JPMorgan has issued a research report raising its forecasts for CRRC (01766, 601766.SH) and TIMES ELECTRIC (03898, 688187.SH), reflecting a more optimistic outlook based on strong third-quarter order acquisition, improved demand visibility, and the industry's shift toward cyclical growth drivers. JPMorgan maintains "Overweight" ratings for both CRRC and TIMES ELECTRIC.

CRRC's H-share target price has been raised from HK$6.8 to HK$8.0, while its A-share target price has been lowered from RMB 10.1 to RMB 10.0. TIMES ELECTRIC's H-share target price has been increased from HK$43 to HK$50, and its A-share target price has been raised from RMB 59 to RMB 68.

Since July, CRRC and TIMES ELECTRIC's H-shares have averaged approximately 30% gains (compared to the Hang Seng China Enterprises Index's 10% rise), while their A-shares have averaged 15% increases (compared to the CSI 300 Index's 18% rise), as investors recognize the continued improvement in industry fundamentals.

JPMorgan's updated model assumes approximately 15% compound annual earnings growth for both companies over the next three years, supported by a more balanced mix of new manufacturing, replacement, and aftermarket demand.

This upgrade is supported by a series of positive catalysts, including CRRC's solid financial performance, robust railway fixed asset investment (cumulative eight-month year-over-year growth of 6%), and accelerating passenger traffic growth (7% year-over-year increase during peak summer travel period). These factors are translating into healthier order backlogs and more predictable earnings profiles.

Both companies maintain net cash positions with strong operating cash flow generation capabilities, and their valuations remain below long-term cyclical medians, providing a solid foundation for further upside potential.