Key takeaway

The company expects net profit attributable to shareholders of the parent company in 1H26 to reach RMB46mn-RMB55mn, and non-recurring net profit to reach RMB43.8mn- RMB52.8mn,based on the midpoint of the earnings guidance, net profit attributable to shareholders of the parent company in 2Q26 is expected to reach RMB49.29mn, down 1.2% YoY, while non-recurring net profit is expected to reach RMB48.03mn, down 0.6% YoY。 The pressure on the company's performance in 1H was mainly due to foreign exchange impacts (the foreign exchange impact in Q2 has narrowed), and excluding foreign exchange gains and losses, total profit is expected to achieve positive YoY growth, while benefiting from the continued rampup of the Thailand base, profitability in Q2 improved significantly QoQ. On the revenue side, the company's domestic and overseas proprietary brands both achieved solid growth in 1H26, while the OEM business remained stable, and the fashionoriented and fast-moving consumer goods trends of overseas insulated bottles are still evolving. Recently, the company strategically invested in Orion Energy, a leading CIGS space photovoltaic company(through an indirect investment via a partnership platform, with a post-investment shareholding ratio of approximately 4%+), representing the company's initial attempt to explore a second growth curve, and the company will continue to focus on this track over the long term.

Event

HAERS released its 1H26 earnings preview. The company expects net profit attributable to shareholders of the parent company in 1H26 to reach RMB46mn-RMB55mn, down 39.79%- 49.65% YoY, while non-recurring net profit is expected to reach RMB43.8mn-RMB52.8mn, down 41.23%-51.25% YoY.

Based on the midpoint of the earnings guidance, net profit attributable to shareholders of the parent company in 2Q26 is expected to reach RMB49.29mn, down 1.2% YoY, while nonrecurring net profit is expected to reach RMB48.03mn, down 0.6% YoY.

Quick Take

Revenue grew steadily in 1H26, with the OEM business remaining stable and proprietary brands achieving solid growth. Leveraging its diversified customer portfolio and full industry chain synergies, in 1H26the company achieved YoY growth in operating revenue, with operating resilience continuing to emerge. Among them, 1)revenue from domestic proprietary brands maintained growth in 1H, especially with strong YoY growth in e-commerce and channel businesses; 2) the overseas brand SIGG continued to maintain doubledigit growth, with strong performance from online channels; 3) the foreign trade business achieved YoY revenue growth in Q2,while the combined revenue contribution from the top five customers remained stable, demonstrating solid customer structure resilience.

Profitability improved QoQ in 2Q26, while the Thailand base is ramping up production capacity. The company expects profit in 1H26 to decline YoY, while based on our estimates, performance in Q2 alone QoQ has improved significantly. 1) Regarding exchange rates, affected by the appreciation of the RMB against the USD, export gross margin came under corresponding pressure; however, from 2Q onward, the impact of exchange rate fluctuations gradually narrowed. Excluding the exchange gains and losses under financing expense, total profit is expected to increase YoY. 2) Regarding the Thailand base, the company's Thailand base is still in the capacity ramp-up stage. As overseas capacity is released in an orderly manner and supply chain localization progresses gradually, the cost gap with domestic operations is gradually narrowing, and the overall profitability of the base is expected to continue improving.

Strategically invested in Orion Energy, focusing on commercial aerospace and space photovoltaics. According to Securities Times, recently, Orion Energy, a leading company in the flexible copper indium gallium selenide (CIGS) space photovoltaic sector, recently completed an A-round financing worth over RMB100mn, led strategically by Hangzhou Fengzhen Enterprise Management Partnership (Limited Partnership), an institution jointly established by Haers and well-known investors. Haers stated in its investor relations activity record that the company has indirectly participated in investing in the target through a partnership platform, and the project is currently in the verification stage. The company will continue to pay long-term attention to this sector. According to Aiqicha data, after the completion of this investment, Haers holds an approximately 4%+ stake in Orion Energy. According to Securities Times, with flexible CIGS solar technology as its core, Orion Energy's selfdeveloped StarFlex aerospace-grade flexible photovoltaic cells have achieved generational breakthroughs in three dimensions: ultra-lightweight design, resistance to cosmic radiation, and stability across an ultra-wide temperature range. The company has currently completed the full ground-based verification process and plans to conduct an in-orbit test in September 2026.

Earnings forecast: The company's revenue for 2026-2028 is estimated to be RMB3.894bn, RMB4.588bn, and RMB5.338bn, up 20.2%, 17.8%, and 16.3% YoY respectively. Net profit attributable to shareholders of the parent company is estimated to be RMB214mn, RMB352mn, and RMB451mn, up 205.2%, 64.3%, and 28.1% YoY respectively. The corresponding PE is 17.4x, 10.6x, and 8.3x. We maintain the "Buy" rating.

Risk reminders: 1) Risk of declining demand in the global insulated cup industry: In recent years, benefiting from trends such as outdoor activities and fashion consumption, insulated cups have shifted from durable goods to fast-moving consumer goods. Manufacturers have benefited from industry demand growth. If future consumption trends change, industry growth may slow down and affect the performance of brand owners and manufacturers. 2) Risk related to cooperation with major customers: Revenue from the company's top five customers accounts for more than 60% of total sales revenue. If the company's cooperation with existing major customers changes adversely, such as a decline in customer business or a decrease in the company's supplier share, the company's revenue growth may slow, adversely affecting its revenue and profit levels. 3) Risk that the ramp-up of the Thailand base falls short of expectations: The company's overseas base has only recently commenced operations and remains in the ramp-up stage. Due to the relatively low localization rate of the overseas supply chain and insufficient worker proficiency in the early stage, costs remain high and affect the company's performance. If the subsequent ramp-up of the Thailand base falls short of expectations, the company's profit margin may continue to be affected. 4) Risk of raw material price fluctuations: The company's main raw materials include stainless steel coils, stainless steel tubes, and plastic pellets. Fluctuations in commodity prices may affect the company's profitability. 5) Risk that development of the second growth curve falls short of expectations: The company recently acquired an equity stake in Qingtian Xingneng and is focusing on the commercial aerospace and space photovoltaic sectors. Development of the second growth curve is a challenging long-term process and is still at an early stage.