# NARI Technology (600406.SHG)

Canonical: https://gigainvestors.com/s/600406.SHG

Analysis as of: 2026-10-16T07:34:26.835Z. Financial observations: FY2000–FY2025.

Listing currency: CNY. Reporting currency: CNY.

## Verdict

A wonderful business at a fair price

Quality tests for Buy: pass (profit record: pass; earnings resilience is evidence only). Published buy qualification: yes.

Share price: CNY 22.49 per share; close as of 2026-10-15.

Estimated value: low CNY 18.90 per share, central CNY 26.57 per share, high CNY 30.84 per share. Buy at or below the central value CNY 26.57 per share. Valuation as of 2026-10-16T07:34:26.835Z; scenarios are not confidence intervals.

Expected annual return: 11.3% at the stated quote. About 11.3% a year at today's price (required return 10.0%). required return 10.0% a year (10% floor; CN 10-year bond 1.7% + 4 points).

## Checklist

### understandable: pass

- 1 revenue decline in the last 10 years (informational)

- Financial history: 10 years

- Years with declining revenue: 1

- Years with a net loss: 0

- Operating margin variation: 0.09×

Chart: Operating margin; fiscal year observations.

- FY2016: 0.12×

- FY2017: 0.17×

- FY2018: 0.16×

- FY2019: 0.16×

- FY2020: 0.15×

- FY2021: 0.16×

- FY2022: 0.17×

- FY2023: 0.17×

- FY2024: 0.16×

- FY2025: 0.15×

### moat: pass

- ROIC, median of available years: 27.6%

- ROIC, second-lowest year: 22.5%

- Typical minus recent gross margin: 0.9 pp

- Typical gross margin (annual median): 26.7%

- Recent gross margin (lower of latest and 3-year median): 25.8%

- Years with nonpositive capital: 0

- Capital spending / revenue: 4.8%

- ROIC including acquisitions, ten-year median: 22.2%

Chart: ROIC excluding acquisitions; fiscal year observations.

- FY2016: 71.6%

- FY2017: 34.2%

- FY2018: 18.2%

- FY2019: 23.4%

- FY2020: 22.5%

- FY2021: 23.6%

- FY2022: 25.1%

- FY2023: 30.1%

- FY2024: 32.5%

- FY2025: 30.5%

### economics: pass

- Owner earnings / net income, 5-yr: 0.98×

- Cash conversion uses consolidated totals: No

- Owner earnings, five-year total: CNY 34B

- Net income, five-year total: CNY 35B

- Return on incremental invested capital: 36.5%

- Working capital / revenue, annual change: -1.0 pp

- Working capital / revenue, change between three-year averages: -8.7 pp

- Working capital / revenue, final three-year average: 26.8%

Chart: Annual owner cash / profit; fiscal year observations.

- FY2021: 1.00×

- FY2022: 0.88×

- FY2023: 1.00×

- FY2024: 1.00×

- FY2025: 1.00×

### management: pass

- Historical market-dollar context (not the management verdict): 2016 to 2025 (9 years)

- buybacks leaned toward cheaper years (informational)

- ROIC first 3 years vs last 3 years: 34.2% vs 30.5%

- Per-share earnings: 0.33 to 0.95 (three-year endpoint medians)

- Management verdict uses per-share economic progress: Yes

- Ordinary dilution, 10-year annual growth: 7.4%

- Ordinary dilution, 5-year annual growth: 0.4%

- Market cap gain: CNY 29B

- Cumulative retained earnings: CNY 30B

- Diluted shares, 10-year annual growth: 7.4%

- Diluted shares, 5-year annual growth: 0.4%

- $1 test, starting fiscal year: FY2016

- $1 test, ending fiscal year: FY2025

- Per-share value growth: 14.0%

- Per-share value change: CNY 0.62

- Per-share value, starting three-year median: CNY 0.33

- Per-share value, ending three-year median: CNY 0.95

- Buybacks concentrated in cheaper years (correlation): 0.18

- Average buyback yield: 0.1%

- Buyback history: 7 years

- Debt-funded buybacks: No

- Acquisition spending: CNY 1.8B

- Cumulative net income, 10 years: CNY 53B

- ROIC, first three-year median: 34.2%

- ROIC, last three-year median: 30.5%

Chart: Earnings per share; fiscal year observations.

