Company Coverage
Huizhou Desay SV (002920 CH): 3Q26: Revenue Growth Accelerates To 24%, But Earnings Miss On Subsidy Cuts, Credit Provisions, Associates’ Losses, And Tax Hikes
BUY (Maintained)
Current price:
Target price:
Upside:
Previous TP :
Rmb77.42
Rmb105.00
35.6%
Rmb135.00
Analyst
Highlights
- 3Q26 net profit missed estimates at Rmb591m (+4.5% yoy/-24.6% qoq) with subsidy cut, credit provision, associates’ loss, and tax hike offsetting revenue beat (+24% yoy).
- Forward earnings will be driven by new smart-driving programmes, overseas growth, and diversified customers.
- We trim our 2026-28 net profit forecasts by 1% to Rmb2.54b, and raise our 2027-28 net profit forecasts by 3%/8% to Rmb2.88b/Rmb3.41b respectively.
- Maintain BUY and cut target price from Rmb135.00 to Rmb105.00.
Analysis
- 3Q26 net profit missed estimates at Rmb591m (+4.5% yoy/-24.6% qoq), with subsidy cut, credit provision, associates’ loss, and tax hike offsetting revenue beat. This brings 9M26 net profit to Rmb1,835m (+2.7% yoy), 72% of our 2026 estimate. - Revenue grew 23.7% yoy and 13.2% qoq to Rmb9,519m in 3Q26, beating estimates on overseas growth and a favourable smart-driving product mix. This compares with +7.0%/-4.4% yoy revenue growth in 2Q26/1Q26. Given 9M26 revenue of Rmb24.42b (+9.3% yoy), our original 2026 revenue estimate implies 4Q26 revenue of only Rmb9,765m (-4.5% yoy/+2.6% qoq), which is over-conservative.
Highlights
- 3Q26 net profit missed estimates at Rmb591m (+4.5% yoy/-24.6% qoq) with subsidy cut, credit provision, associates’ loss, and tax hike offsetting revenue beat (+24% yoy).
- Forward earnings will be driven by new smart-driving programmes, overseas growth, and diversified customers.
- We trim our 2026-28 net profit forecasts by 1% to Rmb2.54b, and raise our 2027-28 net profit forecasts by 3%/8% to Rmb2.88b/Rmb3.41b respectively.
- Maintain BUY and cut target price from Rmb135.00 to Rmb105.00.
Analysis
- 3Q26 net profit missed estimates at Rmb591m (+4.5% yoy/-24.6% qoq), with subsidy cut, credit provision, associates’ loss, and tax hike offsetting revenue beat. This brings 9M26 net profit to Rmb1,835m (+2.7% yoy), 72% of our 2026 estimate. - Revenue grew 23.7% yoy and 13.2% qoq to Rmb9,519m in 3Q26, beating estimates on overseas growth and a favourable smart-driving product mix. This compares with +7.0%/-4.4% yoy revenue growth in 2Q26/1Q26. Given 9M26 revenue of Rmb24.42b (+9.3% yoy), our original 2026 revenue estimate implies 4Q26 revenue of only Rmb9,765m (-4.5% yoy/+2.6% qoq), which is over-conservative.
BUY (Maintained)
Current price:
Target price:
Upside:
Previous TP :
Rmb77.42
Rmb105.00
35.6%
Rmb135.00
Analyst
IMPORTANT NOTICE - DISCLOSURES AND DISCLAIMERS
This report is provided subject to, and must be read together with, the full Disclosures / Disclaimers available at this link, which are incorporated by reference into this report. In particular, this report is intended for general circulation and informational purposes only and does not constitute personal investment advice or a recommendation to buy or sell any investment product or security. You should independently evaluate the information and, where necessary, seek advice from a qualified financial adviser regarding the suitability of any investment. Analyst certifications required under applicable regulations, including SEC Regulation AC (where relevant), are included in this report. By accessing, receiving or using this report, you acknowledge that you have read, understood and agreed to be bound by the Disclosures / Disclaimers, as may be amended, supplemented or updated from time to time.
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