How did WIT Industrial perform in the first three quarters of 2025?

Wuxi WIT Industrial Technology Co., Ltd. (stock abbreviation: WIT Industrial) was founded in 2008 and listed on the ChiNext of the Shenzhen Stock Exchange in October 2017. Headquartered in Xinwu District, Wuxi, the company is a high-tech enterprise specializing in high-end automotive equipment and auto parts, with core technologies in metal forming and metal joining for the automotive industry. It offers a broad range of niche products, serves a wide customer base, and possesses strong application development capabilities. Its main products include automotive stamping dies, inspection fixtures, stamped and welded automotive components, new-energy vehicle battery enclosures, and related industrial automation products. "Dies & Fixtures" and "Stamped Parts" constitute WIT Industrial’s two core businesses, with minor contributions from other segments. The domestic and international markets are roughly comparable in scale, though the domestic market holds a slightly larger share. In the first three quarters of 2025, WIT Industrial’s revenue declined year-on-year by 10.7%—the first time since 2020 that the decline exceeded 10%. Combined with subpar performance over the prior two years, the company’s overall operating situation can only be described as mediocre. Net profit plummeted by over 60% in 2023 and has been recovering modestly in both 2024 and the first three quarters of 2025. Although it remains possible that full-year 2025 net profit could surpass the pre-decline level of 2022, such an outcome appears unlikely. Gross margin has trended downward overall. A sharp drop occurred in 2020—partly attributable to changes in revenue recognition standards, not solely due to pandemic-related and macroeconomic headwinds. However, the subsequent four years of continuous decline were driven purely by market conditions—not accounting methodology. In the first three quarters of 2025, gross margin posted a modest rebound: although small in magnitude, this reversal in trend is encouraging. Return on sales (ROS) and return on equity (ROE) were generally excellent through 2022 and earlier; over the past two-plus years, they have merely met the passing threshold. ROS and ROE remain closely aligned—a reflection of relatively low financial leverage. From 2021 to 2022, gross profit margins on core operations fluctuated around 10 percentage points—indicating acceptable profitability. In 2023 and 2024, however, margins fell below 5 percentage points, signaling a substantial deterioration in profitability. In the first three quarters of 2025, core business gross margin stood at 6.6 percentage points—marking an improvement over the prior two years. This rebound stems from two concurrent favorable factors: the recovery in gross margin and a decline in period expenses as a share of revenue. Among period expenses, administrative expenses dominate, followed by R&D and selling expenses. Though absolute expense levels remain modest, WIT Industrial’s limited revenue scale makes it difficult to significantly reduce period expenses as a percentage of revenue—unless revenue surges substantially. Regarding other income, the company recorded net losses from 2022 through 2024. Relative to WIT Industrial’s revenue and net profit scale, these losses are nontrivial. The combined effects of "asset impairment losses," "credit impairment losses," and "investment income"—each rising and falling in turn—appear too interwoven and volatile to warrant detailed individual analysis.

Zhenyu Technology: Revenue exceeds RMB 10 billion in the first three quarters; demand-supply synergy unlocks growth potential.

Profit quality improved in tandem. In the first three quarters, Zhenyu Technology’s weighted average return on equity (ROE) reached 13.91%, up 2.53 percentage points year-on-year; basic earnings per share (EPS) amounted to RMB 2.78, up 61.63% year-on-year; diluted EPS stood at RMB 2.75, up 64.67% year-on-year. As revenue expanded rapidly, shareholder returns rose accordingly—demonstrating a virtuous cycle between profitability enhancement and scale growth. Balance sheet expansion confirms the company is navigating a dual-growth trajectory—expanding both production capacity and business scope. As of end-September, total assets reached RMB 18.94 billion, up 45.22% from year-end 2024; shareholders’ equity attributable to listed company shareholders totaled RMB 5.454 billion, up 22.69% year-on-year. During the reporting period, the company successfully issued convertible corporate bonds; cash and cash equivalents stood at RMB 1.696 billion at quarter-end—up 97.18% year-on-year—significantly strengthening its capital base and providing ample funding reserves for future capacity expansion and R&D investment. "Robust Demand and Supply" Fuels Performance Growth The company attributed its rapid revenue growth clearly in its Q3 report: “strong downstream customer demand and ramp-up of production capacity.” Deconstructing this, the robust performance stems from synergistic forces on both the demand and supply sides. On the demand side, Zhenyu Technology specializes in precision structural components for lithium-ion batteries and motor iron cores—core precision-manufactured parts deeply integrated into the new-energy industry chain. Since 2026, demand for lithium-ion batteries—especially energy storage batteries—has remained highly robust, with downstream customers placing abundant orders, driving sustained sales growth. As a supplier of precision structural components for lithium-ion batteries, Zhenyu Technology’s products serve new-energy vehicles and energy storage systems. Downstream battery manufacturers’ production planning and capacity expansion schedules directly determine order visibility for Zhenyu’s structural component business. At quarter-end, accounts receivable totaled RMB 5.804 billion—up 36.99% year-on-year—primarily reflecting increased receivables driven by higher revenue, thus corroborating sales volume expansion at the financial statement level. On the supply side, production capacity ramp-up is critical to fulfilling demand and converting it into revenue. First, utilization rates of existing capacity continue to rise, supporting timely delivery of current orders. Second, newly added capacity is being commissioned rapidly, opening room for further scale expansion. Financial data show that construction-in-progress stood at RMB 1.744 billion at quarter-end—up 155.46% year-on-year—mainly attributable to business scale expansion and increased fixed-asset investment. Inventory totaled RMB 1.836 billion—up 50.15% year-on-year—and prepaid expenses amounted to RMB 102 million—up 61.31% year-on-year—both direct reflections of raw material procurement and production-line resource preparation amid business expansion.

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