Core Viewpoint - Haixing Electric is a leading global provider of smart grid solutions, with a comprehensive industrial chain and strong R&D capabilities, serving over 80 countries and regions worldwide [1] Group 1: Business Performance - For Q3 2025, Haixing Electric reported revenue of 3.369 billion yuan, ranking 2nd in the industry, surpassing the industry average of 1.144 billion yuan and the median of 582 million yuan [2] - The net profit for the same period was 730 million yuan, ranking 1st in the industry, exceeding the industry average of 230 million yuan and the median of 120 million yuan [2] - The main business composition includes product sales of 1.865 billion yuan, accounting for 94.42%, with other services contributing 59.585 million yuan (3.02%) and labor services 50.749 million yuan (2.57%) [2] Group 2: Financial Ratios - As of Q3 2025, Haixing Electric's debt-to-asset ratio was 24.69%, lower than the industry average of 30.70%, indicating strong solvency [3] - The gross profit margin was 39.89%, higher than the industry average of 34.67%, reflecting a competitive advantage in profitability [3] Group 3: Executive Compensation - The chairman, Zhou Liangzhang, received a salary of 1.3071 million yuan in 2024, an increase of 233,700 yuan from 2023 [4] - The general manager, Zhang Shiquan, had a salary of 1.7135 million yuan in 2024, a decrease of 67,100 yuan from the previous year [4] Group 4: Shareholder Information - As of September 30, 2025, the number of A-share shareholders decreased by 7.43% to 24,800, while the average number of circulating A-shares held per shareholder increased by 8.02% to 19,600 [5] - The sixth largest circulating shareholder is Hong Kong Central Clearing Limited, holding 8.2754 million shares, a decrease of 2.1501 million shares from the previous period [5] Group 5: Market Insights - According to Shenwan Hongyuan, Haixing Electric's revenue for the first three quarters of 2025 was 3.369 billion yuan, a year-on-year decrease of 1.19%, while net profit was 732 million yuan, down 7.48% year-on-year [6] - Q3 alone saw revenue and net profit increase by 25.12% and 30.21% year-on-year, respectively, indicating better-than-expected performance [6] - Key business highlights include the operational launch of the smart ultrasonic water meter factory in South Africa and successful bids for distribution products in Asia, Africa, and Latin America [6][7]

Investment Rating - The investment rating for the company is "Outperform" [1] Core Insights - The company reported a revenue of 3.369 billion yuan for the first three quarters of 2025, a year-on-year decrease of 1.19%, while the net profit attributable to the parent company was 732 million yuan, down 7.48%. However, in Q3 2025, the company achieved a revenue of 1.445 billion yuan and a net profit of 336 million yuan, representing year-on-year increases of 25.12% and 30.21% respectively. This performance exceeded expectations, primarily due to the revenue growth from smart water meters, new energy business, and distribution business, indicating the second growth curve is on the rise [1][10]. Financial Data and Profit Forecast - Total revenue for 2025 is projected at 5.021 billion yuan, with a year-on-year growth rate of 6.4%. The net profit attributable to the parent company is expected to be 870 million yuan, reflecting a decrease of 13.1% year-on-year. The earnings per share (EPS) is forecasted to be 1.79 yuan [3][11]. - The gross profit margin is expected to stabilize at 43.9% from 2025 to 2027, while the return on equity (ROE) is projected to improve from 10.9% in 2025 to 12.1% in 2027 [3][11]. Business Expansion and Strategic Developments - The company is actively expanding its smart power distribution business both domestically and internationally. The South African smart ultrasonic water meter factory has commenced operations, marking a significant step in localizing its smart water business in Africa. Additionally, the company has secured large-scale bids for its self-owned distribution network products in Asia, Africa, and Latin America, and has successfully won transformer orders in Central Asia and Africa [10]. - The launch of the "Orca" platform 10.0 version, which integrates edge computing, artificial intelligence, and digital technology, has significantly enhanced system performance and competitiveness in overseas solutions, showcasing the company's technological leadership in the smart grid sector [10]. Shareholder Returns - The company has maintained a consistent dividend policy, with a total cash dividend of 338 million yuan for the 2024 annual profit distribution, continuing a nine-year streak of cash dividends since 2016, totaling approximately 2.306 billion yuan. Furthermore, a share repurchase plan has been initiated, with a planned repurchase amount of 100 to 200 million yuan, reflecting a strong commitment to shareholder value and prudent capital management [10].

