CEI(688128)：STEADY PERFORMANCE GROWTH AND PROACTIVE EXPANSION INTO NEW MARKETS

Key takeaway


In 2025, the company achieved revenue of RMB4.766bn, up 5.38% YoY; net profit attributable to shareholders of the parent company was RMB534mn, up 14.43% YoY; and non-GAAP net profit attributable to shareholders of the parent company was RMB483mn, up 22.63% YoY. In 1Q26, revenue reached RMB1.182bn, up 4.25% YoY; net profit attributable to shareholders of the parent company was RMB134mn, up 5.99% YoY; and non-GAAP net profit attributable to shareholders of the parent company was RMB130mn, up 6.31% YoY. The company strengthened its qualification and capability building in quality and technical services while actively expanding into the green and low-carbon sector. Ten laboratories were officially completed and put into operation, including a new energy vehicle EMC laboratory, an energy storage and power battery testing laboratory, a photovoltaic inverter laboratory, and an environmentally friendly flame-retardant wire and cable combustion laboratory, which will effectively support steady revenue growth in related segments. The new energy battery production and testing equipment business achieved rapid growth, with the value of newly signed contracts increasing significantly year on year. The company applied its series formation and grading technology to a 46-series large cylindrical battery mass production line for the first time. The powder coating business accelerated its penetration into new powder-coating-replacing-liquid-coating application areas such as automotive wheels and parts, new energy batteries, energy storage, and coil materials.


Event


In 2025, the company achieved operating revenue of RMB4.766bn, up 5.38% YoY; net profit attributable to shareholders of the parent company was RMB534mn, up 14.43% YoY; and non-GAAP net profit attributable to shareholders of the parent company was RMB483mn, up 22.63% YoY. In 1Q26, the company achieved operating revenue of RMB1.182bn, up 4.25% YoY; net profit attributable to shareholders of the parent company was RMB134mn, up 5.99% YoY; and non-GAAP net profit attributable to shareholders of the parent company was RMB130mn, up 6.31% YoY.


Quick Take


(1) Revenue maintained steady growth while earnings sustained double-digit expansion


In 2025, the company's operating revenue achieved steady growth, and net profit attributable to shareholders of the parent company has maintained a double-digit growth rate since 2018. Among its businesses, the testing and certification segment achieved operating revenue of RMB1.101bn, up 9.22% YoY; new energy battery production and testing equipment (formerly new energy battery post-processing systems) achieved operating revenue of RMB877mn, surging 45.88% YoY, mainly benefiting from the concentrated acceptance of prior projects in 2025; and excitation equipment achieved operating revenue of RMB161mn, up 15.91% YoY. Customized components, polyester resin, and powder coatings achieved operating revenue of RMB334mn, RMB964mn, and RMB282mn, respectively, up 8.72%, 0.54%, and 8.15% YoY.


In 2025, the company's comprehensive gross margin was 34.15%, up 1.55 pcts YoY, mainly driven by internal cost reduction and efficiency improvement in new energy battery production and testing equipment, whose gross margin rose 3.19 pcts YoY. The company's period expense ratio was 21.67%, a slight increase YoY. The net margin was 11.29%, up 0.88 pcts YoY, reaching a record high. In 1Q26, the company's comprehensive gross margin was 31.23% and net margin was 11.33%.


(2) Over 60 years of deep commitment in quality and technical services, with new energy battery production and testing equipment leading the domestic market


The company is a state-level technology innovation enterprise underpinned by industrial basic generic technology research, driven by core and key technology R&D, and guided by technical standard innovation. It is committed to providing integrated solutions for product quality improvement in electrical appliances and related derivative fields, and has established four major business areas: quality and technical services, electrical equipment, complete sets of equipment, and environmentally friendly coatings and resins .


Quality and technical services: Covering multiple application areas such as smart homes, smart vehicles, energy equipment, and medical health, the company can provide customers with one-stop quality technical services that integrate industrial basic generic technology research, standardization, testing, certification, inspection, metrology, proficiency testing, and audit verification, as well as quality improvement extension services including laboratory technical services and training. These services span the entire corporate value chain from R&D design, procurement, and production to market circulation and operation and maintenance, covering multiple scenarios such as household, commercial and industrial, high-altitude, and low-altitude applications.


