UOB Kay Hian
Date of Report: Wednesday, 27 August 2025
Joyson Electronics (600699 CH) Delivers Robust 2Q25 Results, Ups Target as Innovation and Global Demand Accelerate

Overview: Strong Earnings Momentum for Leading Automotive Supplier

Joyson Electronics Corp., a global leader in automotive parts, continues its growth trajectory and technological evolution, reporting a solid set of 2Q25 results. The company stands out for its research, development, and manufacturing of smart driving systems, automotive safety systems, power management solutions, and Internet of Vehicles technologies. In the second quarter of 2025, Joyson’s net profit was in line with expectations, underpinned by product innovation, operational efficiency, and a strong order pipeline—especially in intelligent driving and electrification.

Stock Snapshot and Performance Highlights

• Ticker: 600699 CH
• Share Price: RMB 21.01
• Target Price: Raised from RMB 23.00 to RMB 28.00, implying a 33.3% upside
• Market Cap: RMB 29,597 million (approx. US\$3.8 billion)
• 3-Month Avg Daily Turnover: US\$75 million
• 52-Week Range: RMB 13.33 – RMB 21.18
• Major Shareholder: Ningbo Joyson Holdings Co., Ltd. (36.73%)
• 2025 NAV/Share: RMB 1.77
• 2025 Net Cash/Share: RMB 11.74

2Q25 Financial Performance: Surpassing Revenue Expectations

Joyson Electronics posted a 2Q25 net profit of RMB 367 million, up 11% year-on-year and 8% quarter-on-quarter, matching market expectations. Notably, revenue outperformed due to the consolidation of Senssun, an acquisition that bolstered top-line growth.

Key Takeaways from 1H25 Results

• Net Profit: 1H25 reported at RMB 708m, up 11.1% year-on-year.
• Core Net Profit: 1H25 at RMB 706m, a robust 34.9% year-on-year increase.
• Revenue: 1H25 consolidated revenue reached RMB 30.3 billion (+12.1% YoY). Excluding Senssun, revenue was RMB 27.4 billion (+1.2% YoY), with automotive safety at RMB 19.0 billion and automotive electronics at RMB 8.4 billion.
• Overseas Revenue: RMB 22.5 billion, accounting for 75% of total revenue.

Operational and Segment Highlights

Gross Margin Improvement

• Gross margin advanced to 18.4% in 2Q25 (+2.7ppt YoY), mainly due to improved operational efficiency after the 2024 group restructuring.
• Automotive safety segment gross margin: 15.9% (+2.0ppt YoY)
• Automotive electronics segment gross margin: 21.5% (+2.2ppt YoY)

Cost and R&D Structure

• SG&A/Revenue Ratio: Increased by 1.0ppt YoY to 6.4% in 2Q25, reflecting business expansion and Senssun consolidation.
• R&D/Revenue Ratio: Rose 1.9ppt YoY to 5.7% in 2Q25, driven by investments in autonomous driving and humanoid robotics.

Cash Flow

• Healthy cash generation, with operating cash flow rising 20% QoQ to RMB 1,039m in 2Q25 and up 2% YoY for 1H25.

Strategic Drivers: Innovation, Robotics, and Global Expansion

Auto Electronics & Intelligent Driving

• Secured a RMB 1 billion domain controller project from a leading Chinese OEM, in partnership with Momenta.
• Technological leadership in cockpit-domain fusion and 5G/V2X solutions continues to attract premium brands such as BMW and Mercedes.

Robotics

• Leveraging automotive hardware/software expertise, Joyson is now supplying components and assemblies to robotics clients including Agibot, Galaxy General, and a major North American robot company.

Electric Vehicles (EVs) & Global Operations

• Supporting Chinese EV brands’ international expansion via localized production, especially in high-voltage platforms (800V+) and Battery Management Systems (BMS).
• Dominant with both domestic NEV makers and international OEMs.

Order Book and Outlook: Accelerating Momentum

• 1H25 new orders total: RMB 31.2 billion; auto safety contributed RMB 17.4 billion, auto electronics RMB 13.8 billion.
• Over 66% of new orders are EV-related, highlighting Joyson’s pivot to the electrification megatrend.
• Order intake surged in July, with auto safety alone securing RMB 5.7 billion in new orders—suggesting strong momentum into 2H25.

Financial Forecasts and Valuation

Balance Sheet and Cash Flow Health

Joyson’s balance sheet remains robust, with a steady increase in fixed assets and healthy liquidity. Net debt to equity is forecast to decline from 129.0% in 2024 to 79.7% by 2027, reflecting improving leverage and consistent operating cash flow.

Valuation and Recommendation

The target price has been upgraded to RMB 28.00 (from RMB 23.00), reflecting a 20x PE multiple rolled to 2026.
Joyson’s core net profit is forecast to grow at a 21% CAGR from 2024-2027.
The stock is rated BUY, supported by strong order momentum, margin expansion, and leadership in auto innovation.

Summary: Why Joyson Electronics Remains a Top Pick

Joyson Electronics’ robust 2Q25 results reaffirm its position as a key player in automotive innovation, with growth powered by intelligent driving, electrification, and robotics. The company’s strategy of product innovation, efficiency gains, and global expansion—particularly in EV and high-value components—supports an optimistic outlook. With a healthy balance sheet, increasing cash flow, and a record-breaking order book, Joyson is well-positioned for continued outperformance in the rapidly evolving automotive sector.
Key Risks

• Order fluctuations and macroeconomic headwinds
• Integration risks from acquisitions
• Execution risks in overseas expansion and high-tech segments

Joyson Electronics stands out as a compelling investment for those seeking exposure to the intelligent mobility and EV megatrends, backed by operational excellence and innovation-driven growth.