Investment Rating - The investment rating for the company is "Outperform" [1] Core Insights - The company reported a revenue of 3.369 billion yuan for the first three quarters of 2025, a year-on-year decrease of 1.19%, and a net profit attributable to shareholders of 732 million yuan, down 7.48%. However, in Q3 2025, the company achieved a revenue of 1.445 billion yuan and a net profit of 336 million yuan, representing year-on-year increases of 25.12% and 30.21% respectively, indicating a recovery in performance driven by the growth in smart water meters, new energy, and distribution businesses [1][10] - The company has expanded its smart power distribution business both domestically and internationally, with significant developments in its new energy business. The South African smart ultrasonic water meter factory has commenced operations, marking a key step in localizing its smart water business in Africa. The company has also secured large-scale bids for its self-owned distribution network products in Asia, Africa, and Latin America, and has launched the "Orca" platform 10.0, enhancing its competitiveness in the smart grid sector [10] - The company has a strong commitment to shareholder returns, having distributed a total cash dividend of 338 million yuan for the 2024 annual profit distribution plan, continuing a nine-year streak of cash dividends since 2016, totaling approximately 2.306 billion yuan. Additionally, a share repurchase plan has been initiated, with a planned repurchase amount of 100 to 200 million yuan [10] - The company's earnings forecast for 2025-2027 is set at 870 million, 1.027 billion, and 1.243 billion yuan respectively, with the current stock price corresponding to a PE ratio of 18, 15, and 12 for 2025-2027. The company maintains a positive outlook on the synergy between its power distribution and new energy businesses, which is expected to enhance profitability in the medium to long term [10][11] Financial Data and Profit Forecast - Total revenue for 2025 is projected at 5.021 billion yuan, with a year-on-year growth rate of 6.4%. The net profit attributable to shareholders is expected to be 870 million yuan, reflecting a year-on-year decrease of 13.1%. The earnings per share are forecasted to be 1.79 yuan [3][11] - The gross profit margin is expected to stabilize at 43.9% from 2025 to 2027, while the return on equity (ROE) is projected to increase from 10.9% in 2025 to 12.1% in 2027 [3][11]

Core Viewpoint - The article discusses the performance and strategic positioning of HaiXing Electric Power, highlighting its challenges in the domestic market and opportunities in the international market, particularly in smart electricity meters and related solutions [3][14][17]. Group 1: Financial Performance - In the first half of 2025, the company's revenue was 1.924 billion yuan, a year-on-year decrease of 14.7% [3]. - The net profit attributable to the parent company, excluding non-recurring gains and losses, fell by 28.1% year-on-year [5]. - The gross profit margin remained high at 41.6%, down 2.3 percentage points from the full year of 2024 [6]. - Financial expenses reached 136 million yuan, with foreign exchange gains and losses contributing over 84 million yuan [10]. - The company reported over 40 million yuan in investment income [12]. Group 2: Product and Market Segmentation - HaiXing Electric Power's products are divided into two main categories: smart power distribution products and systems, and new energy products and system integration [13]. - The domestic market for smart meters is maturing, with limited growth potential due to high penetration rates and changing replacement cycles [14][15]. - The company is focusing on exports as a key growth strategy, leveraging global market opportunities [16]. Group 3: International Market Opportunities - Global investment in grid modernization is projected to grow significantly, with an annual growth rate of 12% from 2022 to 2030 [17]. - Many emerging markets have low penetration rates for smart meters, presenting opportunities for expansion [17]. - HaiXing Electric Power's overseas business has shifted from merely selling meters to providing system software and solutions, with this segment accounting for about 60% of its overseas smart electricity business revenue [18]. Group 4: Competitive Positioning - The company's gross profit margin is higher than that of its peers, with a margin of 43.9% compared to 34.8% for Samsung Medical's smart power distribution business [20][21]. - HaiXing Electric Power maintains a light asset structure, with 54% of its assets being cash-like [22]. - The company has a low interest-bearing debt ratio of only 3.1% [23]. - The dividend payout ratio decreased from around 50% to 34% in 2024 [26].

Core Viewpoint - The report highlights that Haixing Electric's performance in the first half of 2025 fell short of expectations due to increased counter-cyclical investments and industry cycle impacts, leading to a decline in both revenue and net profit [2][4]. Financial Summary - Haixing Electric reported a total revenue of 1.92 billion yuan for the first half of 2025, representing a year-on-year decrease of 14.7% [2]. - The net profit attributable to shareholders was 400 million yuan, down 25.7% year-on-year [2]. - The comprehensive gross margin for the first half of 2025 was 41.56%, a decrease of 2.64% compared to the same period last year [2]. - The period expense ratio increased to 17.58%, up 0.57% from the previous year [2]. Business Development - The company is actively participating in domestic and overseas markets, securing significant contracts such as 140 million yuan from the State Grid and 49.9 million yuan from Southern Power Grid [3]. - Haixing Electric is expanding its marketing channels in key countries and new markets, with the launch of the "Orca" platform and the commencement of operations at a smart ultrasonic water meter factory in South Africa [3]. - The company aims for multi-market and multi-category collaborative development while consolidating its domestic base and expanding overseas [3]. Competitive Advantage - Haixing Electric focuses on providing comprehensive solutions and localized strategies, enhancing its brand competitiveness [4]. - The company has achieved a revenue share of approximately 60% from system software and solutions in its overseas smart electricity business in 2024 [4]. - By leveraging product and service capabilities, Haixing Electric has established deep customer relationships and built a competitive brand advantage [4]. Profit Forecast and Investment Rating - The projected net profits for Haixing Electric from 2025 to 2027 are 1.023 billion yuan, 1.188 billion yuan, and 1.387 billion yuan, respectively, with corresponding EPS of 2.10, 2.44, and 2.85 yuan [4]. - The current stock price corresponds to PE ratios of 13, 11, and 10 times for 2025 to 2027 [4]. - The report maintains a "strong buy" rating for the company [4].

