Central China Securities: Machinery Sector Shows Upward Trend in Q3 2025 with Continued Profitability Improvement

Stock News11-14

Central China Securities released a research report indicating that the CITIC Machinery sector demonstrated steady growth in Q3 2025. Revenue increased by 5.98% year-on-year, while net profit attributable to shareholders rose by 12.91%, reflecting sustained profitability improvements. Traditional cyclical sub-sectors continued their recovery, while growth-oriented sub-sectors showed divergence, with some bottoming out and approaching an earnings inflection point. The report recommends balancing investments between cyclical and growth sub-sectors based on industry momentum.

Key highlights from Central China Securities' analysis include: - The CITIC Machinery sector achieved total revenue of RMB 1,888.843 billion in Q3 2025, up 5.98% YoY. - Net profit attributable to shareholders reached RMB 128.442 billion, growing 12.91% YoY, with adjusted net profit at RMB 109.875 billion, up 14.12% YoY. - Gross margin and net margin stood at 22.21% and 7.37%, respectively, up 0.36 and 1.83 percentage points compared to full-year 2024. - Weighted ROE improved to 6.52%, surpassing the 2024 annual level.

Sub-sector performance in Q3 2025: - Lithium battery equipment, shipbuilding, lifting & transport equipment, and service robotics saw adjusted net profit growth exceeding 50%. - Oil & gas equipment, laser processing equipment, nuclear power equipment, railway equipment, construction machinery, and basic components posted growth above 20%. - 3C equipment, boiler equipment, textile machinery, photovoltaic equipment, and industrial robotics lagged in growth.

Investment recommendations: 1. Focus on cyclical recovery sectors such as construction machinery, shipbuilding, oil & gas equipment, and lithium battery equipment, where earnings are improving. 2. Prioritize high-growth tech sub-sectors aligned with national strategies, including robotics, AI-supporting equipment, and core components.

Risk factors: - Slower-than-expected manufacturing investment growth. - Weak export demand. - Subdued downstream industry demand. - Rising raw material costs. - Major shifts in policies for new energy and semiconductors.

Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.

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