ZTT(SH:600522)2025-10-28 15:31Summary of Zhongtian Technology's Q3 2025 Earnings Call Company Overview - Company: Zhongtian Technology - Date of Call: Q3 2025 Key Financial Performance - Net Profit: Q3 net profit decreased by 9% year-on-year to 770 million RMB, while cumulative net profit for the first three quarters increased by approximately 1% to 2.338 billion RMB [2][3] - Operating Cash Flow: Positive operating cash flow of over 400 million RMB for the first three quarters, with a single-quarter cash flow of 2.2 billion RMB in Q3 [2][3] - Revenue: Q3 revenue reached 14.4 billion RMB, an 11% year-on-year increase, with cumulative revenue for the first three quarters at 38 billion RMB, up about 10% [3] Revenue Contribution by Segment - Power Segment: Contributed nearly 40% of profits [2][4] - Marine Segment: Accounted for approximately 35% of profits [2][4] - Communication Segment: Contributed over 20% of profits [2][4] - Gross Margin by Product: - 35 kV and below: ~25% - 220 kV: 35%-40% - 330 kV: >40% - 500 kV: ~50% [4][5] Inventory and Project Delivery - Inventory Increase: Inventory rose due to incomplete project deliveries and pre-holiday stocking, expected to be delivered in Q4 [2][7] - Project Delivery Timeline: Most of the 32 projects will be completed this year, with significant projects like San Mountain Island and Red Bay expected to deliver in Q1 2026 [2][11] Order Backlog and Future Expectations - Marine Energy Orders: As of late October, total marine energy orders amounted to approximately 13 billion RMB, with over 10 billion RMB in submarine cable orders [2][9] - High Voltage Orders: 500 kV orders are about 3 billion RMB, while 220 kV and 330 kV orders total around 4.4 billion RMB, making up over 40% of total orders [2][10] - International Market Outlook: Major international projects (De Electric and Woxu) are expected to enter a dense delivery phase next year, with a total scale of about 3 billion RMB [2][15] Market Trends and Future Projections - Fiber Optic Demand: Driven by AI data centers, demand for ordinary fiber optic cables has increased, with prices rising nearly 10% quarter-on-quarter [2][20] - Multi-mode Fiber: Supply is tight, and prices are increasing, with significant growth in special fiber applications in the European market [2][21][22] - New Energy Orders: Q3 new energy orders reached 2.5 billion RMB, primarily in large storage systems, with margins around 11%-12% [2][19] Other Notable Points - Fair Value Loss: A fair value loss of 200 million RMB was recorded due to the disposal of financial assets, including shares in Jiangsu Bank, but had a minimal impact on overall profit [2][8] - Financial Expenses: Increased financial expenses were attributed to fluctuations in USD asset exchange rates and lower returns from certain financial products [2][17]