Investment Rating - The report maintains an "Outperform" rating for the company [2] Core Views - The company's performance in the first half of 2025 showed a revenue of 1.924 billion yuan, a year-on-year decrease of 14.67%, and a net profit of 396 million yuan, down 25.74% year-on-year, primarily due to project delays in the domestic market, fluctuations in demand from certain overseas countries, and increased expenses from proactive counter-cyclical investments [7][10] - The company is actively expanding its smart power distribution business both domestically and internationally, with significant achievements in Africa and other regions, including the launch of a new version of its "Orca" platform, enhancing its competitive edge in the smart grid sector [10] - The company has a strong commitment to shareholder returns, having distributed a total cash dividend of 338 million yuan in 2024 and initiating a share buyback plan of 100 to 200 million yuan [10] Financial Data and Profit Forecast - The company is projected to achieve total revenue of 5.021 billion yuan in 2025, with a year-on-year growth rate of 6.4%, and a net profit of 870 million yuan, reflecting a decrease of 13.1% [9] - The earnings per share (EPS) is expected to be 1.79 yuan in 2025, with a gross margin of 43.9% and a return on equity (ROE) of 10.9% [9] - The company's price-to-earnings (PE) ratio for 2025 is estimated at 16 times, with a historical PE (TTM) of 15.69 times, indicating a favorable valuation compared to historical levels [10]

Investment Rating - The investment rating for the company is "Outperform the Market" (maintained) [2][7][8] Core Views - The company reported a revenue of 1.924 billion yuan for the first half of 2025, a year-on-year decrease of 15%, and a net profit attributable to shareholders of 396 million yuan, down 26% year-on-year. The gross margin was 41.6%, down 2.6 percentage points, and the net margin was 20.5%, down 3.1 percentage points [3][5] - The company has made significant progress in its overseas expansion, including the launch of a smart ultrasonic water meter factory in South Africa and successful bids for distribution products in Asia, Africa, and Latin America [5][6] - Domestic business remains stable with over 400 million yuan in orders secured in the first half of the year, including significant wins in power metering and distribution equipment [6] - The company is investing in new energy solutions, having developed key equipment and systems for microgrid solutions, with successful bids in Africa and Latin America [6] Financial Summary - The company expects net profits for 2025-2027 to be 1.016 billion, 1.165 billion, and 1.3 billion yuan respectively, with year-on-year growth rates of 1.4%, 14.7%, and 11.7% [3][7] - Earnings per share (EPS) are projected to be 2.09, 2.40, and 2.68 yuan for the same period, with corresponding valuations of 13.4, 11.6, and 10.4 times [3][7] - The company reported a second-quarter revenue of 1.14 billion yuan, a year-on-year decrease of 15% but a quarter-on-quarter increase of 45%, with a net profit of 255 million yuan, down 20% year-on-year but up 81% quarter-on-quarter [5]

Investment Rating - The report maintains a "Buy" rating for the company, indicating an expected price increase of over 15% in the next 6-12 months [5]. Core Insights - The company reported a total revenue of 1.92 billion RMB for the first half of 2025, a year-on-year decrease of 14.7%, and a net profit attributable to shareholders of 400 million RMB, down 25.7% year-on-year [2]. - The decline in revenue and profit is attributed to delays in domestic project execution, fluctuations in demand in certain overseas markets, and increased counter-cyclical investments leading to higher expenses [2]. - The company is a leader in the global smart meter market, with significant growth potential in smart distribution and renewable energy sectors, benefiting from the global upgrade of power grids [5]. Summary by Sections Performance Review - In Q2 2025, the company achieved total revenue of 1.14 billion RMB, a decrease of 15.8% year-on-year, with a net profit of 250 million RMB, down 20.2% [2]. Operational Analysis - The company is deepening its overseas strategic layout while maintaining a solid domestic base. In overseas markets, it has launched a smart ultrasonic water meter factory in South Africa and secured transformer orders in Central Asia and Africa [3]. - Domestically, the company has won over 400 million RMB in new orders, including significant contracts for power metering products and distribution equipment [3]. New Energy Business - The company is transitioning from product sales to system integration and scenario-based solutions in the renewable energy sector, having developed key equipment and EMS systems for microgrid projects in Africa and Latin America [3]. Investment in Sales and R&D - The company has increased its sales and R&D expenses by 11.6% and 6.1% year-on-year, respectively, highlighting its commitment to market expansion and technological innovation [4]. Profit Forecast and Valuation - The company is expected to achieve net profits of 1.04 billion RMB, 1.16 billion RMB, and 1.38 billion RMB for the years 2025, 2026, and 2027, respectively, with growth rates of 3%, 12%, and 19% [5]. - The current stock price corresponds to a PE valuation of 13, 11, and 10 times for the years 2025, 2026, and 2027 [5].