- FY2016: CNY 0.09

- FY2017: CNY 0.45

- FY2018: CNY 0.53

- FY2019: CNY 0.53

- FY2020: CNY 0.62

- FY2021: CNY 0.71

- FY2022: CNY 0.81

- FY2023: CNY 0.90

- FY2024: CNY 0.95

- FY2025: CNY 1.04

### accounting: pass

- Sloan accruals: -4.6%

- Receivables to sales index (DSRI): 0.77×

- Restructuring years, last five: 0

- Earnings backed by cash: Yes

- Operating cash / earnings: 1.54×

- Accounting red flags: 0

- Goodwill and intangibles / equity: 0.04×

Chart: Sloan accruals; fiscal year observations.

- FY2016: -2.2%

- FY2017: -0.1%

- FY2018: 1.8%

- FY2019: -0.6%

- FY2020: -1.2%

- FY2021: 1.3%

- FY2022: -3.0%

- FY2023: -4.9%

- FY2024: -3.7%

- FY2025: -4.6%

## Holders

## Price story

Down 22% since Nov 2021 · sales +15.3%

Story as of 2026-10-16T10:00:00.611Z; price observation 2026-10-15.

Price needs cash profits to grow 5.2% a year for ten years

### Sales · FY2024–2025

sales +15.3%; source https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/; observed 2026-10-16.

- FY2016: CNY 28B 

- FY2017: CNY 24B 

- FY2018: CNY 29B 

- FY2019: CNY 32B 

- FY2020: CNY 39B 

- FY2021: CNY 42B 

- FY2022: CNY 47B 

- FY2023: CNY 52B 

- FY2024: CNY 57B 

- FY2025: CNY 66B 

### Gross margin · FY2025

gross margin 25.8%; source https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/; observed 2026-10-16.

- FY2016: 24.5% 

- FY2017: 30.0% 

- FY2018: 28.6% 

- FY2019: 28.4% 

- FY2020: 26.2% 

- FY2021: 26.7% 

- FY2022: 26.8% 

- FY2023: 26.7% 

- FY2024: 26.5% 

- FY2025: 25.8% 

## Owner memo

Memo as of 2026-10-16T08:06:05.509Z.

### How it makes money

Operates in electrical equipment & parts; annual sales are CNY 66.2 billion.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:34:26.835Z); FY2025: revenue 66228963223.21; grossProfit 17111639370.62; margin = grossProfit / revenue.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16); 600406.SHG: NARI Technology Co., Ltd., together with its subsidiaries, provides power intelligence solutions in China and internationally. It offers intelligent control; smart power generation, and transmission; smart substation; intelligent power distribution; smart electricity consumption; information and communications; comprehensive energy; intelligent operation and maintenance; industrial control; municipal environmental protection;  industrial automation; rail transit; and water conservancy and water affairs solutions. The company was founded in 2001 and is headquartered in Nanjing, China. NARI Technology Co., Ltd. operates as a subsidiary of NARI Group Corporation.

### Why customers stay

Margins ranged from 25.8% to 26.7% during 2023–25; it earns 27.6% on its capital.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:34:26.835Z); FY2023: grossProfit / revenue = 26.7%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:34:26.835Z); FY2024: grossProfit / revenue = 26.5%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:34:26.835Z); FY2025: grossProfit / revenue = 25.8%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:34:26.835Z); 10-year return on capital observations [[2016,0.7164957414301881],[2017,0.3420205749076648],[2018,0.18239849097413566],[2019,0.23426665238525057],[2020,0.22545756043315632],[2021,0.23596132727233224],[2022,0.2508551695482431],[2023,0.30059209988351726],[2024,0.3252386524410948],[2025,0.3054381930008019]]; median 0.2757236347158802. ROIC follows the displayed moat series; financial companies use return on tangible equity.

### Can it raise prices

Kept about a 27% gross margin through 2022 cost inflation.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:34:26.835Z); Gross margin observations: [[2021,0.2668509144336045],[2022,0.2675140382673005],[2023,0.26697852655745646]]; range within 2 percentage points.

