FIRST SHANGHAI has reiterated its "Buy" rating on TIMES ELECTRIC (03898), setting a target price of HK$55. The firm projects the company's revenue for 2025–2027 to reach RMB27.8 billion, RMB30.9 billion, and RMB34.6 billion, with growth rates of 11.7%, 11.1%, and 12.0%, respectively. Net profits are expected to be RMB4.10 billion, RMB4.58 billion, and RMB5.06 billion, growing at 10.7%, 11.8%, and 10.4% year-on-year.
Key highlights from FIRST SHANGHAI's analysis include: - **Steady Performance in Q1–Q3 2025**: Revenue reached RMB18.83 billion, up 14.9% YoY, while net profit attributable to shareholders rose 10.9% YoY to RMB2.72 billion. Adjusted net profit surged 30.9% YoY to RMB2.61 billion. - **Segment Breakdown**: - **Rail Transportation**: Revenue grew 9.2% YoY to RMB10.31 billion. - **Emerging Equipment**: Revenue jumped 22.3% YoY to RMB8.43 billion, driven by strong growth in core components (up 30.4% to RMB3.84 billion), new energy power generation (up 25.3% to RMB1.59 billion), and automotive electric drives (up 9.3% to RMB1.87 billion). - **Gross Margin Expansion**: The company's overall gross margin improved by 3.1 percentage points to 32.4%, attributed to favorable revenue mix shifts.
**Rail Transportation Business**: - Stable growth supported by higher-than-expected EMU tenders in 2025, driven by record-high passenger volumes. - Replacement policies for outdated locomotives are fueling incremental demand. - Maintenance services accounted for ~22% of rail revenue in Q1–Q3 2025, with robust growth expected in national and urban rail maintenance demand. - Expansion into new segments like communication signaling and other rail equipment is poised to create additional growth drivers.
**Semiconductor & New Energy**: - Yixing’s new semiconductor plant reached full capacity of 30,000 wafers/month by mid-2025, driving rapid revenue growth. - Zhuzhou’s 8-inch silicon carbide production line is progressing, with full operation expected by end-2025. - The new energy power generation division, now independently operated, has turned profitable and aims to expand in solar and energy storage PCS through partnerships with CRRC and Zhuzhou Institute. - Automotive electric drives maintain a leading position, with new client breakthroughs including Chery and SAIC, leading to significant delivery growth in Q3 2025.