Summary of the Conference Call for Times Electric (2025) Company Overview - **Company**: Times Electric - **Period**: First three quarters of 2025 - **Revenue**: 18.83 billion CNY, up 14.86% YoY - **Net Profit**: 2.72 billion CNY, up 10.85% YoY - **Core Business Areas**: Rail transit equipment, emerging equipment, and basic components Key Financial Highlights - **Rail Transit Equipment Revenue**: 10.30 billion CNY, up 9.23% YoY [2][5] - **Emerging Equipment Revenue**: 8.43 billion CNY, up 22.26% YoY [2][5] - **Basic Components Revenue**: 3.84 billion CNY, up 30.40% YoY [2][5] - **Comprehensive Gross Margin**: Increased by 3 percentage points YoY [2][6] - **R&D Investment**: 1.97 billion CNY, up 22% YoY [2][7] - **Operating Expenses**: Decreased to 4% of revenue [2][6] Business Segment Performance - **Power Semiconductor Revenue**: 3.9 billion CNY, up 23% YoY, but profit margin slightly declined [2][9] - **New Energy Vehicle Drive System**: Cumulative delivery of 430,000 sets, revenue of 1.8 billion CNY, up 9% YoY, but overall business incurred losses [2][20] - **High Voltage IGBT Revenue**: Increased by 63%, with a market share of approximately 50% [2][28][30] Market and Strategic Developments - **Market Expansion**: Entered supply chains of major automakers including Volkswagen, Toyota, and General Motors, with over 14 partnerships [2][10] - **Silicon Carbide Production Line**: Actively developing domestic and international customers, applicable in new energy vehicles and photovoltaic fields [2][11][12] - **New Energy Generation**: Secured over 15 GW in photovoltaic contracts, ranking third domestically, and actively expanding overseas [2][22][26] Challenges and Outlook - **Inventory Growth**: Primarily due to lower turnover rates in the emerging equipment sector compared to rail transit [2][15] - **Profitability Decline**: Notable decrease in net profit in Q3 attributed to semiconductor price drops [2][24] - **Future Revenue Growth**: Uncertainty in Q4 revenue growth due to pending settlements in rail transit [2][15] Additional Insights - **Government Subsidies**: Revenue from government subsidies is influenced by the broader economic environment [2][18] - **High Voltage IGBT Market**: Anticipated growth driven by domestic and international projects, with stable competition [2][28][30] - **Data Center Opportunities**: Exploring high voltage and high power semiconductor markets, with ongoing discussions [2][27] This summary encapsulates the key points from the conference call, highlighting the financial performance, business segment developments, market strategies, challenges, and future outlook for Times Electric.

Core Viewpoint - The company reported its 1H25 performance, which met market expectations with a revenue of 12.214 billion yuan, a year-on-year increase of 17.95%, and a net profit attributable to shareholders of 1.672 billion yuan, up 12.93% year-on-year [1] Financial Performance - 1H25 revenue reached 12.214 billion yuan, with a net profit of 1.672 billion yuan and a non-recurring net profit of 1.588 billion yuan, showing a year-on-year increase of 37.04% [1] - In 2Q25, the company achieved a revenue of 7.677 billion yuan, a year-on-year increase of 19.88%, and a net profit of 1.040 billion yuan, up 12.63% year-on-year [1] - The gross margin improved significantly in 2Q25, reaching 31.13%, an increase of 4.78 percentage points year-on-year, primarily due to the improvement in the gross margin of rail transit equipment and emerging equipment businesses [1] - Operating cash flow was 1.825 billion yuan, reflecting a year-on-year increase of 58.33% [1] Segment Performance - Rail transit equipment business generated revenue of 6.910 billion yuan in 1H25, a year-on-year increase of 12.58%, with the electrical equipment segment contributing 5.515 billion yuan, up 11.48% [2] - Emerging equipment business revenue was 5.244 billion yuan, a year-on-year increase of 25.88%, with significant growth in new energy generation revenue, which rose by 42.94% to 1.047 billion yuan [2] - The company is advancing its power semiconductor projects and has received its first EROV order in the marine engineering equipment sector [2] Profit Forecast and Valuation - The company maintains its profit forecasts for 2025 and 2026, with the current stock price corresponding to 11.4 times and 10.3 times the earnings for 2025 and 2026, respectively [3] - The target price has been raised by 20.4% to 44.00 HKD, reflecting a potential upside of 12.6% from the current stock price [3]