Electrical equipment: Based on power conversion and control technologies, the company has independently developed products such as new energy battery production and testing equipment, excitation equipment, and industrial power supplies.


Complete sets of equipment: Based on technologies such as industrial robot system integration and advanced control, the company independently develops products such as intelligent CNC sheet metal equipment, intelligent assembly lines, automatic testing lines, intelligent welding and assembly lines, intelligent coating lines, surface treatment equipment, and testing equipment, and provides customized production information management systems to realize factory management informatization and intelligence. This delivers system solutions covering everything from individual production processes to complete factory workflows for industries such as home appliances and two-wheeled vehicles.


Eco-friendly coatings and resins: primarily including powder coatings, liquid coatings, and polyester resins.


The quality and technical services business is the company's core business. After more than 60 years of development, its proficiency testing service capabilities are particularly outstanding, especially in the electrical sector. The company's standard development and revision capabilities and numerous quality evaluation technologies are industry-leading. It administers 27 national and international standardization platforms and has led or participated in the development and revision of over one thousand international, national, and industry standards. The company operates three national quality inspection and testing centers: the National Quality Inspection and Testing Center for Household Appliances, the National Quality Inspection and Testing Center for Intelligent Automotive Components, and the National Quality Inspection and Testing Center for Plateau Electrical Equipment. These centers enjoy a high degree of international mutual recognition, and reports issued by them are recognized by over 100 authoritative bodies in more than 70 countries and regions.


In the electrical equipment sector, the company has been developing and manufacturing battery testing equipment since 1989. It is a leading domestic provider of new energy battery production and testing equipment and can supply a complete set of fully automatic post-processing systems for lithium batteries. The company pioneered high-voltage series formation and grading technology in the industry, which has been highly recognized by numerous leading domestic battery enterprises and extended to customer groups such as vehicle manufacturers. The company is one of the earliest manufacturers engaged in the R&D of synchronous motor excitation equipment in China and is currently one of the most competitive professional excitation manufacturers in the domestic market. Its technological capabilities hold a leading position domestically, and its market share ranks among the top in China. Its products are applicable to sectors such as hydropower, thermal power, nuclear power, pumped storage, and synchronous motors. The company is also a leading domestic provider of smart factory system solutions for the home appliance industry, with industry-leading closed-loop service capabilities for the home appliance industry chain. Its products are exported to countries and regions along the Belt and Road Initiative, as well as North America, Germany, and Brazil.


(3) Actively venturing into green, low-carbon, and new energy sectors while strengthening overseas market expansion


In 2025, the company's quality and technical services will strengthen qualification and capability building and actively deploy in the green and low-carbon sector. The company has become a designated certification body for CCC certification of gas combustion appliances and safety accessories, and electric vehicle supply equipment, as well as a designated laboratory for CCC certification of electric vehicle supply equipment. It has also become a testing and inspection institution for cosmetic registration and filing recognized by the National Medical Products Administration, a judicial appraisal professional institution appointed by Guangdong courts, and a GD28 ship equipment reliability verification testing laboratory authorized by the China Classification Society. Actively responding to the national "dual carbon" goals, it was selected as one of the first batch of pilot institutions for national product carbon footprint labeling certification and a carbon footprint labeling certification institution for Jiangsu Province and the Guangdong-Hong Kong-Macao Greater Bay Area, and has also gained accreditation as a greenhouse gas validation and verification body. Meanwhile, it actively deployed in strategic emerging fields and strengthened capacity building. Ten laboratories, including those for new energy vehicle EMC, energy storage and power battery testing, photovoltaic inverter testing, and environmentally friendly flame -retardant wire and cable combustion testing, were officially completed and put into operation, which will effectively support steady revenue growth in related segments.


