Revenue of 205 A-share automotive supply chain companies rose but profit did not in the first three quarters; single-quarter net profit in Q3 fell 29.90% year-on-year

Core viewpoints:

1. In aggregate, the pattern of "revenue growth without profit growth" for A-share auto industry chain concept stocks in the first three quarters of 2026 has been established;

2. In terms of pace, third-quarter single-quarter revenue of 459.500 billion yuan hit a new high for the year, but single-quarter net profit of 16.211 billion yuan fell 29.90% year-on-year and 18.41% quarter-on-quarter, with gross margin down 0.97 percentage points year-on-year;

3. In terms of structure, profits are accelerating toward leaders: Luxshare Precision alone contributed 26.0% of the sector's net profit, with the top ten companies accounting for absolute dominance; 47 companies posted losses and 58 had negative non-recurring net profit, accelerating the clearing out of tail-end players;

4. In terms of momentum, robotics, intelligent driving, liquid cooling and AIDC supporting facilities constitute a second growth curve, with R&D investment; and order reserves; indicating that divergence will continue.

The 205 A-share auto industry chain concept stocks recorded revenue of 1,245.427 billion yuan in the first three quarters of 2026, up 10.80% year-on-year; net profit attributable to parent companies was 50.208 billion yuan, down 9.78% year-on-year, clearly showing revenue growth without profit growth. The sector's gross margin fell to 15.95%, 47 companies posted losses, Luxshare Precision and Huayu Automotive led the way, while Visionox, Lens Technology and others were drags; rising costs combined with downstream price pressure were the main reasons.

Double-digit revenue growth, profits moving in the opposite direction

In the first three quarters of 2026, the 205 sample companies achieved total operating revenue of 1,245.427 billion yuan, up 10.80% from 1,124.015 billion yuan in the same period of 2025; total net profit attributable to parent companies was 50.208 billion yuan, down 9.78% from 55.654 billion yuan in the same period of 2025; total non-recurring net profit attributable to parent companies was 39.078 billion yuan, down 15.91% year-on-year, a larger decline than net profit attributable to parent companies, indicating more obvious pressure on core business profitability.

In terms of structure, among 204 comparable companies, 135 saw positive revenue growth, accounting for about 66.2%; among the 166 companies that were profitable in the same period of 2025, only 57 achieved positive net profit growth, accounting for about 34.3%; companies with negative net profit attributable to parent companies reached 47, and companies with negative non-recurring net profit reached 58. Revenue growth without profit growth and a narrowing profit base are the most prominent aggregate features of this reporting period.

The sector's weighted sales gross margin was 15.95%, down 0.45 percentage points from 16.40% in the same period of 2025; total R&D expenses were 60.896 billion yuan, up 11.00% year-on-year, with R&D intensity (R&D expenses/operating revenue) reaching 4.89%. Revenue expansion alongside declining gross margin confirms that the industry is in a competitive state of "trading price for volume + high-intensity R&D."

This performance corroborates industry data: Cui Dongshu, secretary-general of the China Passenger Car Association, estimates that from January to September 2026, the automotive industry's revenue was 8,043.5 billion yuan, up 2.6% year-on-year, profit was 267.5 billion yuan, down 23% year-on-year, and the sales profit margin was only 3.3%; Chen Shihua, deputy secretary-general of the China Association of Automobile Manufacturers, citing the "2026 China Automotive Supply Chain Development Report," said that from January to August, the automotive manufacturing industry's operating revenue was 7,006.16 billion yuan, up 2.9% year-on-year, with a profit margin of only 3.6%, of which the vehicle segment (excluding parts) had a profit margin of less than 2%. The 10.80% revenue growth of listed companies in the industry chain is significantly faster than the industry's revenue growth, showing that automotive electronics and new-track companies in the concept stock sample are expanding rapidly, but the profit direction is consistent with the industry.

