.11 per basic and diluted share, for the same period in 2024.
Access to the FY2025 Annual Report:
The Company's FY2025 Annual Report on Form 20-F is accessible on the SEC's EDGAR system at www.sec.gov. Shareholders may also request a hard copy of the FY2025 Annual Report, including the audited consolidated financial statements, free of charge, by contacting the Company at [email protected].
About Hongli Group Inc.
Hongli Group Inc. is a Cayman Islands holding company, and through a series of contractual arrangements, consolidates the financial results of Shandong Hongli Special Section Tube Co., Ltd. and its subsidiaries (collectively, "Hongli Operating Group"). Hongli Operating Group is a cold roll formed steel profile manufacturer with operating subsidiaries in China. The Hongli Operating Group designs, customizes and manufactures cold roll formed steel profiles for machineries and equipment in a variety of sectors, including but not limited to mining and excavation, construction, agriculture and transportation. The Hongli Operating Group, with over 25 years of operating history, has developed customers in more than 30 major cities in China as well as a global network including South Korea, Japan, and U.S. Hongli Operating Group currently has 11 cold roll forming production lines and produces a variety of distinct profile products in a broad range of materials, sizes and shapes.
Forward-Looking Statements
Forward-looking statements include statements concerning plans, objectives, goals, strategies, future events or performance, and underlying assumptions and other statements that are other than statements of historical facts. When the Company uses words such as "may," "will," "would," "intend," "should," "believe," "expect," "anticipate," "project," "estimate," "continue" or similar expressions that do not relate solely to historical matters, it is making forward-looking statements. Forward-looking statements are not guarantees of future performance and involve risks and uncertainties that may cause the actual results to differ materially from the Company's expectations discussed in the forward-looking statements. These statements are subject to uncertainties and risks, including, but not limited to, the following: the Company's ability to achieve its goals and strategies, the Company's future business development and plans for future business development, including its financial conditions and results of operations, product and service demand and acceptance, reputation and brand, the impact of competition and pricing, changes in technology, government regulations, import and export restrictions, fluctuations in general economic and business conditions, the Company's ability to comply with Nasdaq continued listing standards and assumptions underlying or related to any of the foregoing and other risks contained in reports filed by the Company with the U.S. Securities and Exchange Commission ("SEC"). For these reasons, among others, investors are cautioned not to place undue reliance upon any forward-looking statements in this press release. Additional factors are discussed in the Company's filings with the SEC, which are available for review at www.sec.gov. The Company undertakes no obligation to publicly revise these forward-looking statements to reflect events or circumstances that arise after the date hereof.
For investor and media inquiries, please contact:
Hongli Group Inc.Mr. Jie LiuEmail: [email protected]Mobile: +86-0536-2180886
HONGLI GROUP INC.
CONSOLIDATED BALANCE SHEETS
(Amounts in U.S. Dollars ("US$"), except for number of shares and per share data)
As of December 31,
2025
2024
US$
US$
ASSETS
Current assets
Cash and cash equivalent
1,811,149
909,716
Restricted cash
74,018
15,070
Accounts receivable, net
9,273,016
5,809,374
Notes receivable
1,041,185
522,331
Inventories, net
2,463,460
2,674,001
Due from related parties, officers
356,576
-
Prepayments and other current assets
1,064,656
2,004,889
Total current assets
16,084,060
11,935,381
Non-current assets
Property, plant and equipment, net
12,292,214
10,385,742
Prepayments for purchase of Yingxuan Assets
4,951,021
5,339,093
Intangible assets, net
4,498,986
4,432,403
Deposit for investment
34,316,583
32,877,029
Deferred tax assets, net
47,781
40,773
Total non-current assets
56,106,585
53,075,040
TOTAL ASSETS
72,190,645
65,010,421
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Short-term loans
11,515,024
6,079,252
Accounts payable
1,876,141
1,380,201
Due to related parties - officers
4,207
21,247
Income tax payable
185,562
36,505
Accrued expenses and other payables
777,588
694,712
Total current liabilities
14,358,522
8,211,917
Non-current liabilities
Long-term loans
-
3,305,209
Total non-current liabilities
-
3,305,209
Total liabilities
14,358,522
11,517,126
COMMITMENTS AND CONTINGENCIES
SHAREHOLDERS' EQUITY:
Ordinary shares, $0.0001 par value, 500,000,000 shares authorized, 73,438,750 and 73,438,750 shares issued and outstanding as of December 31, 2025 and 2024, respectively
7,344
7,344
Additional paid-in capital
42,998,556
42,998,556
Statutory reserve
370,683
370,683
Retained earnings
13,666,910
11,724,070
Accumulated other comprehensive income (loss)
788,630
(1,607,358)
TOTAL SHAREHOLDERS' EQUITY
57,832,123
53,493,295
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY
72,190,645
65,010,421
HONGLI GROUP INC.
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)
(Amounts in US$, except for number of shares and per share data)
For the years ended December 31,
2025
2024
2023
US$
US$
US$
Revenues, net
19,600,691
14,105,620
15,997,954
Cost of revenues
(13,221,811)
(9,585,873)
(10,752,114)
Gross profit
6,378,880
4,519,747
5,245,840
Operating expenses:
Sales and marketing expenses
(935,432)
(669,542)
(631,359)
General and administrative expenses
(2,015,663)
(4,615,189)
(2,631,085)
