# Dongfang Electric (600875.SHG)

Canonical: https://gigainvestors.com/s/600875.SHG

Analysis as of: 2026-10-01T09:06:01.669Z. Financial observations: FY1996–FY2025.

Listing currency: CNY. Reporting currency: CNY.

## Verdict

Not a wonderful business

Quality tests for Buy: not passed. Published buy qualification: no.

Share price: CNY 21.69 per share; close as of 2026-10-15.

Estimated value: low CNY 12.03 per share, central CNY 12.77 per share, high CNY 13.76 per share. Buy at or below the central value CNY 12.77 per share. Valuation as of 2026-10-01T09:06:01.669Z; scenarios are not confidence intervals.

Expected annual return: 5.8% at the stated quote. About 5.8% 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: fail

- 3 revenue declines in the last 10 years (informational)

- operating margin variation exceeds 0.35

- Financial history: 10 years

- Years with declining revenue: 3

- Years with a net loss: 1

- Operating margin variation: 0.83×

Chart: Operating margin; fiscal year observations.

- FY2016: -0.06×

- FY2017: 0.03×

- FY2018: 0.04×

- FY2019: 0.05×

- FY2020: 0.06×

- FY2021: 0.06×

- FY2022: 0.06×

- FY2023: 0.07×

- FY2024: 0.06×

- FY2025: 0.07×

### moat: fail

- Years with nonpositive invested capital use equity plus debt and leases; positive earnings with no positive capital are shown above 100%.

- ROIC worst years below threshold (more than 1 bad year allowed)

- ROIC, median of available years: 15.7%

- ROIC, second-lowest year: 3.8%

- Typical minus recent gross margin: 3.5 pp

- Years with nonpositive capital: 4

- Capital spending / revenue: 1.5%

- ROIC including acquisitions, ten-year median: 14.1%

Chart: ROIC excluding acquisitions; fiscal year observations.

- FY2016: -7.0%

- FY2017: 4.8%

- FY2018: 3.8%

- FY2019: 4.7%

- FY2020: 48.5%

- FY2021: 17.1%

- FY2022: 14.5%

- FY2023: 16.9%

- FY2024: 25.5%

- FY2025: 18.9%

### economics: fail

- owner earnings cash conversion below threshold

- Owner earnings / net income, 5-yr: 0.78×

- Cash conversion uses consolidated totals: No

- Owner earnings, five-year total: CNY 12B

- Net income, five-year total: CNY 15B

- Return on incremental invested capital: >100%

- Working capital / revenue, annual change: -9.3 pp

- Working capital / revenue, change between three-year averages: -68.3 pp

- Working capital / revenue, final three-year average: 14.6%

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

- FY2021: 1.01×

- FY2022: 0.99×

- FY2023: 0.99×

- FY2024: 0.60×

- FY2025: 0.45×

### management: fail

- $1 retained earnings test: 2016 to 2025 (9 years)

- buybacks unrelated to price (informational)

- ROIC first 3 years vs last 3 years: 3.8% vs 18.9%

- five-year and ten-year diluted share growth both above threshold

- Market cap gain: CNY 59B

- Cumulative retained earnings: CNY 16B

- Diluted shares, 10-year annual growth: 4.6%

- Diluted shares, 5-year annual growth: 1.4%

- $1 test, starting fiscal year: FY2016

- $1 test, ending fiscal year: FY2025

- Per-share value growth: 23.9%

- Per-share value change: CNY 0.91

- Per-share value, starting three-year median: CNY 0.20

- Per-share value, ending three-year median: CNY 1.11

- Buyback history: 0 years

- Debt-funded buybacks: No

- Acquisition spending: CNY 1.3B

- Cumulative net income, 10 years: CNY 19B

- ROIC, first three-year median: 3.8%

- ROIC, last three-year median: 18.9%

### accounting: pass

- Sloan accruals: 1.1%

- Receivables to sales index (DSRI): 0.39×

- Restructuring years, last five: 0

- Earnings backed by cash: Yes

- Operating cash / earnings: 0.53×

- Accounting red flags: 0

- Goodwill and intangibles / equity: 0.04×

Chart: Sloan accruals; fiscal year observations.

