Zhe Jiang Kangsheng Co. Ltd. – Q3 2025 Performance and Market Dynamics

Zhe Jiang Kangsheng Co. Ltd. (股票代码 002418) has delivered a decisive turnaround in the first nine months of 2025, with net profit reaching ¥13.8328 million—a swing from a ¥9.8657 million loss in the same period last year. Revenue rose 12.43 % to ¥1.934 billion, driven largely by the firm’s core business of steel and aluminum cooling tubes, refrigerator parts, and air‑conditioner components. The company’s operating margin, though still modest, has improved markedly, signaling a strengthening of its cost structure and pricing power.

Financial Highlights

• The company’s inventory turnover of 10.21 times per year reflects a robust ability to convert stock into sales, a key liquidity lever in the materials sector.
• Cash‑flow from operations remains negative, underscoring the need for continued working‑capital optimization despite improving sales.

Shareholder Activity

In the latest shareholder register, three new institutional holders entered the top‑ten list:

• Xia Yirong – 3.00 million shares (0.26 % of free float)
• UBS AG – 2.895 million shares (0.25 %)
• Goldman Sachs (Ltd.) – 2.831 million shares (0.25 %)

Conversely, three former holders exited the top‑ten: Luyageng, Yehaiteng, and Zeng Zhenghong. The departures reduced their holdings by 0.51 %, 0.32 %, and 0.32 % respectively, indicating a possible shift in confidence among existing shareholders.

The inflow of global banks and asset managers suggests that the stock has begun to attract institutional attention, likely driven by its recent earnings turnaround and the broader bullish sentiment in the “liquid cooling” and “computational power” segments.

Market Context and Catalyst

The day following the earnings release, the “computational power” sector surged, with several key names hitting limit‑up:

• Kangsheng Co. Ltd. – limit‑up at 10:45 GMT
• Hualong Science & Technology – 6 % rise
• Jingjia Micro – 8 % rise

This rally was fueled by a high‑profile collaboration between Microsoft and OpenAI and Nvidia’s aggressive product announcements, which have amplified demand for high‑performance cooling solutions—an area where Kangsheng’s product portfolio is positioned. The company’s cooling tubes and liquid‑cooling server components are integral to data‑center infrastructure, thus aligning directly with the AI and GPU market expansion.

Additionally, the hydrogen energy theme gained traction on 29 Oct, with several hydrogen‑related stocks hitting limits. While Kangsheng is not a hydrogen producer, its supply chain involvement in refrigeration and air‑conditioning parts for energy‑efficient systems places it within a broader green‑technology narrative that investors are increasingly monitoring.

Forward Outlook

• Revenue Growth: The firm’s recent 12 % YoY rise suggests that the demand for cooling tubes will likely continue, especially as data‑center deployment accelerates.
• Profitability: While the current EPS remains modest, the company’s turnaround points to potential for earnings expansion if operational efficiencies are maintained.
• Capital Allocation: The negative operating cash flow warrants scrutiny; however, the inflow of institutional capital may provide the liquidity buffer needed to fund working capital and possible R&D investments.
• Sector Momentum: The AI and high‑performance computing boom is likely to sustain upward pressure on liquid‑cooling components, providing a tailwind for Kangsheng’s core product lines.

In summary, Zhe Jiang Kangsheng Co. Ltd. has successfully navigated a pivotal earnings turnaround, captured institutional interest, and positioned itself advantageously within an expanding high‑tech infrastructure ecosystem. The confluence of a robust Q3 performance, a supportive sectoral environment, and renewed institutional backing bodes well for the company’s near‑term valuation trajectory.