Hongli Group Inc.

What they do

The company designs and produces cold roll forming (CRF) profiles and special section steel tubes used in various industrial applications. Its operations are conducted primarily through its PRC subsidiaries, including Shandong Hongli Special Section Tube Company Limited (the VIE) and its subsidiaries. The company also has a CNC-related subsidiary, Beijing Haozhen Heavy Industry Technology Company Limited, indicating an expansion into heavy industry technology.

Revenue drivers

• Cold-rolled formed steel profiles — Core product line; revenue from sales of these profiles is the primary source of income. 2025 revenue was $19.6M, up from $14.1M in 2024.
• Special section tubes — Another key product category; contributes significantly to overall sales. The company's Chinese name and VIE name highlight this focus.
• Heavy industry technology — Through Beijing Haozhen, a 97% owned subsidiary, the company engages in heavy industry technology, potentially a growth area though its contribution is not separately disclosed.

Recent performance

For fiscal year 2025, revenue was $19.6M, up from $14.1M in 2024, reversing a prior decline from $21.7M in 2021. Net income for 2025 was $1.9M, compared to a net loss of $1.9M in 2024. Operating cash flow turned positive at $878,267 in 2025, versus a negative $414,034 in 2024. Diluted EPS for 2025 was $0.03, recovering from a loss of $0.15 in 2024. The balance sheet shows total assets of $72.2M and shareholder equity of $57.8M as of December 31, 2025.

Strategy

The company is focused on expanding its product portfolio in cold roll forming and special section tubes, leveraging its manufacturing base in Shandong, China. It is also investing in heavy industry technology through its Haozhen subsidiary, indicating diversification into higher-margin or advanced manufacturing segments. Management's stated direction includes improving operational efficiency and cash flow generation, as evidenced by the turnaround in 2025. The company continues to operate through its VIE structure, indicating reliance on its Chinese operating entities for all substantive business.

Risks

• VIE structure risk — The company's operations are conducted through a VIE in China, which carries legal and regulatory risks regarding the enforceability of contractual arrangements under PRC law.
• Customer concentration risk — The filing does not disclose customer concentration, but as a specialized steel products maker, dependence on a few key customers could expose revenue to volatility.
• Commodity price risk — Steel prices are volatile; changes in raw material costs can impact margins, which are not detailed in the provided excerpts.
• Regulatory and geopolitical risk — Operating in China subject to PRC laws and regulations, including export controls and trade policies, which could affect cross-border operations and US-listing status.

Outlook

Management has not provided explicit forward-looking guidance in the provided excerpts. The improvement in 2025 indicates a recovery in demand or cost structure. The company's focus on expanding heavy industry technology and maintaining positive cash flow suggests a continued emphasis on operational stability. Future performance will depend on steel market conditions and the successful execution of its diversification strategy.