Summary of Jingsheng Mechanical & Electrical Co 3Q25 Earnings Call Company Overview - **Company**: Jingsheng Mechanical & Electrical Co (300316.SZ) - **Industry**: China Industrials - **Market Cap**: Rmb 55,105 million - **Stock Rating**: Underweight - **Price Target**: Rmb 19.00, representing a downside of 55% from the current price of Rmb 42.08 as of October 24, 2025 Key Financial Results - **3Q25 Revenue**: Rmb 2,474 million, down 43% YoY [6] - **Cost of Goods Sold**: Rmb (1,752) million, down 40% YoY [2] - **Gross Profit**: Rmb 723 million, down 48% YoY [2] - **Operating Profit**: Rmb 251 million, down 72% YoY [2] - **Profit Before Tax**: Rmb 299 million, down 69% YoY [2] - **Profit After Tax**: Rmb 245 million, down 71% YoY [2] - **Net Profit Margin**: 10.6%, down 9.3 percentage points YoY [2] - **Earnings Per Share (EPS)**: Rmb 0.20, down 70% YoY [2] Margins and Expenses - **Gross Profit Margin**: 29.2%, down 3.0 percentage points YoY but up 9 percentage points QoQ [6] - **R&D Expenses**: Rmb (208) million, down 19% YoY [2] - **Selling Expenses**: Increased by 27% YoY [2] - **Asset/Credit Impairment**: Rmb (102) million, a significant increase of 103% YoY [2] Industry Context - The company continues to face challenges from the solar equipment and materials sector, which is in a downcycle [6] - Contract liabilities decreased by 55% YoY, slightly improved from a 62% decline at the end of 2Q25 [6] Analyst Insights - The financial results were largely in line with consensus expectations, indicating a stable outlook despite the significant YoY declines [1][6] - The company is expected to face ongoing pressure from gross margin due to high exposure to materials and low downstream solar product prices [7] Risks and Opportunities - **Upside Risks**: Faster-than-expected upgrades in crystal growing furnace technology and higher product sales in materials [9] - **Downside Risks**: Slower upgrades in technology and lower competitiveness of new products in the semi and SiC segments [9] Conclusion - Jingsheng Mechanical & Electrical Co's 3Q25 results reflect significant challenges in the current market environment, particularly within the solar sector. The company is rated underweight, with a substantial downside to the price target, indicating cautious sentiment among analysts.