900925 · SSE · China
chinasec.cnFinancials as of FY2025
Builds integrated drive systems from steel, copper, and electronics for Shanghai's state-owned car factories.
What this company is and how it runs — written from structure, not news.
Shanghai Mechanical and Electrical Industry Co., Ltd. converts steel, copper, and electronic components into integrated electro-mechanical drive systems that run inside SAIC and BYD automotive assembly plants in Shanghai. Those plants cannot simply swap in parts from a different supplier because their production control systems were physically built around this company's equipment during multi-year qualification cycles — restarting that process would take years, and a new supplier would have to clear China's domestic automotive certification requirements before being allowed on the line at all. Growing production capacity requires new industrial land use rights inside Shanghai's designated industrial zones, and those rights are allocated by municipal planning committees that weigh factory space against more valuable real estate development, so capital alone cannot buy more room to expand. The whole structure depends on Shanghai's industrial planning priorities staying oriented toward traditional automotive manufacturing — if municipal authorities shift focus toward electric vehicle platforms or semiconductor fabrication, the procurement relationships that underpin the qualification records and embedded control-system integrations would redirect toward new supplier categories, and the accumulated history that no competitor can replicate would become worthless overnight.
How does this company make money?
The company gets paid per completed machinery system, with payments arriving in stages as deliveries hit agreed milestones. On top of that, it sells spare parts to factories already running its equipment, and it charges ongoing fees for maintenance contracts on the production line equipment it has installed.
What makes this company hard to replace?
Switching suppliers would mean restarting multi-year qualification and testing cycles with state-owned manufacturers — a costly and time-consuming process. Beyond that, SAIC and other Shanghai-based OEM production control systems are already physically integrated around this company's equipment. Any new supplier would also have to navigate China's automotive industry technical standards, which require their own domestic certification processes before a product can be used on these lines.
What limits this company?
Adding production capacity requires more industrial land inside Shanghai's designated manufacturing zones. Those land rights are handed out by municipal planning committees that are increasingly weighing car-parts factories against more lucrative real estate development. No amount of cash can skip that process.
What does this company depend on?
The company cannot operate without Shanghai municipal industrial zone operating permits, state-controlled steel allocation quotas, imported precision bearings and motors, automotive OEM production schedules set by SAIC and BYD, and credit facilities from China Development Bank.
Who depends on this company?
SAIC assembly plants would face production line shutdowns without this company's electro-mechanical drive systems. BYD and SAIC motor vehicle production would halt without the automated assembly equipment it supplies. China's wind turbine manufacturers would lose access to the precision gearbox assemblies they rely on.
How does this company scale?
Mechanical fabrication can be replicated by adding production bays inside existing facilities — that part is relatively straightforward. The hard ceiling is land: growing beyond those walls requires new industrial land use rights in Shanghai, which means going back to the municipal planning committees and competing against higher-value real estate projects, a fight that money alone cannot win.
What external forces can significantly affect this company?
U.S. export controls on advanced manufacturing equipment can cut off access to the precision machining tools the company needs. China's carbon neutrality mandates require energy-intensive steel and copper processing to meet tightening environmental standards. And because the company buys imported components in foreign currency but sells domestically at fixed prices, swings in the yuan-dollar exchange rate can quietly eat into margins.
Where is this company structurally vulnerable?
If Shanghai's municipal authorities decide to shift their industrial planning priorities away from traditional car manufacturing — say, toward electric vehicle platforms or semiconductor fabrication — procurement would move to a new set of suppliers. The qualification records and embedded control-system integrations this company spent years building would become worthless overnight, because they only have value inside the OEM relationships they were created for.
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Sign in1 interpretation currently present — each is a set of fired observations whose alignment reads as one structural pattern. Click an observation to see the numbers behind it.
Screen for these patternsHow is this stock behaving?
Three observations describe the present configuration: a high share of the trailing three years' weekly closes were higher than the prior week, the company has reported positive net income in each of the last five annual periods, and the book-value-increase-consistency composite over the trailing 5 years is elevated.
An interpretation is present only while every observation it reads stays fired (score ≥ 70). It describes what the aligned readings show — never a verdict, never a prediction.
What the company actually pays, and whether its own cash supports it.
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1 interpretation currently present — each is a set of fired observations whose alignment reads as one structural pattern. Click an observation to see the numbers behind it.
Screen for these patternsHow does this company use capital?
Three observations co-occur: the weighted composite of net cash relative to market cap, OCF/revenue, operating margin, and ROE is in its elevated range; OCF/NI is in its elevated range; total cash at MRQ is at least equal to total debt. The configuration describes capital structure, cash-flow backing, and net-cash position at the current snapshot.
An interpretation is present only while every observation it reads stays fired (score ≥ 70). It describes what the aligned readings show — never a verdict, never a prediction.
Shared structure with peers — never a ranking.
Structural observations derived from financial data, industry benchmarks, and supply chain position.
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