Times Electric 2025 Annual Report Analysis: Revenue increased by 15.23% to 28.703 billion yuan, and net profit excluding non-recurring gains and losses surged by 20.91%

Core Revenue and Profitability Indicators Analysis

Operating Revenue: Steady Growth Driven by Two Business Segments

In 2025, the company achieved operating revenue of CNY 28.703 billion, up 15.23% year over year. It was mainly driven by two major segments: rail transit and emerging equipment:

• The rail transit segment generated revenue of CNY 15.806 billion, up 7.99% year over year. Within this, the rail transit electrical equipment segment recorded revenue of CNY 12.106 billion, up 10.15% year over year. The rail transit engineering machinery and communication signaling systems segments achieved CNY 1.899 billion and CNY 1.149 billion, respectively, maintaining a stable trend.
• The emerging equipment segment delivered strong performance, with revenue of CNY 12.780 billion, up 26.35% year over year. Of this, the semiconductor segment generated revenue of CNY 5.360 billion, up 30.43%; the automotive segment recorded revenue of CNY 3.268 billion, up 27.22%; and the new energy, ocean, and industrial segments achieved CNY 2.401 billion, CNY 1.030 billion, and CNY 0.721 billion, respectively, with year-over-year growth rates of 17.93%, 19.11%, and 34.61%, respectively.

Net Profit and Non-GAAP Net Profit: Marked Improvement in Profit Quality

• Net Profit: In 2025, net profit attributable to shareholders of listed companies was CNY 4.097 billion, up 10.64% year over year, mainly benefiting from the increase in gross profit driven by operating revenue growth.
• Non-GAAP Net Profit: Net profit attributable to shareholders of listed companies excluding non-recurring profit and loss was CNY 3.899 billion, up significantly by 20.91% year over year, far exceeding the growth rate of net profit. This indicates that the profitability quality of the company’s core business has continued to improve. Non-recurring profit and loss mainly includes government grants, fair value changes in financial assets, and related gains/losses. In 2025, total non-recurring profit and loss was CNY 0.197 billion, a significant decrease from CNY 0.477 billion in 2024.

Earnings Per Share: Profitability Improves in Tandem

• Basic EPS: CNY 2.99/share, up 14.12% year over year;
• Non-GAAP EPS: CNY 2.85/share, up 25.00% year over year. This matches the growth rate of non-GAAP net profit and reflects a significant strengthening of the company’s per-share earnings power in its core business.

Expense Structure: In-Depth Breakdown

Selling Expenses: Essentially Flat, Stable Management

In 2025, selling expenses were CNY 0.587 billion, down slightly by 0.38% year over year. This was basically in line with the prior year, indicating that the company’s ability to control selling expenses is stable and that selling expenses did not increase significantly along with revenue growth.

Administrative Expenses: Slight Increase, Payroll Is the Main Driver

Administrative expenses were CNY 1.227 billion, up 4.97% year over year, mainly due to an increase in payroll for administrative staff. As the company’s scale expanded and personnel compensation was adjusted, administrative expenses rose slightly.

Finance Costs: Net Gains Expand, Interest and FX Gains Rise

Finance costs were net gains of CNY 0.281 billion. In the same period last year, they were net gains of CNY 0.146 billion. This was mainly due to growth in interest income and foreign exchange gains. Interest income was CNY 0.305 billion, up 7.10% year over year; foreign exchange gains increased further, enhancing net finance gains.

R&D Expenses: Continued High Investment, Supporting Technological Leadership

R&D expenses were CNY 3.011 billion, up 13.35% year over year, mainly due to increases in R&D labor costs and R&D material consumption. The company’s total R&D investment for the full year was CNY 3.177 billion. R&D investment as a percentage of operating revenue was 11.07%, down 0.34 percentage points from the prior year, but it still remains at a high investment level, providing support for the company’s technological innovation and product iteration.

• | | R&D expenses | 30.11 | 26.57 | 13.35% |

Analysis of R&D Personnel and Innovation Capability

In 2025, the number of the company’s R&D personnel reached 4,560, accounting for 42.43% of the company’s total headcount, up from 4,025 in the prior year, an increase of 13.29%. Total R&D personnel compensation was CNY 1.550 billion. Average compensation per R&D employee was CNY 0.340 million/person, up 7.90% from CNY 0.3151 million/person in the prior year. The company continues to increase investment in R&D personnel, attracting and retaining core technical talent.