Third-quarter revenue hits a new high for the year, profit falls quarter-on-quarter

By quarter, the sample companies' single-quarter operating revenue in the first, second and third quarters of 2026 was 370.323 billion yuan, 415.605 billion yuan and 459.500 billion yuan, respectively, rising quarter by quarter, with the third quarter hitting a new high for the year and single-quarter year-on-year growth of 10.12%; single-quarter net profit attributable to parent companies was 14.128 billion yuan, 19.869 billion yuan and 16.211 billion yuan, respectively, with the third quarter falling 18.41% after a second-quarter peak, down 29.90% from 23.125 billion yuan in the third quarter of 2025. The third quarter's single-quarter weighted gross margin was 15.68%, down 0.97 percentage points from 16.65% in the same period of 2025; single-quarter profitability fell both year-on-year and quarter-on-quarter, making it the weakest quarter on the profit side.

However, a number of companies in the sector still achieved significant profit repair in the third quarter: Tongda Electric's third-quarter net profit attributable to parent companies was about 36.8361 million yuan, up 59.11% year-on-year and up 320% quarter-on-quarter; Kabaiyi's third-quarter net profit was about 37.4147 million yuan, up 285.7% quarter-on-quarter; Asia-Pacific Machinery's third-quarter net profit was about 162 million yuan, up 28.5% quarter-on-quarter and up 26.8% year-on-year; Tiancheng Auto Control's third-quarter net profit was about 32.6039 million yuan, up 27.9% quarter-on-quarter. Asia-Pacific Machinery's first three quarters revenue was 4.138 billion yuan, up 4.14% year-on-year, and net profit attributable to parent companies was 430 million yuan, up 31% year-on-year.

Lianming Co.'s first three quarters revenue was 701 million yuan, up 18.33% year-on-year, and net profit attributable to parent companies was 90.1563 million yuan, up 54.34% year-on-year, of which third-quarter single-quarter revenue was 269 million yuan, up 22.01% year-on-year, and single-quarter net profit rose 97.50% year-on-year. Haili Co.'s third quarter achieved operating revenue of 4.316 billion yuan, up 6.24% year-on-year, and non-recurring net profit of 59.6491 million yuan, up 360.13% year-on-year. Among the top tier, Luxshare Precision's third-quarter single-quarter net profit attributable to parent companies reached 5.214 billion yuan, and Huayu Automotive's single-quarter figure was 1.687 billion yuan, both showing the profit resilience of leaders.

Company divergence: leader concentration and tail-end clearing coexist

(1) Scale ranking: Luxshare Precision and Huayu Automotive lead by a wide margin

In the first three quarters, the top ten companies by operating revenue had combined revenue of 689.235 billion yuan, accounting for 55.3% of the sample total. Luxshare Precision ranked first with 285.012 billion yuan in revenue (up 29.0% year-on-year), Huayu Automotive was second with 129.468 billion yuan, and Lens Technology, Universal Scientific Industrial, and Joyson Electronics ranked third through fifth.

Concentration on the profit side is even higher. Luxshare Precision's net profit attributable to parent companies in the first three quarters was 13.057 billion yuan (up 13.4% year-on-year), with this one company accounting for 26.0% of the sample's total net profit; Huayu Automotive was second with 4.334 billion yuan (down 7.5% year-on-year). Saiwei Electronics ranked third with book net profit of 1.856 billion yuan, but this mainly came from non-recurring gains and losses, and its non-recurring net profit was negative.

The companies with the highest revenue growth showed two types of drivers: first, business volume expansion, such as Xingyun Technology, whose revenue rose from 59 million yuan to 1.175 billion yuan, up 1,896.7% year-on-year, and whose net profit attributable to parent companies was 269 million yuan, turning a loss into a profit; second, consolidation-driven expansion, such as Qingdao Doublestar, whose revenue rose from 3.492 billion yuan to 20.882 billion yuan, up 498.0% year-on-year, and Bohai Automotive, whose revenue was 6.082 billion yuan, up 156.9% year-on-year, but Qingdao Doublestar's net profit attributable to parent companies was only 5 million yuan and its non-recurring net profit remained a loss, so the expansion has not yet translated into profitability.