- FY2016: -12.7%

- FY2017: -1.0%

- FY2018: 1.8%

- FY2019: 1.2%

- FY2020: 4.7%

- FY2021: 6.5%

- FY2022: -4.8%

- FY2023: 5.8%

- FY2024: -5.0%

- FY2025: 1.1%

## Holders

## Price story

Down 41% since Apr 2026 · sales +14.6%

Story as of 2026-10-03T17:10:00Z; price observation 2026-09-30.

Price needs cash profits to grow 13.3% a year for ten years

### Sales · FY2024–2025

sales +14.6%; source https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/; observed 2026-10-01.

- FY2016: CNY 33B 

- FY2017: CNY 33B 

- FY2018: CNY 30B 

- FY2019: CNY 32B 

- FY2020: CNY 36B 

- FY2021: CNY 47B 

- FY2022: CNY 54B 

- FY2023: CNY 60B 

- FY2024: CNY 69B 

- FY2025: CNY 79B 

### Gross margin · FY2025

gross margin 17%; source https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/; observed 2026-10-01.

- FY2016: 7.8% 

- FY2017: 15.7% 

- FY2018: 18.1% 

- FY2019: 18.0% 

- FY2020: 18.4% 

- FY2021: 15.9% 

- FY2022: 15.4% 

- FY2023: 14.7% 

- FY2024: 12.8% 

- FY2025: 17.0% 

## Owner memo

Memo as of 2026-10-02T06:52:09.009Z.

### How it makes money

Operates in specialty industrial machinery; annual sales are CNY 78.6 billion.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-01T09:06:01.669Z); FY2025: revenue 78615277439.83; grossProfit 13400020600.93; margin = grossProfit / revenue.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-02); 600875.SHG: Dongfang Electric Corporation Limited engages in the design, development, manufacture, and sale of power generation equipment in China and internationally. The company operates in five segments: Renewable Energy Equipment, High-Efficient Clean Energy Equipment, Engineering and Supply Chain, Modern Manufacturing Services Business, and Emerging Growth Industries. It offers power generation equipment for wind, solar, hydro, nuclear, gas, and thermal power, including hydro-generating units, steam turbine generators, wind power units, power station steam turbines, and power station boilers. The company also provides engineering contracting and services to global energy operators; trade and logistics services; chemical containers; energy-saving and environmental protection equipment; power electronics and control systems; and hydrogen energy equipment. In addition, it offers science and technology promotion and application services, heat production, and research and experimental development services, as well as power generators, generating sets, and general equipment. The company was formerly known as Dongfang Electric Machinery Co., Ltd. and changed its name to Dongfang Electric Corporation Limited in January 2008. The company was founded in 1958 and is headquartered in Chengdu, the People's Republic of China. Dongfang Electric Corporation Limited operates as a subsidiary of Dongfang Electric Corporation.

### Why customers stay

Margins ranged from 12.8% to 17% during 2023–25; it earns 15.7% on its capital.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-01T09:06:01.669Z); FY2023: grossProfit / revenue = 14.7%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-01T09:06:01.669Z); FY2024: grossProfit / revenue = 12.8%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-01T09:06:01.669Z); FY2025: grossProfit / revenue = 17%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-01T09:06:01.669Z); 10-year return on capital observations [[2016,-0.06966006656442596],[2017,0.04808812293187162],[2018,0.03838031963927555],[2019,0.046670460473533244],[2020,0.48494141994313306],[2021,0.171166070862786],[2022,0.1448815584974985],[2023,0.16927972326048896],[2024,0.25504609301506],[2025,0.1885585464535264]]; median 0.15708064087899373. ROIC follows the displayed moat series; financial companies use return on tangible equity.

