Results Review

3Q25 results in line with our expectations

Hichain Logistics announced its 3Q25 results: Revenue rose 15.70% YoY to Rmb502mn; attributable net profit rose 9.25% YoY to Rmb74mn, and recurring attributable net profit rose 8.56% YoY to Rmb69mn. In 1–3Q25, revenue rose 10.33% YoY to Rmb1.375bn; attributable net profit fell 6.26% YoY to Rmb204mn, and recurring attributable net profit rose 3.37% YoY to Rmb180mn, in line with our expectations.

Trends to watch

Consumer electronics industry continued to recover in 3Q25, showing solid growth. According to Omdia, global PC shipments grew 6.8% YoY to 72.4mn units in 3Q25, with Lenovo’s global shipments rising 17.4% YoY to 19.36mn units. The firm’s revenue from the consumer electronics business rose 8.0% YoY in 1H25. Despite disruptions from overseas tariffs, we think the firm should continue to benefit from the steady expansion of the consumer electronics industry driven by the development of AI, cloud computing, and new applications.

NEV business returned to growth; domestic NEV market has strong growth momentum in the long term. According to the firm’s 1H25 results, revenue from the new energy vehicle (NEV) business grew 5.4% YoY in 1H25. In particular, new customer S grew rapidly, and customer J and customer V showed large growth potential. Data from the China Association of Automobile Manufacturers (CAAM) shows that NEV sales volume in China rose 26.1% YoY and 10.3% QoQ to 4.261mn units in 3Q25. We believe the firm will continue to enhance its advantages in NEV production logistics.

Automation integration business to create a new growth driver. According to corporate filings, the firm’s semiconductor equipment and logistics automation segment successfully delivered several well-known customers’ projects in 1H25, and its products had leading performance. In 1–3Q25, the firm’s R&D expenses increased 34.5% YoY, and it established an AI research institute to enhance its technological innovation and delivery capabilities. We believe the automation integration business will become a growth bright spot.

Financials and valuation

We keep our 2025 and 2026 attributable net profit forecasts unchanged at Rmb322mn and Rmb357mn. The stock is trading at 17.4x 2025e and 15.7x 2026e P/E. Considering the growth potential of the firm’s semiconductor equipment and logistics automation segment and the rollover of valuation to 2026, we raise our target price 31% to Rmb27.85, implying 19.9x 2025e and 18.0x 2026e P/E and offering 14.8% upside. We maintain an OUTPERFORM rating.

Risks

Disappointing expansion of NEV business and/or orders for automation integration business.