### Where the cash goes

Spends 11.1% of cash earnings on expansion; earns 36.5% on new investment.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:34:26.835Z); FY2016: growth capex 0; upkeep 93027617.79; owner earnings 1848048929.21. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:34:26.835Z); FY2017: growth capex 0; upkeep 1195496629.87; owner earnings 2578542933.13. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:34:26.835Z); FY2018: growth capex 610484165.4516063; upkeep 1103472943.1683936; owner earnings 3607265128.8316064. Growth capex / owner earnings = 0.1692373983193584.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:34:26.835Z); FY2019: growth capex 759322037.0554857; upkeep 2169769951.0945144; owner earnings 2952081588.9054856. Growth capex / owner earnings = 0.257215803218031.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:34:26.835Z); FY2020: growth capex 1480370928.0548003; upkeep 1983644282.2252; owner earnings 3991938429.7748003. Growth capex / owner earnings = 0.3708401204319961.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:34:26.835Z); FY2021: growth capex 742096641.3599999; upkeep 1274298000; owner earnings 5637672924.872. Growth capex / owner earnings = 0.1316317301924444.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:34:26.835Z); FY2022: growth capex 1289333407.1005971; upkeep 2125859751.2694027; owner earnings 5656628903.798597. Growth capex / owner earnings = 0.2279331787586014.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:34:26.835Z); FY2023: growth capex 306680840.9100001; upkeep 1644711000; owner earnings 7173797859.442. Growth capex / owner earnings = 0.042750136945433066.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:34:26.835Z); FY2024: growth capex 278415443; upkeep 1553336000; owner earnings 7607487872.18. Growth capex / owner earnings = 0.03659755331561473.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:34:26.835Z); FY2025: growth capex 918686418.6699998; upkeep 1191668503.43; owner earnings 8277166966.587999. Growth capex / owner earnings = 0.11099044182368346.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:34:26.835Z); Incremental return on capital 0.3648873637772809, from the economics test's unchanged annual inputs.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:34:26.835Z); Dividend observations: [[2016,659137880.62],[2017,2512021043.95],[2018,2483614282.16],[2019,1710171570],[2020,1340186296],[2021,1940925570],[2022,2287234980],[2023,2649224960],[2024,5425349351],[2025,4668762783.01]]. Zero only counted when supported by a complete cash-flow statement.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:34:26.835Z); FY2025: cash repurchases 1132733984.1691089 CNY.

### Are managers owners

Insiders own 61.4% of the company.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16); 600406.SHG SharesStats.PercentInsiders = 61.363 percentage points; cache date 2026-10-16.

### What the price says

The price assumes cash profits grow 5.2% yearly over ten years; actual growth was 12.2%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:34:26.835Z); Ten-year compound average after fade. Initial solved rate 0.07438327125871752. Price 22.49; FX 1; discount 0.1; same compounder ten-year fade to terminal 0.03. FY2015 owner earnings/share 0.3283290910475729 → FY2025 1.0397732874195493. Closing-price date 2026-10-15.

