Zhejiang Dingli Machinery Co: Revenue up, profit mixed, and cash flow down sharply in Q3 2025

Chinese industrial companies with heavy U.S. exposure but make or source their products in China likely face greater risk to their earnings, say Citi analysts in a note. The threat of an additional 100% tariff on Chinese imports applies only to those that directly export to the U.S. Companies that fall under this category include Zhejiang Dingli Machinery, Chervon and Stanley Black & Decker, they note. Chinese industrial stocks are likely to face higher volatility, but the movements should be less extreme than in 2Q after the initial U.S. reciprocal tariff announcement, they add. (megan.cheah@wsj.com)

Total assets and net profit saw strong year-over-year growth, with net profit up 27.63% and revenue up 12.35%. Operating cash flow turned negative, and no profit distribution was proposed. Weighted ROE and EPS both improved significantly.

Original document: Zhejiang Dingli Machinery Co., Ltd. Class A [603338] Interim report — Aug. 28 2025

The U.S.-Vietnam trade deal looks positive for come Chinese industrial companies, Citi analysts say. The U.S. will charge 20% tariffs on Vietnamese goods--instead of 46%--and 40% on U.S.-bound goods from other countries that pass through Vietnam. Citi reckons the U.S. could finalize tariff bills with other Asean countries soon. The newsflow would benefit Techtronic most given that it has high revenue exposure to the U.S., and almost half of U.S. sales were made in Vietnam this year, it adds. Techtronic should be in a better position than rivals like Chervon as it is better placed to avoid transshipment tariffs. By contrast, Chervon is still moving facilities from China into Vietnam. Citi reiterates buy calls on Techtronic, Shenzhou, Stella, Crystal; and sell on Zhejiang Dingli and Chervon. (fabiana.negrinochoa@wsj.com)

Revenue and net profit surged 30.72% and 41.83% year-over-year, respectively, in Q1 2025, driven by market expansion, though operating cash flow turned negative due to higher procurement and staff costs.

Original document: Zhejiang Dingli Machinery Co., Ltd. Class A [603338] Interim report — Apr. 29 2025

Chinese shares were mixed at the close of Friday's trade as investors are wary over the ongoing trade war with the US as new ship fees were planned to be introduced.

The Shanghai Composite Index, the main gauge of Chinese stocks, slipped marginally to cap the trading week at 3,276.73. The Shenzhen Component Index added 0.2%, or 22.60 points, to 9,781.65.

The Trump administration plans to impose port fees on Chinese ships docking at US ports in a bid to boost shipbuilding in the US, according to the US Trade Representative on Thursday.

Chinese vessels will be charged fees based on net tonnage per voyage in the first 180 days, while carrier vessels and ships built in the US will be incentivized.

In corporate news, Zhejiang Dingli Machinery slumped 8.6% after its 2024 attributable net profit dropped 13% year on year to 1.63 billion yuan, while its operating income jumped 24% to 7.80 billion yuan.

Shaanxi Energy Investment slid 3% after its first-quarter attributable net profit fell 29% year on year to 703 million yuan and its operating income slipped 7.8% to 5.20 billion yuan.

Zhejiang Dingli Machinery has an average rating of overweight and mean price target of 59.87 yuan, according to analysts polled by FactSet.