Sieyuan Electric (002028.SZ): First Take: 3Q26 OP in line, NP below on one-offs, with continued US order intakes despite regulatory uncertainty

Sieyuan reported 3Q26 earnings with operating profit in line implying resilient operations, despite a slower revenue recognition versus order intake due to DDP-based overseas delivery with delayed recognition and longer acceptance cycles for GIS. Net profit came below GSe by 18% for a combination of credit impairment loss, asset impairment loss, FX loss, lower subsidies, fair value change, and higher minority interest than expectations. 3Q26 revenue/gross profit/operating profit/net profit delivered 31%/21%/30%/5% yoy growth, -3%/-7%/0%/-18% vs GSe. GPM pressure mainly reflects mix and FX, freight costs and raw materials price hike, with core product margins broadly resilient. Management hosted an earnings call on Oct 24: North America orders remain resilient despite regulatory uncertainty (Rmb300-400mn in Sep and over Rmb1bn in Oct-Nov), with management moderately optimistic as core transformers and switchgear have limited programmable hardware or software and customers are CSPs rathe