## Monthly share-price history (CNY per share)

- 2016-11: CNY 8.95 per share

- 2016-12: CNY 9.62 per share

- 2017-01: CNY 9.62 per share

- 2017-02: CNY 9.62 per share

- 2017-03: CNY 9.62 per share

- 2017-04: CNY 9.62 per share

- 2017-05: CNY 9.62 per share

- 2017-06: CNY 10.21 per share

- 2017-07: CNY 10.07 per share

- 2017-08: CNY 9.79 per share

- 2017-09: CNY 9.56 per share

- 2017-10: CNY 9.79 per share

- 2017-11: CNY 10.97 per share

- 2017-12: CNY 10.58 per share

- 2018-01: CNY 9.80 per share

- 2018-02: CNY 9.39 per share

- 2018-03: CNY 9.73 per share

- 2018-04: CNY 10.01 per share

- 2018-05: CNY 9.88 per share

- 2018-06: CNY 9.14 per share

- 2018-07: CNY 9.20 per share

- 2018-08: CNY 9.30 per share

- 2018-09: CNY 10.21 per share

- 2018-10: CNY 10.04 per share

- 2018-11: CNY 10.17 per share

- 2018-12: CNY 10.72 per share

- 2019-01: CNY 11.08 per share

- 2019-02: CNY 10.69 per share

- 2019-03: CNY 12.22 per share

- 2019-04: CNY 11.53 per share

- 2019-05: CNY 10.59 per share

- 2019-06: CNY 10.79 per share

- 2019-07: CNY 10.91 per share

- 2019-08: CNY 10.01 per share

- 2019-09: CNY 11.83 per share

- 2019-10: CNY 12.70 per share

- 2019-11: CNY 13.29 per share

- 2019-12: CNY 12.26 per share

- 2020-01: CNY 10.52 per share

- 2020-02: CNY 11.48 per share

- 2020-03: CNY 11.43 per share

- 2020-04: CNY 11.63 per share

- 2020-05: CNY 10.71 per share

- 2020-06: CNY 11.72 per share

- 2020-07: CNY 12.30 per share

- 2020-08: CNY 12.96 per share

- 2020-09: CNY 11.41 per share

- 2020-10: CNY 12.01 per share

- 2020-11: CNY 13.65 per share

- 2020-12: CNY 15.38 per share

- 2021-01: CNY 17.03 per share

- 2021-02: CNY 16.43 per share

- 2021-03: CNY 18.02 per share

- 2021-04: CNY 18.51 per share

- 2021-05: CNY 18.00 per share

- 2021-06: CNY 16.14 per share

- 2021-07: CNY 21.78 per share

- 2021-08: CNY 24.31 per share

- 2021-09: CNY 24.94 per share

- 2021-10: CNY 27.03 per share

- 2021-11: CNY 28.76 per share

- 2021-12: CNY 27.80 per share

- 2022-01: CNY 24.31 per share

- 2022-02: CNY 24.55 per share

- 2022-03: CNY 21.87 per share

- 2022-04: CNY 22.22 per share

- 2022-05: CNY 23.78 per share

- 2022-06: CNY 22.50 per share

- 2022-07: CNY 24.32 per share

- 2022-08: CNY 22.88 per share

- 2022-09: CNY 20.73 per share

- 2022-10: CNY 20.33 per share

- 2022-11: CNY 22.14 per share

- 2022-12: CNY 20.33 per share

- 2023-01: CNY 21.99 per share

- 2023-02: CNY 21.88 per share

- 2023-03: CNY 22.59 per share

- 2023-04: CNY 21.77 per share

- 2023-05: CNY 22.87 per share

- 2023-06: CNY 23.10 per share

- 2023-07: CNY 24.32 per share

- 2023-08: CNY 23.82 per share

- 2023-09: CNY 22.19 per share

- 2023-10: CNY 22.55 per share

- 2023-11: CNY 22.01 per share

- 2023-12: CNY 22.32 per share

- 2024-01: CNY 21.01 per share

- 2024-02: CNY 23.18 per share

- 2024-03: CNY 24.34 per share

- 2024-04: CNY 23.54 per share

- 2024-05: CNY 22.51 per share

- 2024-06: CNY 24.96 per share

- 2024-07: CNY 24.02 per share

- 2024-08: CNY 24.62 per share

- 2024-09: CNY 27.67 per share

- 2024-10: CNY 25.96 per share

- 2024-11: CNY 24.68 per share

- 2024-12: CNY 25.22 per share

- 2025-01: CNY 23.08 per share

- 2025-02: CNY 23.45 per share

- 2025-03: CNY 21.90 per share

- 2025-04: CNY 22.15 per share

- 2025-05: CNY 22.19 per share

- 2025-06: CNY 22.41 per share

- 2025-07: CNY 21.88 per share

- 2025-08: CNY 21.75 per share

- 2025-09: CNY 22.96 per share

- 2025-10: CNY 24.23 per share

- 2025-11: CNY 22.16 per share

- 2025-12: CNY 22.48 per share

- 2026-01: CNY 25.20 per share

- 2026-02: CNY 27.30 per share

- 2026-03: CNY 25.99 per share

- 2026-04: CNY 25.97 per share

- 2026-05: CNY 24.90 per share

- 2026-06: CNY 22.85 per share

- 2026-07: CNY 24.35 per share

- 2026-08: CNY 22.97 per share

- 2026-09: CNY 22.52 per share

- 2026-10: CNY 22.36 per share

## Annual estimated value (CNY per share)

- FY2016: low CNY 3.51 per share, central CNY 4.90 per share, high CNY 5.71 per share

- FY2017: low CNY 7.15 per share, central CNY 9.72 per share, high CNY 11.21 per share

- FY2018: low CNY 7.57 per share, central CNY 10.63 per share, high CNY 12.34 per share

- FY2019: low CNY 7.47 per share, central CNY 10.25 per share, high CNY 11.81 per share

- FY2020: low CNY 9.06 per share, central CNY 12.46 per share, high CNY 14.36 per share

- FY2021: low CNY 9.93 per share, central CNY 13.73 per share, high CNY 15.85 per share

- FY2022: low CNY 12.28 per share, central CNY 17.01 per share, high CNY 19.65 per share

- FY2023: low CNY 13.35 per share, central CNY 17.30 per share, high CNY 19.83 per share

- FY2024: low CNY 16.74 per share, central CNY 23.06 per share, high CNY 26.59 per share

- FY2025: low CNY 18.92 per share, central CNY 26.26 per share, high CNY 30.36 per share

Historical values use today's bond yield for every fiscal year

Historical values use today's FX rate into trading currency for every fiscal year

Historical values use current restated fundamentals and current commodity classification; they are not point-in-time estimates

## Sources

Estimates depend on assumptions and are not guarantees or investment advice. Underlying data remains subject to its source licenses; public reading does not grant bulk redistribution rights.