XUSHENG(SH:603305)2025-11-03 02:36Summary of Ningbo Xusheng Group Co Ltd 3Q25 Earnings Call Company Overview - Company: Ningbo Xusheng Group Co Ltd - Industry: China Autos & Shared Mobility - Date of Earnings Call: October 30, 2025 Key Financial Highlights - 3Q25 Earnings: Increased by 70% YoY to Rmb99 million, primarily due to: - Gross margin improvement (+3.7 percentage points YoY) - Lesser impairment loss - Additional investment gains [1][2] - Revenue: Remained flat YoY at Rmb1,130 million, with an 8% QoQ increase [3] - Gross Profit: Increased by 21% YoY to Rmb242 million [3] - Operating Profit: Grew by 21% YoY to Rmb125 million [3] - Net Profit: Increased by 70% YoY, but decreased by 6% QoQ [3] - Recurring Net Profit: Rose by 96% YoY to Rmb91 million [3] - Earnings Per Share (EPS): Decreased by 9% QoQ to Rmb0.10, but increased by 43% YoY [3] - Gross Margin: 21.5%, down 1.3 percentage points QoQ but up 3.7 percentage points YoY [3] Margin Analysis - QoQ Gross Margin Decline: Despite revenue growth, gross margin declined by 1.3 percentage points, indicating potential concerns regarding sustainability of margin improvements from energy storage systems (ESS) and material cost trends [2] Strategic Focus Areas - Key Focus Areas for Future Growth: 1. Winning new ESS projects 2. Securing new orders for factories in Mexico and Thailand 3. Progress in humanoid robotics [2] Market Position and Valuation - Stock Rating: Equal-weight - Price Target: Rmb12.00, indicating an 18% downside from the current price of Rmb14.71 [5] - Market Capitalization: Approximately Rmb13.73 billion [5] - 52-Week Price Range: Rmb20.30 - Rmb9.96 [5] Risks and Opportunities - Upside Risks: - New project wins in humanoid robots - Higher value content per vehicle from product coverage expansion - Margin expansion from falling aluminum alloy costs [11] - Downside Risks: - Weaker-than-expected demand from Tesla - Margin contraction due to intensifying competition - Rising aluminum alloy costs [11] Conclusion Ningbo Xusheng Group Co Ltd demonstrated strong year-over-year earnings growth in 3Q25, driven by improved gross margins and investment gains. However, the company faces challenges in maintaining margin sustainability and navigating competitive pressures in the automotive sector. Future growth will depend on strategic project wins and cost management.