Full-year 2025 Performance Review: Revenue reached RMB 28.70 billion, a year-on-year increase of 15.2%. Net profit attributable to shareholders was RMB 4.09 billion, up 10.6% year-on-year. Non-GAAP net profit was RMB 3.90 billion, rising 20.9% compared to the previous year. By business segment: The rail transportation business generated revenue of RMB 15.80 billion, an increase of 8.0%. The emerging equipment business achieved revenue of RMB 12.78 billion, growing 26.4% year-on-year. Within this segment, revenue from basic components was RMB 5.36 billion, up 30.4%; revenue from new energy power generation was RMB 2.40 billion, increasing 17.9%; and revenue from automotive electric drives was RMB 3.27 billion, rising 27.2%. The annual gross profit margin improved by 0.95 percentage points to 33.4%, primarily due to changes in the revenue mix. The company maintains a healthy financial position with ample cash on hand, supporting business development and shareholder returns.
Rail transportation business showed stable growth, with positive prospects for the maintenance segment. Both passenger and freight volumes for the national railway system reached record highs in 2025, indicating robust demand for rail transport. Policies promoting the replacement of old locomotives are accelerating the phase-out of older diesel models, creating sustained incremental demand for new locomotives. The proportion of revenue from maintenance services increased in 2025. As railway investment shifts from new construction to managing existing assets, maintenance demands for both national railways and urban rail systems are expected to grow further. Additionally, the company continues to expand into new areas within rail transportation, with businesses like communication signals, autonomous driving, and door systems experiencing rapid revenue growth, potentially forming new growth drivers.
The new semiconductor plant is operating at full capacity, while new energy power generation and automotive electric drives show positive trends. The Yixing new plant reached full production capacity of 30,000 wafers per month by mid-2025, leading to rapid revenue growth. The Zhuzhou 8-inch silicon carbide production line achieved operational status by the end of 2025 and is expected to undergo a 1-2 year ramp-up period for capacity release. The New Energy Power Generation division, now operating independently, has achieved a modest profit. Leveraging business cooperation with CRRC and Zhuzhou Institute, the division is poised for further expansion in photovoltaic and energy storage PCS sectors. The automotive electric drive business collaborates with leading automakers, securing a position in the top tier. New customer breakthroughs, including Chery and SAIC, have led to a significant increase in deliveries.
Maintaining a Buy rating with a target price of HKD 57.0. Revenue for 2026-2028 is projected to be RMB 31.53 billion, RMB 35.44 billion, and RMB 39.73 billion, representing growth rates of 9.8%, 12.4%, and 12.1% respectively. Net profit is forecasted at RMB 4.54 billion, RMB 5.06 billion, and RMB 5.59 billion for the same period, with growth rates of 10.7%, 11.5%, and 10.5%. Based on a 2026 P/E multiple of 15, the target price is set at HKD 57.0, implying a 52% upside from the current price. Investors are advised to monitor new developments such as national railway tender processes and ultra-high voltage power grid construction.
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