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Huizhou Desay SV / Inovance Technology / Shuanghuan Driveline / Wuliangye Yibin / WuXi AppTec
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Company Results | Huizhou Desay SV (002920 CH/BUY/Rmb77.42/Target: Rmb105.00)
3Q26 net profit missed estimates at Rmb591m (+4.5% yoy, -24.6% qoq), as subsidy cuts, credit provisions, associate losses and a tax hike offset a 24% revenue beat. Forward earnings should be driven by new smart-driving programmes, overseas growth and customer diversification. We trim our 2026 net profit forecast by 1% to Rmb2.54b and raise our 2027-28 forecasts by 3%/8% to Rmb2.88b/Rmb3.41b. Maintain BUY on Huizhou Desay SV and cut target price from Rmb135.00 to Rmb105.00.
Company Results | Inovance Technology (300124 CH/BUY/Rmb53.31/Target: Rmb75.00)
Inovance’s 3Q26 results were mixed. Revenue was in line, rising 19% yoy to Rmb13.3b, but gross margin missed expectations and plunged 2.1ppt yoy to 25.5% due to costs hikes. Reported net profit was boosted by a Rmb419m fair value gain and increased 23.6% yoy to Rmb1.6b, but if we strip that out, core net profit would have declined 5% yoy to Rmb1.2b which is a 17% miss vs consensus. Going forward, top-line growth remains intact and margins are guided to recover as Inovance passes down cost hikes to its clients. Maintain BUY, cut target price to Rmb75.00.
Company Results | Shuanghuan Driveline (002472 CH/BUY/Rmb41.41/Target: Rmb52.00)
Shuanghuan's 3Q26 results were broadly in line. Revenue grew 14% yoy and 4% qoq, and gross margin recovered 0.7ppt qoq to 26.8%, while higher opex held net profit growth to 4% yoy and 10% qoq to Rmb333m. NEV gears and intelligent actuators remained the key growth driver with revenue growing 26%/31% yoy respectively. Going forward, growth is expected to be driven by overseas orders through its Hungary/Vietnam plant as well as export orders, while the accelerating penetration of coaxial reducers should provide a meaningful boost to product mix from 2027 onwards. Maintain BUY and raise target price to Rmb52.00.
Company Results | Wuliangye Yibin (000858 CH/SELL/Rmb75.38/Target: Rmb64.20)
Wuliangye’s 3Q26 revenue fell 38% yoy and net profit dropped 48% yoy, despite a revised base, primarily due to weaker-than-expected demand and elevated selling expenses. Cash inflow from sales of goods also worsened, reaching Rmb7.2b, up 1% yoy but down 41% qoq, and contract liabilities fell 4% yoy to Rmb8.9b. Cut target price by 18% to Rmb64.20; downgrade to SELL.
Company Results | WuXi AppTec (2359 HK/BUY/HK$185.60/Target: HK$220.00)
WuXi AppTec delivered strong 9M26 results, with total revenue and adjusted net profit expanding 38.6% yoy and 74.4% yoy respectively, beating market estimates and its growth guidance. Its backlog for continuing operations increased 36.4% yoy to Rmb76.7b at end-Sep 26. The company has raised its 2026 revenue target further from Rmb58.5b-60.5b to Rmb61.0b-61.9b, with continuing operations revenue growing 40-42% yoy (vs 35-39% previously). Maintain BUY and target price of HK$220.00.
Top Stories
Company Results | Huizhou Desay SV (002920 CH/BUY/Rmb77.42/Target: Rmb105.00)
3Q26 net profit missed estimates at Rmb591m (+4.5% yoy, -24.6% qoq), as subsidy cuts, credit provisions, associate losses and a tax hike offset a 24% revenue beat. Forward earnings should be driven by new smart-driving programmes, overseas growth and customer diversification. We trim our 2026 net profit forecast by 1% to Rmb2.54b and raise our 2027-28 forecasts by 3%/8% to Rmb2.88b/Rmb3.41b. Maintain BUY on Huizhou Desay SV and cut target price from Rmb135.00 to Rmb105.00.
Company Results | Inovance Technology (300124 CH/BUY/Rmb53.31/Target: Rmb75.00)
Inovance’s 3Q26 results were mixed. Revenue was in line, rising 19% yoy to Rmb13.3b, but gross margin missed expectations and plunged 2.1ppt yoy to 25.5% due to costs hikes. Reported net profit was boosted by a Rmb419m fair value gain and increased 23.6% yoy to Rmb1.6b, but if we strip that out, core net profit would have declined 5% yoy to Rmb1.2b which is a 17% miss vs consensus. Going forward, top-line growth remains intact and margins are guided to recover as Inovance passes down cost hikes to its clients. Maintain BUY, cut target price to Rmb75.00.
Company Results | Shuanghuan Driveline (002472 CH/BUY/Rmb41.41/Target: Rmb52.00)
Shuanghuan's 3Q26 results were broadly in line. Revenue grew 14% yoy and 4% qoq, and gross margin recovered 0.7ppt qoq to 26.8%, while higher opex held net profit growth to 4% yoy and 10% qoq to Rmb333m. NEV gears and intelligent actuators remained the key growth driver with revenue growing 26%/31% yoy respectively. Going forward, growth is expected to be driven by overseas orders through its Hungary/Vietnam plant as well as export orders, while the accelerating penetration of coaxial reducers should provide a meaningful boost to product mix from 2027 onwards. Maintain BUY and raise target price to Rmb52.00.
Company Results | Wuliangye Yibin (000858 CH/SELL/Rmb75.38/Target: Rmb64.20)
Wuliangye’s 3Q26 revenue fell 38% yoy and net profit dropped 48% yoy, despite a revised base, primarily due to weaker-than-expected demand and elevated selling expenses. Cash inflow from sales of goods also worsened, reaching Rmb7.2b, up 1% yoy but down 41% qoq, and contract liabilities fell 4% yoy to Rmb8.9b. Cut target price by 18% to Rmb64.20; downgrade to SELL.
Company Results | WuXi AppTec (2359 HK/BUY/HK$185.60/Target: HK$220.00)
WuXi AppTec delivered strong 9M26 results, with total revenue and adjusted net profit expanding 38.6% yoy and 74.4% yoy respectively, beating market estimates and its growth guidance. Its backlog for continuing operations increased 36.4% yoy to Rmb76.7b at end-Sep 26. The company has raised its 2026 revenue target further from Rmb58.5b-60.5b to Rmb61.0b-61.9b, with continuing operations revenue growing 40-42% yoy (vs 35-39% previously). Maintain BUY and target price of HK$220.00.
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