The new energy battery production and testing equipment business achieved rapid growth, with the value of new contracts signed increasing significantly YoY. The company successfully put into operation the industry's highest current-level energy storage battery formation and grading mass production line, applied series formation and grading technology to the 46-series large cylindrical battery mass production line for the first time, and successfully undertook multiple overseas projects. The company successfully signed multiple pumped storage excitation projects, such as the Nanwang Guanyang and CNNC Jiufengshan projects, and won bids for several large-capacity thermal power transformation projects. The company continued to deepen its presence in industrial power supplies, maintaining a leading market share in the electronic aluminum foil industry, and secured multiple domestic benchmark projects in the electrolytic hydrogen production field.


The powder coating business accelerated its penetration into new "paint -to-powder" fields such as automotive wheels and components, new energy batteries, energy storage, and coil materials . The company's wheel primer powder won the bid for a centralized procurement project from a leading domestic wheel enterprise, and its acrylic transparent powder for wheel topcoating has achieved stable batch supply. The company won bids for battery pack insulation powder projects from multiple domestic new energy vehicle enterprises, successfully initiated large-scale application of powder coatings for energy storage brackets, and achieved mass supply in the coil material "paint-to-powder" market. In the resin business, R&D on high-value-added powder polyester continued to progress, achieving product technology iteration in "paint-to-powder" fields such as containers and coil materials. Special resins like solid acrylic achieved industrialized batch application and domestic substitution, while waterborne acrylic resin was industrialized and supplied in large quantities for the company's internal waterborne paint production. In terms of international business, the company systematically increased its development efforts in North Africa and South America, successfully expanding business in countries such as Egypt, Brazil, and Argentina, with international market sales volume continuing to climb.


Earnings forecast and investment recommendation:


We estimate the company's operating revenue for 2026-2028 to be RMB5.259bn, RMB5.799bn, and RMB6.400bn, representing YoY growth of 10.33%, 10.28%, and 10.35%, respectively; net profit attributable to shareholders of the parent company is expected to be RMB610mn, RMB6.96mn, and RMB7.86mn, representing YoY growth of 14.07%, 14.12%, and 12.95%, respectively. The corresponding PE multiples based on the current share price are 18.5x, 16.2x, and 14.4x. We initiate coverage with "Overweight" rating.


Risks:


1. Risk of technological upgrading and iteration: As new technologies in the electrical appliance industry continue to upgrade and iterate, the company must track cutting-edge industry technologies in a timely manner, adjust its R&D direction, and strengthen basic and applied basic research to keep its core technologies continuously updated. If the company misjudges relevant technological and market development trends, or if market acceptance of new technologies and new products falls short of expectations, it will adversely affect the company's technological innovation and industrialization capabilities, hindering its ability to maintain sustained competitiveness.


2. Industry risk and overseas operation risk: As an emerging industry, the new energy vehicle sector is in a period of rapid development and transformation. Changes in the industry's macro environment and related policies will affect the company's business expansion in this sector. The company is currently accelerating its overseas market expansion. However, due to various factors such as local policies and regulations, foreign exchange policies, and adverse international situations, if the company cannot respond promptly to changes in the overseas market environment, it will pose certain risks to its overseas operations.


3. Risk of bulk raw material and energy price fluctuations: The main raw materials for the eco-friendly coatings and resins business are bulk chemical raw materials such as purified terephthalic acid, neopentyl glycol, and isophthalic acid. Since there is a lag in adjusting the selling prices of the company's products, a sharp short-term increase in bulk raw material prices will lead to a decline in the profitability of the eco-friendly coatings and resins business, adversely affecting the company's revenue and profit levels. The energy supply required for the polyester resin manufacturing process is mainly concentrated in natural gas and electricity. Affected by local international geopolitical conflicts, crude oil price fluctuations, and the "dual carbon" policy, there is a risk of insufficient energy supply or increased costs. Significant future fluctuations in raw material prices will adversely affect the company's performance. Assuming the company's consolidated gross profit margin decreases by 1.0pct each year from 2026 to 2028, the forecasted net profit attributable to shareholders of the parent company for the same period would decrease by7.28%, 7.04%, 6.88% respectively

□.Z.H.A.N.G. .Y.u.l.o.n.g./.Q.I.U. .J.i    .中.信.建.投.证.券.股.份.有.限.公.司