"Star Daily" news on November 8th (Reporter Yu Jiaxin) "The company's R&D focus is centered on the main responsibilities and main businesses, mainly revolving around quality technical services, electrical equipment, complete sets of equipment, eco-friendly coatings, and resins." This was mentioned by Chen Lixin, director and general manager of China National Electric Apparatus Research Institute Co., Ltd., during the third quarter 2024 earnings conference.

China National Electric Apparatus Research Institute Co., Ltd., as one of the first batch of state-owned research institutes to transform, has shown relatively stable performance in recent years. In the first three quarters of this year, the company achieved a revenue of 3.152 billion yuan, a year-on-year increase of 6.99%; the net income attributable to the parent company was 0.321 billion yuan, a year-on-year increase of 11.89%.

Looking at individual quarters, the company's revenue for the third quarter was 1.093 billion yuan, a year-on-year decrease of 0.78%; the net income attributable to the parent company was 0.125 billion yuan, a year-on-year increase of 21.96%, and a quarter-on-quarter decrease of approximately 1.42%.

China National Electric Apparatus Research Institute Co., Ltd. is continuously expanding its presence in the new energy business, particularly in quality technical services expanding to new energy autos and energy storage.

In August of this year, the "Regulations for the Operation Safety Performance Inspection of New Energy Autos" was released, and this regulation will officially take effect on March 1st next year. During this earnings conference, investors are concerned about the impact of relevant policies on China National Electric Apparatus Research Institute Co., Ltd.'s operations.

Chen Lixin, director and general manager of China National Electric Apparatus Research Institute Co., Ltd., stated that the company's new energy autos testing business currently focuses mainly on automotive regulatory access, R&D verification, and quality supervision. The main service targets are automotive companies and their supply chain enterprises, with a focus on the three major areas of new energy autos.

"The relevant policies mainly involve general safety inspections, with individual car users being the main service targets, which differ from the current positioning of the company's new energy autos testing business." mentioned by Chen Lixin.

Since the beginning of this year, corporate mergers and restructurings have become a new trend for companies listed on the Star Market. At the earnings conference, investors are also paying attention to the company's M&A related matters.

"The company has long focused on its core responsibilities and main business, always actively exploring the dual-wheel drive of internal growth and external mergers and acquisitions to assist the company's development." Chairman Qin Hanjun of China National Electric Apparatus Research Institute Co., Ltd. (ckh holdings) stated.

In September this year, China National Electric Apparatus Research Institute Co., Ltd. (ckh holdings) announced that its wholly-owned subsidiary Weikai Testing plans to use its own funds to acquire 49% of the shares held by two non-state-owned shareholders of Gao Haiba Company, a subsidiary of Kunming Electric Science and Technology Company, and increase its capital. The transaction involves an estimated amount of 28.77 million yuan. Gao Haiba Company and Kunming Electric Science and Technology Company are both enterprises controlled by the controlling shareholder of China National Electric Apparatus Research Institute Co., Ltd. (ckh holdings), State-Owned Assets Supervision and Administration Commission (国机集团)，this transaction constitutes a related party transaction.

"After the above transaction is completed, Weikai Testing will hold 70% equity of Gao Haiba Company, and the company's quality and technical service capabilities will be further enhanced." Qin Hanjun said.

In recent years, China National Electric Apparatus Research Institute Co., Ltd. (ckh holdings) has seen a continuous increase in inventory. The inventory from 2020 to 2023 was approximately 0.5 billion yuan, 0.9 billion yuan, 1.6 billion yuan, and 2.5 billion yuan respectively. In the first three quarters of this year, the company's inventory was 2.77 billion yuan, with a provision for credit impairment losses of 418.463 billion yuan, including inventory write-down losses of 1.7549 million yuan. Therefore, investors are concerned about the possibility of oversupply.

The company's CFO Han Baojin stated that the increase in net inventory value from 2020 to 2023 was mainly due to the rapid growth in the new energy battery post-processing system's new contract amount. This product is a customized product with a relatively long contract execution period. The increase in contract amount leads to an increase in inventory, and there is no oversupply situation.

Han Baojin also mentioned that the company's provision for asset impairment losses is in line with the actual situation of the company and will not affect the company's normal operation.

Regarding management changes, China National Electric Apparatus Research Institute Co., Ltd. (ckh holdings) announced on November 5th that, due to work adjustment reasons, Chen Bin applied to resign from the position of deputy general manager of the company. After resignation, he will not hold any position in the company. As of the disclosure date of the announcement, Chen Bin indirectly holds 0.7 million shares in the company through the employee shareholding platform, accounting for 0.17% of the total shares of the company.