In-depth Analysis of Goodwill Impairment Risk for Sunway Communication (300136.SZ)

Based on the above in-depth analysis, I provide you with a complete assessment report on Sunway Communication’s goodwill impairment risk:

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As of the end of Q3 2025, Sunway Communication’s book goodwill stands at a high , ranking 5th in terms of goodwill scale among 88 listed companies in Shenwan’s “Consumer Electronic Components and Assembly” sector[1]. This amount accounts for approximately of the company’s net assets (RMB 7.679 billion), and relative to the company’s total asset scale (RMB 13.573 billion), the goodwill burden is quite heavy.

Acquired Target	Acquisition Time	Goodwill Formed (RMB 100 million)	Premium Rate	Proportion
Laird (Beijing)	2012	~2-3	Relatively High	~20-30%
Shenzhen Yalisheng	2014-2015	5.32	730.66%	54.2%
Other Subsidiaries	Subsequent Years	~2-3	Varying	~20-25%

Shenzhen Yalisheng is the largest source of goodwill, with its RMB 532 million in goodwill accounting for

of the total, making it the core trigger for Sunway Communication’s goodwill impairment risk[1].

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Period	Net Profit (RMB 10,000)	YoY Change	Remarks
2022	~10,000	Normal Level	Annual net profit at the RMB 100 million level
2023	~10,000	Normal Level	Annual net profit at the RMB 100 million level
H1 2024	~7,000	QoQ Decline	Remained at a relatively high level
H1 2025	837.56	-88%	Plummeted nearly 90% YoY

Shenzhen Yalisheng’s H1 2025 net profit was only RMB 8.3756 million, a

compared to approximately RMB 70 million in H1 2024[1]. Considering that Yalisheng promised net profits of no less than RMB 45 million, RMB 58.6 million, and RMB 76.2 million for 2015-2017 respectively at the time of acquisition, its current performance has far fallen below the performance commitment benchmark set at acquisition.

1. Industry Cycle Factor
   : Fluctuating demand in the automotive connector industry
2. Intensified Competition
   : Market structure changes leading to share loss
3. Integration Difficulties
   : Synergy effects after cross-sector mergers and acquisitions failed to meet expectations

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According to the “Accounting Standards for Business Enterprises No. 8 - Asset Impairment”, enterprises should judge whether there are signs of possible impairment on the balance sheet date. Sunway Communication’s Shenzhen Yalisheng subsidiary clearly has the following impairment signs:

1. Sharp Performance Decline
   : H1 2025 net profit fell 88% YoY, significantly lower than historical levels and acquisition expectations
2. Operational Difficulties
   : Performance plummeted from the RMB 100 million level to the RMB 1 million level
3. Deteriorating Industry Environment
   : Intensified competition in the consumer electronics and automotive electronics industries

Risk Dimension	Assessment Grade	Explanation
Impairment Probability	Extremely High	Yalisheng’s performance has continued to decline and is far below acquisition commitments
Impairment Amount	RMB 100-300 million	Estimated range of goodwill impairment provisions to be set aside
Proportion of Net Profit	20-60%	Potential impact on annual net profit
Impact on Net Assets	1.3-3.9%	10-30% impairment ratio of the RMB 987 million goodwill

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Indicator	Sunway Communication	Industry Average	Deviation Range
P/E (TTM)	118-119x	15-25x	4-7x
P/B	9.45x	2-4x	2-4x
Market Capitalization	RMB 72.57 billion	-	-

1. Concept Hype
   : Labeled with popular concepts such as “AI Consumer Electronics” and “Commercial Aerospace”
2. Hot Events
   : Stimulated by news such as payment demand from Musk’s X platform and millimeter-wave radar supply to North American customers
3. Capital Driving
   : Recent stock price increase has been excessive, with a cumulative gain of over 232% since 2025[0]

Based on technical analysis results[0]:

• RSI(14): 31.20 (in the oversold zone)
• MACD: No crossover signal, bearish bias
• KDJ: K value 18.2, D value 22.6, indicating oversold opportunities
• Beta: 0.82 (relatively low volatility compared to the market)
• Trend Judgment: Sideways consolidation, no clear direction

Assessment Dimension	Market Pricing Status	Judgment
Goodwill Impairment Risk	Not Fully Priced In	The market focuses more on hot concepts and ignores fundamental deterioration
Performance Decline Risk	Partially Reflected	Stock price fluctuations have reflected some expectations
Valuation Bubble Risk	Risk is Severely Underestimated	118x P/E has overdrawn growth for many years to come

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. The main basis is as follows:

1. Of the RMB 987 million in goodwill, RMB 532 million comes from Shenzhen Yalisheng
   , and the subsidiary’s H1 2025 net profit plummeted nearly 90% YoY, making the performance collapse a fact
2. The current stock price is based on concept hype
   , with a P/E ratio as high as 118x, which is far from reflecting the potential RMB 100-300 million goodwill impairment loss
3. Sluggish Performance Growth
   : In the first three quarters of 2025, revenue growth was only 1.07%, and net profit attributable to parent company shareholders fell 8.77% YoY, significantly lower than the industry average[1]
4. Severe Deviation Between Valuation and Fundamentals
   : The median revenue growth rate of the industry sector is 11.97%, and the median net profit growth rate is 10.44%, while Sunway Communication’s performance lags far behind

• ⚠️
  Goodwill Impairment Risk
  : Shenzhen Yalisheng’s performance has plummeted, and it is expected to set aside RMB 100-300 million in impairment provisions
• ⚠️
  Performance Growth Risk
  : Revenue growth is only 1.07%, far lower than the industry average
• ⚠️
  Valuation Correction Risk
  : The 118x P/E lacks fundamental support, and the stock price may correct sharply
• ⚠️
  Market Sentiment Risk
  : Concept hype has overdrawn future growth

For investors with low risk appetite, it is recommended to:

• Avoid or Reduce Holdings
  : Consider entering after the goodwill impairment risk is fully released
• Focus on Annual Reports
  : The 2024 annual report and 2025 impairment test results will be important catalysts
• Control Position Size
  : If holding positions, pay close attention to goodwill impairment announcements

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The chart above shows Sunway Communication’s recent price trend. The current price is in a relatively high-level consolidation phase. Technical indicators show that the RSI is in the oversold zone, with potential for a rebound, but the medium-term trend remains unclear.

This chart analyzes Sunway Communication’s goodwill risk from four dimensions:

1. Comparison of goodwill-to-net-asset ratio (Sunway Communication 12.9%, significantly higher than comparable companies)
2. Sharp decline in Shenzhen Yalisheng’s performance (from the RMB 100 million level to the RMB 1 million level)
3. Deviation between stock price and valuation (P/E soared from 35x to over 100x)
4. Risk assessment matrix (goodwill impairment risk is in the high-risk zone)

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[0] Jinling AI Financial Analysis API - Company fundamentals, technical analysis and market data

[1] 36Kr - “Sunway Communication: Is Musk Pouring Money In Crazy?” (https://www.36kr.com/p/3630469651891209)

[2] Eastmoney - Sunway Communication Q3 Operating Performance Analysis Report (https://caifuhao.eastmoney.com/news/20251225141744175185600)

[3] Baidu Encyclopedia - Sunway Communication Entry (https://baike.baidu.com/item/信维通信[300136]/19152073)