Key takeaway

In 2025, amidst sudden changes in the global economic and trade condition, the company stabilized its fundamentals and focused on overseas expansion and the Belt and Road initiative. In particular, businesses in the high-prosperity cycle continued to expand, including shipbuilding (continuous growth in orders and deliveries), diesel generator sets (exploring the vast Southeast Asian and European markets), and mass consumption (branding trend), driving the continuous improvement of the company's profit margin. The company has decades of foreign trade experience and leads the industry in multiple business areas, while FX rate fluctuations and geopolitical changes help demonstr

Event

In 2025, the company recorded operating revenue of RMB117.811bn, up 0.54% YoY. In 4Q25, revenue was RMB30.388bn, a YoY increase of 0.51%. Net profit attributable to the parent company in 2025 was RMB1.356bn, up 18.05% YoY, and net profit excluding non-recurring items was RMB1.242bn, up 19.23% YoY. In 4Q25, net profit attributable to the parent company was RMB252mn, up 71.08% YoY, while net profit excluding non-recurring items was RMB201mn, up 34.49% YoY.ate its resilience.

Brief analysis

Outstanding profit contribution from shipbuilding business, with abundant reserve orders. The company's New Dayang Shipbuilding focuses on the R&D and construction of medium-sized vessels. In 2025, the shipbuilding segment achieved a revenue of RMB7.85bn (+8.22%); GPM was 21.11% (+2.32 pcts), and Profit before taxation reached RMB1.418bn (+81.93%), while New Dayang Shipbuilding delivered 27 vessels throughout the year. Order backlogs stand at 85 vessels, with the production schedule extending to 1H29. Driven by higher order values and capacity release,the company's shipbuilding and shipping business has a clear growth path for the next few years.

Diesel generators embrace the era of computing power boom, The market size of domestic data center diesel generators grew by over 50% YoY. The company has years of experience in integrating the entire industry chain and deep accumulation of industry chain resources. It can seize the construction boom of domestic and overseas computing centers and data centers, maintaining strong business momentum. In 2025, the diesel generator segment achieved a revenue of RMB1.677bn (+41.56%), a GPM of 13.99% (+1.04pcts), and a profit before taxation of RMB159mn (+74.55%).

Overcome foreign trade fluctuations and achieve countertrend overseas expansion.

In 2025, the Sino-US trade dispute heated up. The company calmly responded with a customized strategy for each order, achieving a 23% countertrend growth in exports to the US. It also accelerated the expansion along the Belt and Road, achieving cumulative exports of USD4.18bn, up 35.7% YoY. Although since 2Q of last year, the RMB continues to appreciate, the company still achieved a 16.28% growth in the apparel business by leveraging its excellent brand premium capability (growth was only 6.61% in 1H25 due to short-term factors).

Continuously enhance shareholder return and maintain core strategic focus. Since its restructuring and listing in 2016, the company has paid cumulative dividends of RMB2.376bn, far exceeding the RMB1.5bn raised during the restructuring and listing, and has maintained a dividend payout ratio of over 40% for many years. Facing the complex and volatile external environment, the company upholds the principle of "navigating the headwinds, strengthening the fundamentals to expand innovation, and improving quality and efficiency". It is expected to continue leveraging its years of accumulated foreign trade experience and solid foundation in the industry chain to continuously improve performance.

Investment recommendation:We believe the company is gradually becoming an organizer and integrator of the global industry chain and supply chain. Its long-term strategy is clearly visible. We project the company's net profit attributable to shareholders for 2026–2028 to be RMB 1.493bn, RMB1.671bn, and RMB1.852bn, respectively. The current share price implies P/E ratios of 11x, 10x, and 9x, respectively.

Risks

1. The global economic environment becomes complex and volatile, and trade protectionism heats up: The US tariff measures against China may be a huge drag on exports to US customers. Trade protectionism and frictions heat up, which may impact the company's performance.

2. Geopolitical risks: The company's offshore financing business accounts for a large proportion. It has factories, offices and engineering project departments in certain offshore financing regions. Geopolitical tensions expose the company to security and operational risks.

3. FX rate fluctuation risk: The fluctuation of the RMB may impact the sales of the company's exported or imported products, and create uncertainty for the company's overseas business.

4. Risk of worse-than-expected development of business as competition heats up: In a challenging economic environment where market competition intensifies and model innovation accelerates, the company faces the risk that its business expansion in breadth and depth may fall short of expectations.