According to the research report released by Nomura, the IGBT business of Times Electric (03898) may drag down performance in the second half of the year, and its railroad maintenance and repair orders may decline from next year. The earnings forecast for fiscal years 2024 and 2025 has been lowered to RMB 2.4 and RMB 2.78 per share respectively, and the rating has been downgraded from 'buy' to 'neutral', with the target price lowered from HKD 35 to HKD 32.

The report states that Times Electric's revenue in the first half of the year increased by 20% year-on-year, and profit increased by 31% year-on-year, mainly due to a decrease in operating expense ratio to 16% and an increase in non-operating income, but offset by an increase in effective tax rate to 6.3%. Nomura predicts that in the field of railway equipment, the group's new tender orders for high-speed trains will remain at a high level from the second half of this year to next year, benefiting from the demand gap in 2022, but the growth rate next year may slow down. As for high-speed train maintenance orders, due to the sluggish number of train operations in 2022 to 2023, demand is expected to be under pressure and reach its peak this year, with an expected year-on-year decrease in maintenance orders next year. As for the power semiconductor business, the bank expects that depreciation burden will continue to rise from the second half of this year, which may put pressure on its profit margin.