Time Electric released its Q3 financial report ahead of schedule this year, showing a return to growth in the rail transit business and continued high growth in the new energy business. As the impact of the epidemic weakened, rail transit projects such as railways began to show signs of recovery in the third quarter, which stabilized the company's performance. In the new energy business, electric vehicle drives and wind and solar power still contributed greatly to the company's growth in the third quarter. The Dolphin Analyst believes that Time Electric's profits still come mainly from the high gross margin rail transit business, while the new energy business mainly provides revenue growth. Although the company's overall performance was good this quarter, as the new energy business grows, the company's performance is increasingly affected by the ups and downs of the new energy sector.

1. Revenue: Time Electric.HK achieved a revenue of 4.349 billion yuan in Q3 2022, a year-on-year increase of 34.7%. The revenue growth this quarter mainly came from the recovery of rail transit business and the high growth of new energy business.

Progress of various businesses:

1) Rail transit equipment business: Time Electric achieved revenue of 7.202 billion yuan in the first three quarters of the year, a year-on-year increase of 5.37%. Q3 achieved revenue of 2.602 billion yuan, a year-on-year increase of 6.73%, of which railways and rail transit businesses rebounded in the third quarter.

①Electrical equipment for rail transit: Achieved revenue of 5.703 billion yuan in the first three quarters, a year-on-year increase of 0.77%. Q3 realized revenue of 2.07 billion yuan, a year-on-year increase of 12.8%; ②Railway engineering machinery: Revenue in the first three quarters was 783 million yuan, a year-on-year decrease of 5.87%, Q3 realized revenue of 248 million yuan, a year-on-year decrease of 55.5%; ③Communication signal system: Revenue in the first three quarters was 374 million yuan, a year-on-year increase of 123.34%, and Q3 realized revenue of 188 million yuan, a year-on-year increase of 408%.

2) Emerging equipment business: Time Electric achieved revenue of 3.529 billion yuan in the first three quarters, a year-on-year increase of 136.98%. Q3 realized revenue of 1.701 billion yuan, a year-on-year increase of 138.9%, of which the new energy sector was the largest addition. In terms of new energy electric drives, the company's installation volume reached about 80,000 units in the first 7 months, ranking sixth. The growth of wind and solar power installation volume in the third quarter drove high growth in industrial inverter business.

①IGBT: Revenue in the first three quarters was 1.292 billion yuan, a year-on-year increase of 77.82%, and Q3 realized revenue of 520 million yuan, a year-on-year increase of 47.3%; ②New energy vehicle electric drive system: Revenue in the first three quarters was 835 million yuan, a year-on-year increase of 193.83%, and Q3 realized revenue of 399 million yuan, a year-on-year increase of 191.2%; ③Industrial inverter: Revenue in the first three quarters was 845 million yuan, a year-on-year increase of 303.66%, and Q3 realized revenue of 519 million yuan, a year-on-year increase of 765%; ④Sensor components: Revenue in the first three quarters was 266 million yuan, a year-on-year increase of 127.29%, and Q3 realized revenue of 141 million yuan. 2. Gross Profit: Dolphin Electric achieved a gross profit of RMB 1.385 billion in Q3 2022, a YoY increase of 12.5%. The growth rate of gross profit is lower than that of revenue due to a decline in gross margin. The company's gross profit margin was only 31.8% this quarter, maintaining a downward trend, mainly because the proportion of low gross margin new equipment business has increased.

3. Operating Expenses: Dolphin Electric's three operating expenses in Q3 2022 were RMB 801 million, a YoY decrease of 1.7%. The decline in operating expenses was mainly due to a decrease in management and R&D expenses.

4. Net Profit Attributable to Equity Holders of the Company: Dolphin Electric's net profit attributable to equity holders of the company in Q3 2022 was RMB 692 million, a YoY increase of 36.5%. The growth in the company's revenue and the contraction of expenses allowed the company to achieve 30%+ growth again.

Dolphin CRRC Times Electric's historical articles review:

In-depth Report

June 14, 2022 "Jumping on the Safety Cushion and Creating a New Era of Electric Power with IGBT?"

May 16, 2022 "Dolphin Electric: Rushing on Rail Transit, or Taking the Dongfeng of IGBT?"

Quarterly Report

August 27, 2022, Quarterly report comment, "Sowing and Harvesting, Dolphin Electric's "Power" Time"

Risk Disclosure and Statement of this Article: Dolphin Research Disclaimer and General Disclosure

Times Electric Third Quarter Report Overview