Zhuzhou CRRC Times Electric (SEHK:3898): Assessing Valuation After Strong 2025 Earnings and Major Supply Renewal

Zhuzhou CRRC Times Electric (SEHK:3898) just released earnings for the first nine months of 2025, posting increases in both sales and net income. Investors also learned of a renewed supply agreement with CRRC Group beginning in 2026.

See our latest analysis for Zhuzhou CRRC Times Electric.

After a choppy start to the year, Zhuzhou CRRC Times Electric’s 30.59% year-to-date share price return and 44.09% total return over twelve months reflect resurgent investor confidence. News of stronger financials and renewed supply ties appear to have boosted momentum for the stock over both short and long horizons.

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With shares still trading at a discount to analyst targets despite impressive growth and a high-profile supply renewal, the key question is whether Zhuzhou CRRC Times Electric is undervalued or if future gains are already priced in.

Price-to-Earnings of 12.9x: Is it justified?

Zhuzhou CRRC Times Electric is trading on a price-to-earnings (PE) ratio of 12.9x, which is below the average for its direct peers. Closing at HK$41.20, the market appears to be valuing the company more conservatively than comparable stocks in its sector.

The price-to-earnings ratio measures how much investors are willing to pay for each HK$1 of the company’s earnings. For an established capital goods manufacturer like Zhuzhou CRRC Times Electric, a lower PE suggests the stock is potentially undervalued, especially given its consistent profit growth.

While the peer group averages a PE of 16x, Zhuzhou CRRC Times Electric trades at a discount. However, when compared to its estimated fair PE ratio of 12.2x, the stock is slightly above that fair mark. This suggests that any future re-rating toward market or fair value could be limited.

Explore the SWS fair ratio for Zhuzhou CRRC Times Electric

Result: Price-to-Earnings of 12.9x (UNDERVALUED)

However, slowing revenue growth or changes in market sentiment could challenge Zhuzhou CRRC Times Electric’s current valuation and stall further gains.

Find out about the key risks to this Zhuzhou CRRC Times Electric narrative.

Another View: What Does the SWS DCF Model Say?

Looking from another angle, our DCF model suggests the story could be different. According to the SWS DCF model, Zhuzhou CRRC Times Electric’s current share price is more than 40% below its estimated fair value. This points to the potential for deeper undervaluation than what is indicated by multiples alone. However, can this model be trusted for future gains, or does it overlook risks that investors should consider?

Look into how the SWS DCF model arrives at its fair value.

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out Zhuzhou CRRC Times Electric for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover 870 undervalued stocks based on their cash flows. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.

Build Your Own Zhuzhou CRRC Times Electric Narrative

Don’t feel obligated to follow the consensus if you have your own perspective. The data is available for you to analyze and form your story in just a few minutes. Do it your way

A good starting point is our analysis highlighting 3 key rewards investors are optimistic about regarding Zhuzhou CRRC Times Electric.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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