On the net profit growth ranking, Ningbo Huaxiang topped the list with a year-on-year increase of 957.3% (net profit attributable to parent companies rose from 89 million yuan to 938 million yuan). Information shows that after divesting loss-making European businesses in the first half of 2026, Ningbo Huaxiang's profitability was significantly restored, with first-half net profit attributable to parent companies of 723 million yuan, up 293.60% year-on-year; the first phase of its PEEK material production line, with 4,000 tons, began trial production in March 2026; its robotics platform supplied 1,800 complete machines and more than 100,000 joint modules in the first half of the year, and it is advancing a 2.921 billion yuan private placement.

In addition, Dongfeng Technology's net profit rose 443.0% year-on-year, Kingsignal grew 211.5%, Anjie Technology grew 169.1%, Megmeet had revenue of 9.036 billion yuan, up 33.0% year-on-year, and net profit of 462 million yuan, up 117.3% year-on-year, and Hongban Technology had net profit of 860 million yuan, up 108.2% year-on-year, forming the first tier of profit growth in the sector.

(3) Loss-making and drag camp: display panels and the optics track are under the deepest pressure

Among the 47 loss-making companies, Visionox ranked first with a loss of 2.431 billion yuan in the first three quarters, its gross profit margin was -6.20%, and revenue fell 1.6% year-on-year; NavInfo lost 816 million yuan, Lianchuang Electronics lost 712 million yuan (net profit down 1,498.1% year-on-year, revenue down 32.8%), and TPV Technology lost 596 million yuan. In terms of the amount of year-on-year profit decrease, Lens Technology's net profit decreased by 1.423 billion yuan year-on-year (to 1.420 billion yuan, down 50.1% year-on-year), United Power turned from profit to loss (-47 million yuan), and Visionox and Lianchuang Electronics saw their losses expand year-on-year, constituting the main drags on the sector's profit decline.

Tail risks also warrant vigilance. Information shows that Wanliyang's net profit attributable to parent companies in the first three quarters was only 3.0015 million yuan, down 99.12% year-on-year, and its non-recurring net profit was a loss of 31.791 million yuan (a profit of 232 million yuan in the same period last year); in the third quarter alone it lost 67.3387 million yuan, and its gross profit margin plunged from 17.1% to 4.58%; Yibin Technology lost 225 million yuan in the first three quarters; Jingduan Technology lost 47.8477 million yuan, and its net operating cash flow fell 80.88% year-on-year. Cases of "double kill in revenue and profit" such as Jingduan Technology and Wanliyang reflect the vulnerability of some traditional parts companies under the dual pressure of price wars and transformation investment.

R&D investment rose 11% against the trend to 60.896 billion yuan

The sector's weighted gross profit margin was 15.95%, down 0.45 percentage points year-on-year, and further fell to 15.68% in the third quarter alone. High-margin targets are concentrated in testing, equipment, and intelligent software segments: Jiaocheng Ultrasound had a gross profit margin of 62.53%, Yisiwei 60.57%, and Huace Navigation 59.98%. The low-margin camp is concentrated in consumer electronics contract manufacturers and display panel companies, such as Universal Scientific Industrial at 8.85%, TPV Technology at 8.89%, and Visionox at -6.20%.

R&D investment maintained counter-trend growth. In the first three quarters, the sample's total R&D expenses were 60.896 billion yuan, up 11.00% year-on-year, faster than revenue growth (10.80%); R&D intensity was 4.89%. The top ten companies by R&D expenses invested a combined 28.019 billion yuan, accounting for 46.0% of the sector total. Luxshare Precision ranked first with 10.550 billion yuan in R&D expenses (R&D intensity 3.70%), Huayu Automotive was second with 5.018 billion yuan, Joyson Electronics third with 2.608 billion yuan, Lens Technology fourth with 2.435 billion yuan, and Desay SV fifth with 1.970 billion yuan; Universal Scientific Industrial was sixth with 1.251 billion yuan, Tuopu Group seventh with 1.221 billion yuan, United Power eighth with 1.018 billion yuan, Megmeet ninth with 981 million yuan, and TPV Technology tenth with 969 million yuan; Desay SV's R&D intensity was 8.07%, Megmeet's 10.86%, Visionox's 14.19%, and NavInfo's 25.06%, showing that R&D intensity in the intelligent and electrification tracks is significantly higher than in traditional segments.

