Company Coverage
Shuanghuan Driveline (002472 CH): 2Q26: Bottom Line Misses On Margins; Growth In 2H Intact
BUY (Maintained)
Current price:
Target price:
Upside:
Previous TP :
Rmb35.60
Rmb50.00
+40.4%
Rmb52.00
Analyst
Analyst
Highlights
2Q26 bottom line missed our estimate by 3.0% despite a 5.7% beat in revenue, as margins were worse than expected due to dilution amid overseas capacity ramp up.
Forward guidance remains solid, with most key businesses expected to grow sequentially, and profitability should improve as production continues to ramp up. Forex might be a lingering issue due to elevated contribution from the EU.
Maintain BUY but cut target price to Rmb50.00.
Analysis
2Q26 revenue beat, but bottom line missed on weaker margins. Shuanghuan Driveline’s (Shuanghuan) 2Q26 revenue grew 13.8% yoy and 17.6% qoq to Rmb2.5b, with growth mainly driven by EV gears (+21% yoy), construction machinery gears (+28% yoy), and robotic reducers (>+20% yoy). Gross margin however declined 1.2ppt yoy and 1.4ppt qoq to 26.1% as the lower-margin Hungary plant (~Rmb200m revenue in 1H26) started to ramp up, while some new capacity was also in the early ramp-up phase. With the opex ratio largely in line with expectations, and an a Rmb22m forex loss from a weakening euro/US$ against Rmb, net profit grew 0.5% yoy and 6.5% qoq to Rmb303m, which is around 3.0%/5.0% below our/consensus estimates.
Highlights
2Q26 bottom line missed our estimate by 3.0% despite a 5.7% beat in revenue, as margins were worse than expected due to dilution amid overseas capacity ramp up.
Forward guidance remains solid, with most key businesses expected to grow sequentially, and profitability should improve as production continues to ramp up. Forex might be a lingering issue due to elevated contribution from the EU.
Maintain BUY but cut target price to Rmb50.00.
Analysis
2Q26 revenue beat, but bottom line missed on weaker margins. Shuanghuan Driveline’s (Shuanghuan) 2Q26 revenue grew 13.8% yoy and 17.6% qoq to Rmb2.5b, with growth mainly driven by EV gears (+21% yoy), construction machinery gears (+28% yoy), and robotic reducers (>+20% yoy). Gross margin however declined 1.2ppt yoy and 1.4ppt qoq to 26.1% as the lower-margin Hungary plant (~Rmb200m revenue in 1H26) started to ramp up, while some new capacity was also in the early ramp-up phase. With the opex ratio largely in line with expectations, and an a Rmb22m forex loss from a weakening euro/US$ against Rmb, net profit grew 0.5% yoy and 6.5% qoq to Rmb303m, which is around 3.0%/5.0% below our/consensus estimates.
BUY (Maintained)
Current price:
Target price:
Upside:
Previous TP :
Rmb35.60
Rmb50.00
+40.4%
Rmb52.00
Analyst
Analyst
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