Soochow Securities: Initiates Buy Rating on Jinpan Technology

Everbright Securities Co., Ltd. Zeng Duohong and Si Xinyao recently conducted research on Jinpan Technology and published the research report “2025 Annual Report Review: Performance in Line with Market Expectations, Rapid Growth in AIDC Business,” giving Jinpan Technology a “Buy” rating.

Jinpan Technology (688676)

Investment Highlights

Event: The company released its 2025 annual report. In 2025, revenue was 7.29 billion yuan, up 5.7% year-over-year; net profit attributable to shareholders was 660 million yuan, up 14.8%; net profit after non-recurring gains and losses was 610 million yuan, up 10.6%. In Q4 2025, revenue was 2.10 billion yuan, down 0.1% year-over-year; net profit attributable to shareholders was 170 million yuan, up 1.9%. For the full year, gross profit margin was 25.9% (+1.5 percentage points), net profit margin was 9.0% (+0.7 percentage points). In Q4, gross profit margin was 25.3%, up 0.7 percentage points; net profit margin was 8.3%, up 0.2 percentage points. The company’s performance aligns with the earnings forecast.

AIDC has become a strong engine for performance growth, with steady growth in new energy and energy storage sectors, and continued expansion of overseas revenue and orders. 1) The company seized the opportunity in AIDC development, achieving revenue of 1.34 billion yuan in 2025, a 197% increase year-over-year. It has successfully completed about 400 data center projects for clients including Baidu, Alibaba, China Mobile, China Telecom, and China Unicom, serving data center projects domestically and internationally; 2) The new energy sector also maintained steady growth, with wind power sales up 40% YoY, power generation and supply up 17%, and energy storage revenue reaching 620 million yuan, an 18.6% increase; 3) Overseas revenue and orders continued to expand. By the end of 2025, the company’s order backlog was 7.21 billion yuan, up 11%. Overseas sales revenue in 2025 was 2.30 billion yuan, up 16%. New orders signed amounted to 3.16 billion yuan, accounting for 36% of total sales orders; overseas orders on hand totaled 3.49 billion yuan, representing 48% of the backlog. During the reporting period, the company’s Malaysia factory officially commenced operations. We expect that as the company continues to penetrate overseas markets, its overseas revenue will maintain rapid growth.

The company continues to develop new products, with SST products achieving technological leadership. The company has launched the Yuan Shen ONE series SST products, with efficiency exceeding 98%. These products, with a capacity of 2.4MW, save over 60% of land compared to traditional solutions, achieving technological leadership. The company is also developing HVDC power supply architecture, with self-developed HVDC products successfully powering Jinpan Technology’s AI Factory smart factory. Our estimates suggest that the market for outside-the-closet DC power supplies could exceed 200 billion yuan by 2030, providing the company with significant opportunities to quickly capture market share and achieve high incremental growth.

Cost ratios have increased, but operating cash flow has significantly improved. The company’s expense ratios for 2025 and Q4 2025 were 15.32% and 17.27%, respectively, up 0.88 and 3.51 percentage points YoY. In 2025, sales, management, R&D, and financial expense ratios were 4.42%, 5.22%, 4.88%, and 0.81%, respectively, with changes of +0.60, +0.11, -0.24, and +0.40 percentage points. Operating cash inflow in 2025 was 601 million yuan, a 1725% increase YoY, with Q4 inflow of 423 million yuan, up 743%. This was mainly due to optimized customer structure and increased proportion of high-quality customer orders. Contract liabilities stood at 522 million yuan, down 18.9% from the beginning of the year; accounts receivable were 2.368 billion yuan, down 11.5%; inventories were 2.59 billion yuan, up 22.2%.

Profit forecasts and investment ratings: We expect the company’s net profit attributable to shareholders to be 890 million yuan in 2026 and 1.22 billion yuan in 2027, representing YoY increases of 35% and 37%, respectively, consistent with previous estimates. For 2028, net profit is forecasted at 1.58 billion yuan, up 29%. The current valuation corresponds to PE ratios of 41x, 30x, and 23x for 2025, 2026, and 2027, respectively. Considering the high prosperity of the transformer business, the significant growth potential of the AIDC business, we maintain a “Buy” rating.

Risk warnings: AIDC business development falling short of expectations, raw material price increases, intensified competition, etc.

Latest profit forecast details are as follows:

In the past 90 days, 10 institutions have issued ratings for this stock, with 8 “Buy” and 2 “Hold” ratings; the average target price over this period is 111.57 yuan.

This content is compiled from public information by Securities Star, generated by AI algorithm (Wangxin Calculation Backup No. 310104345710301240019), and does not constitute investment advice.