### Where the cash goes

Spends 62.9% of cash earnings on expansion; paid dividends in 10 of 10 years.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-01T09:06:01.669Z); FY2017: growth capex 0; upkeep 209780813; owner earnings 1886096192. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-01T09:06:01.669Z); FY2018: growth capex 0; upkeep 184988467; owner earnings 1917486533. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-01T09:06:01.669Z); FY2019: growth capex 0; upkeep 642236879; owner earnings 1531224121. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-01T09:06:01.669Z); FY2020: growth capex 0; upkeep 541170872; owner earnings 2155503128. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-01T09:06:01.669Z); FY2021: growth capex 0; upkeep 717613671; owner earnings 2307709804.26. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-01T09:06:01.669Z); FY2022: growth capex 0; upkeep 748211198; owner earnings 2834795158.984. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-01T09:06:01.669Z); FY2023: growth capex 348815477; upkeep 761288000; owner earnings 3504396286.728. Growth capex / owner earnings = 0.09953653881013655.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-01T09:06:01.669Z); FY2024: growth capex 1059540196.0111847; upkeep 1939576803.9888153; owner earnings 1767478416.0511847. Growth capex / owner earnings = 0.5994642912688906.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-01T09:06:01.669Z); FY2025: growth capex 1074114324.8894138; upkeep 3210232346.2205863; owner earnings 1706849192.4754138. Growth capex / owner earnings = 0.6292965597807997.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-01T09:06:01.669Z); Dividend observations: [[2016,201025356],[2017,49008322],[2018,42098388],[2019,395892112],[2020,667786333],[2021,545052882],[2022,757361710],[2023,1089660431],[2024,1530556000],[2025,1456847124.17]]. Zero only counted when supported by a complete cash-flow statement.

### Are managers owners

Insiders own 58.7% of the company.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-02); 600875.SHG SharesStats.PercentInsiders = 58.742000000000004 percentage points; cache date 2026-10-02.

### What the price says

The price assumes cash profits grow 13.3% yearly over ten years; actual decline was 1%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-01T09:06:01.669Z); Ten-year compound average after fade. Initial solved rate 0.1791855841647264. Price 23.04; FX 1; discount 0.1; same standard ten-year fade to terminal 0.03. FY2015 owner earnings/share 0.5436950408106287 → FY2025 0.49354290600531525. Closing-price date 2026-09-30.

