汇川技术（A）：2025年第三季度电动汽车业务略低于预期；更多电动汽车零部件及人形机器人业务扩张

24 October 2025 21% YoY but down 3% QoQ at RMB11.2bn, 4% below our forecast. GPM in 3Q25 camein at 27.5%, down 1.2ppt YoY/2.1ppt QoQ, and slightly below our forecast (27.8%),mainly dragged by a lower GPM in its EV component business. Operating income (cleanEBIT) was up 7% YoY but down 21% QoQ at RMB1.2bn, 3% below our estimate. Netincome in 3Q25 was RMB1.3bn, up 4% YoY but down 22% QoQ, largely in line with ourestimate (+1% YoY), partially supported bya tax credit of RMB45mn. Equity FA business maintained solid growth By sector, Inovance’s general automation (including robot) 3Q25 sales came in atRMB4.3bn, up 25% YoY, mainly supported by: (1) demand recovery in China’s FA market;(2) solid demand from battery/logistics/construction machinery/3C/auto/shipbuildingsector, as well as demand recovery from the textile sector; (3) market-share gain in auto& semiconductor industry; and (4) its expansion in the overseas market. The GPM of itsFA business also improved YoY in 3Q25, thanks to higher sales contribution of high-margin PLC business. EV components revenue grew 22% YoY to RMB5.3bn in 3Q25,slowing QoQ, mainly due to lowered orders from a customer. Elevator business waslargely flattish YoY in 3Q25 at RMB1.3bn amid weak property market in China. Thecompany’s NPM stood at 12% in 3Q25. Management expects it to improve to 13-14% inthe coming years, thanks to effective cost control. Ming Hsun Lee, CFA>>Research AnalystMerrill Lynch (Hong Kong)+852 3508 5006minghsun.lee@bofa.com Kenjin Hotta>>Research AnalystBofAS Japan Yikai Liu, CFA>>Research AnalystMerrill Lynch (Hong Kong) RaisePO to RMB91; reiterate Buy We factor inthe 3Q25 results and lift our 2025-27E earnings by 0-1%, mainly on higherOPM expectation. We derive our new PO of RMB91 (was RMB85) from the average ofP/E and DCF valuation (see details on Page 5). We reiterate Buy on Inovance, given themarket-share gain in its key products, including inverter, servo, PLC, and industrial robot,as well as robust growth of its EV components due to more new products launch. FA: factory automation EV: electric vehicle PLC: programmable logic controller >> Employed by a non-US affiliate of BofAS and is not registered/qualified as a research analystunder the FINRA rules.Refer to "Other Important Disclosures" for information on certain BofA Securities entities that take responsibility for the information herein in particular jurisdictions.BofA Securities does and seeks to do business with issuers covered in its research 3C: computer, communication andconsumer electronics reports. As a result, investors should be aware that the firm may have a conflict ofinterest that could affect the objectivity of this report. Investors should consider thisreport as only a single factor in making their investment decision.Refer to important disclosures on page 9 to 12. Analyst Certification on page 6. PriceObjective Basis/Risk on page 6. iQprofileSMInovance Technology (A) Company SectorElectronics Company Description Shenzhen Inovance Technology focuses on R&D,manufacture and sales ofindustrial automation controlproducts, aiming to serve high-end equipmentmanufacturers. It was established in April 2003 and waslisted on the SZSE in September 2010. The company islocated in Shenzhen, China. Investment Rationale Inovance is a key beneficiary of the long-term industrialautomation uptrend in China. We have Buy on it as 1) itskey products like inverters, servo, PLC and robots all gainshare in China thanks to superior cost to performance, 2)robust growth in EV component led by key clients' fastshare gain, and 3) major beneficiary of supportive policymeasures from central government. Stock Data Price to Book Value6.4x Other key takeaways Expanding product portfolio in EV componentsIn 3Q25, revenue of Inovance Automotive (its EV component subsidiary) was RMB5.4bn, up 15% YoY. Its net income in 3Q25 was RMB243mn, down 16% YoY. NPM came in at4.5% in 3Q25, down 1.7ppt YoY, mainly due to weaker orders from one of its majorcustomers. In 3Q25, Inovance has booked orders from more than 20 new EV models. Itsoverseas revenue also grew >50% YoY in 3Q25, thanks to its rising sales to Europeancustomers. In 3Q25, revenue contribution from EV start-ups/overseas customersamounted to 50%/8% respectively. Looking ahead, management expects >30% YoYsales growth in its EV component business. Inovance is also expanding its productportfolio to smart chassis and air suspension, which are now in development stage.Management expects its product portfolio expansion and overseas expansion to supportgrowth of its EV component business in the next few years. Expansion in humanoid robot and factory digitalizationInovance has launched key humanoid robot components, including servo motor, servo drive, encoder, planetary roller screw and actuator at China International Industry Fair inSeptember. The company is now in talks with major Chinese and overseas humanoidrobot companies, and has received small-b