600835:SSEShanghai Mechanical & Electrical Industry Co., Ltd. Class A Analysis

Shanghai Mechanical & Electrical (600835) is trading at CNY 24.23, comfortably below its 20‑day (CNY 26.23) and 200‑day (CNY 25.96) moving averages, indicating short‑term weakness. The RSI of 31.5 suggests the stock is oversold, while a bearish MACD (line below signal) confirms downward momentum. Volume is rising, hinting at growing trader interest as the price hovers just above the technical support of CNY 23.60.
Fundamentally, the company faces a 5.9% revenue decline and modest profitability (gross margin 15%, ROE 7.8%). Valuation is mixed: a PE of 26.9 is slightly below the industry average of 29.3, yet the DCF‑derived fair value of CNY 20.38 is well under the current price, signaling overvaluation. The balance sheet is strong with CNY 14.38 bn cash versus minimal debt, supporting a dividend yield of 1.73% and a payout ratio of 69%, which appears sustainable.