The industrial backdrop for high R&D investment is the escalation of supply chain competition. Industry observations note that DRAM spot prices surged by about 450% cumulatively from September 2025 to January 2026, automotive electronics and AI data centers are competing for memory chip supply, the memory chip shortage is expected to last until 2027, and companies in the automotive industry chain face the dual test of raw material costs and supply security.

Both inventory and accounts receivable rose, hinting at operational risks

As of the end of the third quarter, the sample companies' total assets stood at 2,242.307 billion yuan, with an average debt-to-asset ratio of 44.47% (median 44.22%). Overall leverage is manageable, but a few companies carry relatively high leverage; Zowee Technology's debt-to-asset ratio reached 96.64%.

Two forward-looking indicators on the operating side warrant close attention:

First, total inventory was 336.325 billion yuan, up 25.34% year on year, 2.3 times the revenue growth rate (10.80%). This may reflect companies stocking up for orders in hand and building inventory for the switch to new energy vehicle models, but it also implies destocking risk.

Second, total accounts receivable were 414.893 billion yuan, up 13.25% year on year, and pressure on collection cycles is still accumulating. At the cash flow level, industry cases show that Wanxiang Qianchao's net operating cash flow shrank by about 70% in the first three quarters, while Jingduan Technology's net operating cash flow fell 80.88% year on year; the phenomenon of "profits but no cash" is spreading among tail-end companies.

Performance attribution: triple squeeze and structural support

First, cost-side squeeze. Industry costs are growing faster than revenue: from January to September, automotive industry revenue grew 2.6% while costs grew 3.8%; sharp price increases in upstream raw materials such as memory chips directly eroded gross margins in the automotive electronics segment.

Second, price-side squeeze. By the end of the first quarter of 2026, more than 16 mainstream automakers and nearly 70 models had cut prices across the board. New energy vehicles were discounted by an average of 38,000 yuan, a reduction of 13.7%, while fuel vehicles saw an average reduction of 14.3%. In January and February, automotive industry profit plunged 30% year on year, with a profit margin of only 2.9%; price cuts for complete vehicles were passed upstream along the industrial chain, and "continuous downstream price pressure" became a high-frequency phrase in third-quarter reports.

Third, demand-side volatility. In the first three quarters, domestic vehicle sales were 15.066 million units, down 22.4% year on year, while exports were 8.205 million units, up 65.8% year on year. On a passenger vehicle basis, retail sales in the first three quarters were 13.334 million units, down 21.7% year on year, while exports were 7.017 million units, up 75.4% year on year. In September, the retail penetration rate of new energy vehicles reached a record high of 67.0%. The "two new" policies front-loaded about 5 million units of demand; domestic demand is shifting gears while exports remain highly prosperous, and the market structure is undergoing drastic changes. In addition, the industry ecosystem continues to clear out, with more than 1,800 authorized dealer stores suspending operations or exiting the network in the first half of the year.

Structural support is also clear. In the first three quarters, new energy vehicle production and sales were 12.483 million and 12.472 million units, respectively, both up about 11% year on year, accounting for 53.6% of the total; the increase in per-vehicle value of new energy and intelligent features drove revenue expansion in segments such as automotive electronics, lightweighting, and thermal management, which is the core driver behind the sample's double-digit revenue growth.

Transformation direction: the second growth curve begins to take shape

Profit pressure is accelerating industrial transformation. According to incomplete statistics, more than 30 listed auto parts companies have announced moves into the robotics track, but achieving mass production remains a common challenge. The Soochow Securities automotive team believes that in 2026 the beta of the auto parts sector will be generally weak, with structural opportunities superior to aggregate opportunities, and that robotics, liquid cooling, and AIDC power shortages are the three new main lines. At the implementation level, Ningbo Huaxiang's robot joint modules supplied more than 100,000 units in the first half of the year; Desay SV's newly added project orders in the first half had an annualized sales value of more than 22 billion yuan, up 20% year on year, ranking 54th among the world's top 100 automotive parts suppliers; and Joyson Electronics newly won about 44.9 billion yuan in full-lifecycle orders in the first half, ranking 29th globally. Leading companies are leveraging order and R&D barriers to seek incremental growth in robotics, intelligent driving, and energy management, which is the most certain transformation path against the backdrop of sector divergence.