For the full year, the company applied for 530 patents, including 430 invention patents; it obtained 404 authorized patents, including 306 invention patents. It led the drafting of 87 standards and participated in drafting 122 standards. It added 49 newly approved external projects. It successfully led 1 national science and technology major special project. Its technological innovation strength continues to lead the industry.

Cash Flow and Capital Operations Analysis

Cash Flow from Operating Activities: Net Inflow Growth, Improved Receivables Collection

Net cash flow from operating activities was a net inflow of CNY 3.965 billion, up 17.96% year over year. This was mainly due to the increase in cash received from sales of goods and services provided. While operating revenue grew, the company’s receivables collection capability improved in parallel. Cash flow from operating activities remained healthy.

Cash Flow from Investing Activities: Net Outflow Widens, Fewer Investments Recovered

Net cash flow from investing activities was a net outflow of CNY 6.520 billion, compared with a net outflow of CNY 3.199 billion in the same period last year. This was mainly due to a decrease in cash received from recovering investments. The company continues to push forward the expansion of production capacity for new industries. The ending balance of construction in progress was CNY 3.463 billion, up 49.75% from the prior year, laying the foundation for future development in terms of capacity.

Cash Flow from Financing Activities: Shifts from Net Inflow to Net Outflow, Financing Demand Declines

Net cash flow from financing activities was a net outflow of CNY 0.703 billion, compared with a net inflow of CNY 0.456 billion in the same period last year. This was mainly due to a decrease in cash received from the absorption of minority shareholder investments by subsidiaries. The company has sufficient cash reserves, and external financing demand has decreased.

• | | Net cash flow from financing activities | -7.03 | 4.56 | -254.04% |

Risk Factor Alerts

Risk to Core Competitiveness

The company continues to invest in research and development of new technologies and products. If there is an incorrect assessment of the direction of development for new technologies or if product R&D is delayed, it may lead to failures in developing new technologies and products or an inability to achieve expected returns, which would affect the company’s operating performance and competitiveness.

Operating Risks

• Demand in the rail transit industry is influenced by macroeconomic conditions, local government fiscal strength, infrastructure investment timing, and policy factors. Urban rail and railway investment may slow down, and new orders and delivery schedules may fall short of expectations, limiting growth in the company’s traditional main business.
• Although the emerging equipment industry is growing quickly, domestic competitors adopt low-price competition strategies, compressing profit margins and affecting the company’s profitability due to price wars.

Financial Risks

As the company advances its internationalization strategy, overseas businesses face risks including foreign exchange rate fluctuations leading to losses, risks related to accounts receivable, and risks in operating cost control. Overseas projects have long execution cycles, and differences in customers’ creditworthiness across different countries are significant. There is a risk of delayed payments and even bad debts. In addition, uncontrollable factors such as geopolitical conflicts and business sanctions may cause projects to be interrupted and assets to be lost.

Industry Risks

The new energy vehicle industry is in a period of intense competition (“involution”), where OEMs sacrifice profits in a blind pursuit of scale. Profitability is difficult across the upstream and downstream of the industrial chain, and competition in the electric drive industry is highly heated, posing substantial challenges to the company’s profitability.

Compensation for Executives and Supervisors

In 2025, the company’s compensation for directors, supervisors, and senior management is as follows (before tax):

• Chairman Li Donglin: The total before-tax remuneration received from the company during the reporting period was CNY 0.23 million;
• General Manager Xu Shaolong: CNY 1.1706 million;
• Deputy General Managers: Gong Tong CNY 1.2786 million, Yu Kang CNY 1.2656 million, Hu Yunqing CNY 1.4000 million, Yao Zhonghong CNY 1.1221 million, Gan Weiyi CNY 1.0055 million, Sun Shan (acting as Chief Financial Officer) CNY 0.8649 million, Chai Duo CNY 0.8737 million, He Zhengjun CNY 0.8421 million;
• Chief Financial Officer Sun Shan: CNY 0.8649 million (overlapping with the deputy general manager’s compensation).

The company’s compensation for directors, supervisors, and senior management is linked to the company’s performance. The compensation for senior management consists of basic annual pay and performance annual pay. Performance annual pay is determined based on organization performance and individual performance evaluations. The incentive mechanism is reasonable and effective.

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