Company Coverage
Zhejiang Sanhua Intelligent Controls Co (002050 CH): 2Q26: Core Earnings In Line; Reported Profit Misses On Forex Loss
BUY (Maintained)
Current price:
Target price:
Upside:
Previous TP :
Rmb36.82
Rmb43.00
16.8%
Rmb57.00
Analyst
Highlights
- 2Q26 core net profit grew 9.2% yoy and 15.59% qoq to Rmb1,286m, in line with our estimate, while reported net profit fell 7.5% yoy on forex loss.
- Management kept its full-year target of 15% profit growth, with profit growth expected to outpace revenue growth.
- Looking ahead, growth will come from data centre liquid cooling, appliance premiumisation and humanoid robots.
- We cut our 2026 net profit forecast by 5% for the forex loss, but maintain core net profit forecasts. Maintain BUY and cut target price to Rmb43.00/HK$50.00.
Analysis
Reported net profit missed estimates on forex loss. Zhejiang Sanhua Intelligent Controls Co’s (Sanhua) 2Q26 reported net profit dropped 7.5% yoy and grew 20.4% qoq to Rmb1,116m, missing estimates, as forex loss spiked 497.4% yoy to Rmb143m.
- 2Q26 core earnings grew 9.2% yoy and 15.5% qoq to Rmb1,286m, in line with estimates. This brings 1H26 adjusted net profit to Rmb2,399m (+19.2% yoy), 51% of our full-year estimate of Rmb4,716m.
- Revenue growth accelerated from 1.4% yoy in 1Q26 to 6.2% yoy in 2Q26, in line with estimates. This brings 1H26 revenue to Rmb16.9b (+3.9% yoy), 50% of our full-year estimate.
Highlights
- 2Q26 core net profit grew 9.2% yoy and 15.59% qoq to Rmb1,286m, in line with our estimate, while reported net profit fell 7.5% yoy on forex loss.
- Management kept its full-year target of 15% profit growth, with profit growth expected to outpace revenue growth.
- Looking ahead, growth will come from data centre liquid cooling, appliance premiumisation and humanoid robots.
- We cut our 2026 net profit forecast by 5% for the forex loss, but maintain core net profit forecasts. Maintain BUY and cut target price to Rmb43.00/HK$50.00.
Analysis
Reported net profit missed estimates on forex loss. Zhejiang Sanhua Intelligent Controls Co’s (Sanhua) 2Q26 reported net profit dropped 7.5% yoy and grew 20.4% qoq to Rmb1,116m, missing estimates, as forex loss spiked 497.4% yoy to Rmb143m.
- 2Q26 core earnings grew 9.2% yoy and 15.5% qoq to Rmb1,286m, in line with estimates. This brings 1H26 adjusted net profit to Rmb2,399m (+19.2% yoy), 51% of our full-year estimate of Rmb4,716m.
- Revenue growth accelerated from 1.4% yoy in 1Q26 to 6.2% yoy in 2Q26, in line with estimates. This brings 1H26 revenue to Rmb16.9b (+3.9% yoy), 50% of our full-year estimate.
BUY (Maintained)
Current price:
Target price:
Upside:
Previous TP :
Rmb36.82
Rmb43.00
16.8%
Rmb57.00
Analyst
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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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