Joyson Electronic Corp. has delivered a first-quarter earnings report that exceeded market expectations against the backdrop of a generally weak automotive industry. The company achieved double-digit growth in net profit against the trend, with net profit attributable to shareholders increasing by 18.11% year-on-year to RMB 402 million. New orders grew by 75% year-on-year to RMB 27.5 billion. Both CITIC Securities and Citi have provided positive assessments, noting that Joyson Electronics is upgrading from a traditional automotive parts manufacturer to a global technology platform, driven by solid profit recovery, breakthroughs in global orders, and the accelerated implementation of new businesses such as embodied AI, optical modules, and server power supplies.
Profit growth remained steady despite market headwinds, supported by continuous improvements in cost reduction, efficiency enhancement, and refined management. In the first quarter, Joyson Electronics reported revenue of RMB 13.815 billion, a year-on-year decrease of 5.2%, primarily due to the disposal of the weighing instrument business of its subsidiary, Xiangshan Co., which is no longer consolidated. Excluding this factor, core operations remained stable. The standout performance was on the profit side: net profit attributable to shareholders reached RMB 402 million, up 18.1% year-on-year, while non-GAAP net profit rose 13.2% to RMB 362 million, demonstrating steady growth during the industry's off-season.
The improvement in profitability stemmed from ongoing cost-cutting and efficiency initiatives alongside refined management. The company's overall gross margin remained stable, with the automotive safety business maintaining solid profitability and the automotive electronics segment in European and American markets showing continuous margin expansion. Only domestic cockpit hardware was slightly affected by memory cost fluctuations, with minimal overall impact. Expense control yielded significant results, with both sales and financial expense ratios declining year-on-year. The period expense ratio was controlled at 13.9%, directly translating cost optimization into incremental profits.
Simultaneously, the company increased its R&D investment, with R&D expenses rising to RMB 839 million, focusing on cutting-edge areas such as intelligent driving, robotics, and server power supplies, laying the technological foundation for long-term growth. Operating cash flow reached RMB 910 million, up 5.5% year-on-year, reflecting continued optimization of working capital management and a healthier financial foundation. Citi highlighted the company's improving global tax planning, with the effective tax rate steadily declining, indicating ongoing potential for future profit growth.
The company's order book remains robust, with key breakthroughs in intelligent driving and global supporting capabilities capturing opportunities in both domestic and international markets. In the first quarter, Joyson Electronics secured new project awards with a total lifecycle value of RMB 27.5 billion, providing strong support for performance growth over the next two to three years. Notably, the high-value-added intelligent driving business achieved significant breakthroughs, becoming a core highlight of the upgraded order structure.
In the intelligent driving sector, the company continues to optimize its product mix, with an increasing proportion of high-margin mid-to-high-end domain controllers. Overseas markets reached milestone progress, with intelligent collaborations established with several luxury automakers. Significant formal orders are expected to be secured intensively in the second quarter, with related products slated for mass production by mid-year. Domestically, the company secured smart cockpit contracts for overseas models from leading new energy vehicle manufacturers, deeply benefiting from the global expansion wave of Chinese autonomous brands.
Internationally, Joyson Electronics established a long-term strategic partnership with VinFast, focusing on deep supply cooperation for L2+ ADAS domain controllers and smart car keys, covering multiple main models. Customized development has been completed, with mass production and delivery scheduled for mid-year. As overseas automakers like Mercedes-Benz and Audi accelerate the adoption of urban NOA and cockpit large model features, the company's rapid response capability, supported by nearly half of its R&D personnel based in China, continues to secure major global intelligent orders, validating its global supporting capabilities.
A second growth curve is taking shape through ventures in robotics, optical modules, and server power supplies, opening long-term growth space. While consolidating its core automotive business, Joyson Electronics is actively expanding into emerging areas such as embodied AI, optical modules, and server power supplies, building a robust second growth curve and transitioning from an automotive Tier 1 supplier to a diversified technology platform encompassing automotive, robotics, optical communication, and server power supplies.
CITIC Securities stated that given Joyson Electronics' gradually improving product portfolio in intelligent driving and embodied AI, its enriched industrial cooperation ecosystem, and broad access to global customers, the company is well-positioned to benefit more fully from global development opportunities in emerging sectors.
Commercialization of embodied AI is accelerating. The company has established a comprehensive matrix of core robotic components, leveraging global factory scenarios for industrial training support and forming deep partnerships with leading robotics firms in North America and China. It has already conducted small-batch trial deliveries to a leading U.S. humanoid robot manufacturer, with mass production expected by mid-2026. Domestically, it secured orders for robotic domain controllers in the first quarter, accelerating cooperation and transitioning the robotics business from technological development to the realization phase.
The optical module business is emerging as a new growth engine. The company made a strategic investment in high-speed optical module firm New Feiguang, entering the global computing power supply chain. New Feiguang's clients include leading cloud giants such as Huawei, DeepSeek, Amazon, Microsoft, and Meta. It is steadily shipping 800G optical modules, rapidly expanding production capacity for 1.6T products, and concurrently developing 3.2T products. North American production capacity is set to commence operations by mid-year, precisely meeting overseas AI computing power demand. Additionally, the company collaborated with Zhongji Innolight to launch automotive optical communication solutions, achieving a dual layout in both automotive and computing power optical modules.
Furthermore, the company is extending products like PSU, HVDC, and solid-state transformers to industrial server power supplies and intelligent computing center scenarios, further broadening its growth boundaries. Institutions widely believe that these new businesses not only contribute incremental revenue but also restructure the company's valuation framework, unlocking long-term growth potential.
Currently, Joyson Electronics is in a phase of triple resonance, characterized by profit recovery, high growth in its core business, and the scaling of new ventures. Amid the major trends of automotive intelligence and the global expansion of Chinese autonomous brands, the company's global footprint and technological accumulation position it to continuously release performance and valuation elasticity, establishing itself as a high-quality player with long-term competitiveness in the automotive technology sector.
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