Xin Lang Cai Jing·2025-10-29 00:38Core Viewpoint - The company reported a steady revenue growth in Q3 2025, driven by the automotive cable business, despite pressure on gross margins from rising copper prices [1][2]. Financial Performance - For the first three quarters of 2025, the company achieved a revenue of 2.854 billion yuan, representing a year-on-year increase of 11.1%. The net profit attributable to shareholders was 138 million yuan, up 5.0% year-on-year, while the net profit excluding non-recurring items was 132 million yuan, reflecting a 2.4% increase [1]. - In Q3 2025, the company reported a revenue of 1.024 billion yuan, with a quarter-on-quarter increase of 11.4% and a year-on-year increase of 8.2%. The net profit attributable to shareholders was 46 million yuan, showing a quarter-on-quarter increase of 13.3% and a year-on-year increase of 18.7%. The net profit excluding non-recurring items was 40 million yuan, with a quarter-on-quarter decrease of 1.4% and a year-on-year decrease of 8.2% [1]. Industry Trends - The automotive industry, as reported by the China Association of Automobile Manufacturers, saw a wholesale sales increase of 13% quarter-on-quarter and 7% year-on-year, reaching 7.52 million vehicles in Q3 2025. The company's automotive cable revenue grew in line with this industry trend [2]. - The company's gross margin in Q3 2025 decreased by 0.6 percentage points quarter-on-quarter and 0.4 percentage points year-on-year to 11.8%, primarily due to the high prices of copper, a key raw material [2]. Expense Management and Capital Expenditure - The company improved its expense ratios in Q3 2025, with sales, management, and R&D expense ratios at 0.4%, 1.7%, and 2.4%, respectively, showing year-on-year decreases of 0.1 percentage points, 0.3 percentage points, and 1.1 percentage points, as well as quarter-on-quarter decreases of 0.2 percentage points, 0.6 percentage points, and 0.2 percentage points [2]. - Capital expenditures reached a historical high of 340 million yuan in Q3 2025, driven by the company's efforts to expand production capacity domestically and internationally [2]. Strategic Initiatives - The company is advancing its layout in emerging businesses such as humanoid robot cables, high-frequency and high-speed cables, and low-altitude flying vehicle cables. It is enhancing its high-speed and high-frequency copper cable production capacity in Mexico to meet the demands of North American data centers, cloud computing, and 5G base stations [3]. - The company is increasing resource investment in the humanoid robot business, aiming for growth through both internal development and external collaboration [3]. Profit Forecast and Valuation - The company maintains its profit forecasts for 2025 and 2026, projecting net profits attributable to shareholders of 240 million yuan and 270 million yuan, respectively. The current stock price corresponds to P/E ratios of 39.7 and 34.7 for 2025 and 2026 [3]. - The target price has been raised by 10.5% to 52.75 yuan, reflecting P/E ratios of 42.1 and 36.8 for 2025 and 2026, indicating a potential upside of 5.9% from the current stock price [3].