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

- 2016-10: CNY 9.72 per share

- 2016-11: CNY 10.25 per share

- 2016-12: CNY 10.79 per share

- 2017-01: CNY 10.79 per share

- 2017-02: CNY 10.79 per share

- 2017-03: CNY 10.03 per share

- 2017-04: CNY 9.50 per share

- 2017-05: CNY 9.38 per share

- 2017-06: CNY 9.58 per share

- 2017-07: CNY 10.57 per share

- 2017-08: CNY 10.70 per share

- 2017-09: CNY 10.43 per share

- 2017-10: CNY 10.79 per share

- 2017-11: CNY 10.51 per share

- 2017-12: CNY 11.23 per share

- 2018-01: CNY 11.52 per share

- 2018-02: CNY 9.49 per share

- 2018-03: CNY 9.03 per share

- 2018-04: CNY 8.87 per share

- 2018-05: CNY 8.60 per share

- 2018-06: CNY 7.41 per share

- 2018-07: CNY 7.49 per share

- 2018-08: CNY 7.15 per share

- 2018-09: CNY 7.78 per share

- 2018-10: CNY 7.22 per share

- 2018-11: CNY 7.62 per share

- 2018-12: CNY 7.89 per share

- 2019-01: CNY 9.26 per share

- 2019-02: CNY 9.86 per share

- 2019-03: CNY 10.61 per share

- 2019-04: CNY 11.96 per share

- 2019-05: CNY 10.30 per share

- 2019-06: CNY 10.62 per share

- 2019-07: CNY 10.16 per share

- 2019-08: CNY 9.39 per share

- 2019-09: CNY 9.21 per share

- 2019-10: CNY 8.84 per share

- 2019-11: CNY 8.89 per share

- 2019-12: CNY 9.19 per share

- 2020-01: CNY 8.88 per share

- 2020-02: CNY 9.25 per share

- 2020-03: CNY 8.44 per share

- 2020-04: CNY 8.61 per share

- 2020-05: CNY 8.76 per share

- 2020-06: CNY 8.85 per share

- 2020-07: CNY 10.36 per share

- 2020-08: CNY 10.01 per share

- 2020-09: CNY 10.16 per share

- 2020-10: CNY 10.60 per share

- 2020-11: CNY 10.62 per share

- 2020-12: CNY 9.97 per share

- 2021-01: CNY 12.48 per share

- 2021-02: CNY 11.85 per share

- 2021-03: CNY 12.71 per share

- 2021-04: CNY 11.39 per share

- 2021-05: CNY 11.20 per share

- 2021-06: CNY 10.97 per share

- 2021-07: CNY 11.65 per share

- 2021-08: CNY 15.83 per share

- 2021-09: CNY 18.30 per share

- 2021-10: CNY 18.15 per share

- 2021-11: CNY 20.40 per share

- 2021-12: CNY 21.42 per share

- 2022-01: CNY 17.15 per share

- 2022-02: CNY 16.26 per share

- 2022-03: CNY 13.56 per share

- 2022-04: CNY 12.62 per share

- 2022-05: CNY 13.98 per share

- 2022-06: CNY 16.45 per share

- 2022-07: CNY 17.31 per share

- 2022-08: CNY 19.70 per share

- 2022-09: CNY 20.44 per share

- 2022-10: CNY 23.21 per share

- 2022-11: CNY 24.16 per share

- 2022-12: CNY 21.02 per share

- 2023-01: CNY 21.38 per share

- 2023-02: CNY 19.73 per share

- 2023-03: CNY 18.96 per share

- 2023-04: CNY 17.42 per share

- 2023-05: CNY 18.00 per share

- 2023-06: CNY 18.65 per share

- 2023-07: CNY 19.24 per share

- 2023-08: CNY 16.78 per share

- 2023-09: CNY 15.64 per share

- 2023-10: CNY 14.90 per share

- 2023-11: CNY 14.57 per share

- 2023-12: CNY 14.62 per share

- 2024-01: CNY 14.35 per share

- 2024-02: CNY 16.35 per share

- 2024-03: CNY 15.75 per share

- 2024-04: CNY 16.86 per share

- 2024-05: CNY 18.38 per share

- 2024-06: CNY 18.45 per share

- 2024-07: CNY 16.34 per share

- 2024-08: CNY 13.66 per share

- 2024-09: CNY 15.80 per share

- 2024-10: CNY 15.77 per share

- 2024-11: CNY 15.18 per share

- 2024-12: CNY 15.89 per share

- 2025-01: CNY 14.92 per share

- 2025-02: CNY 14.61 per share

- 2025-03: CNY 14.97 per share

- 2025-04: CNY 15.21 per share

- 2025-05: CNY 15.96 per share

- 2025-06: CNY 16.74 per share

- 2025-07: CNY 20.20 per share

- 2025-08: CNY 19.78 per share

- 2025-09: CNY 19.29 per share

- 2025-10: CNY 20.87 per share

- 2025-11: CNY 21.46 per share

- 2025-12: CNY 24.28 per share

- 2026-01: CNY 24.85 per share

- 2026-02: CNY 37.07 per share

- 2026-03: CNY 35.05 per share

- 2026-04: CNY 39.01 per share

- 2026-05: CNY 35.23 per share

- 2026-06: CNY 28.77 per share

- 2026-07: CNY 25.10 per share

- 2026-08: CNY 25.75 per share

- 2026-09: CNY 22.97 per share

## Annual estimated value (CNY per share)

- FY2017: low CNY 17.47 per share, central CNY 18.49 per share, high CNY 19.84 per share

- FY2018: low CNY 17.43 per share, central CNY 18.35 per share, high CNY 19.58 per share

- FY2019: low CNY 15.76 per share, central CNY 16.52 per share, high CNY 17.52 per share

- FY2020: low CNY 14.80 per share, central CNY 15.68 per share, high CNY 16.85 per share

- FY2021: low CNY 12.90 per share, central CNY 13.82 per share, high CNY 15.06 per share

- FY2022: low CNY 12.47 per share, central CNY 13.52 per share, high CNY 14.92 per share

- FY2023: low CNY 13.52 per share, central CNY 14.64 per share, high CNY 16.12 per share

- FY2024: low CNY 14.92 per share, central CNY 15.77 per share, high CNY 16.91 per share

- FY2025: low CNY 12.03 per share, central CNY 12.77 per share, high CNY 13.76 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.