Key takeaway

In 1H26, SYGF recorded revenue of RMB14.389bn, up 36.20% YoY; net profit attributable to shareholders of the parent company was RMB1.521bn, up 282.44% YoY; net profit attributable to shareholders of the parent company excluding non-recurring gains and losses was RMB982mn, up 246.34% YoY. The company’s revenue growth accelerated further in 2Q26, with revenue reaching RMB8.186bn, up 47.22% YoY, while net profit attributable to shareholders of the parent company and net profit attributable to shareholders of the parent company excluding non-recurring gains and losses increased by 440.45% and 341.60% YoY, respectively. With the recovery in display, education, and other sectors, together with the company’s initiatives in AI foundation models and overseas market expansion, we forecast revenue of

RMB31.580bn/RMB36.111bn/RMB40.637bn for 2026–2028, representing YoY growth of 29.67%/14.35%/12.54%, respectively. We forecast net profit attributable to shareholders of the parent company of RMB2.544bn/RMB2.631bn/RMB2.958bn, representing YoY growth of 151.07%/3.41%/12.43%, respectively. This corresponds to P/E multiples of 14x/13x/12x. We upgrade the stock to “Buy.”

Event

In 1H26, the company recorded revenue of RMB14.389bn, up 36.20% YoY; net profit attributable to shareholders of the parent company was RMB1.521bn, up 282.44% YoY; net profit attributable to shareholders of the parent company excluding non-recurring gains and losses was RMB982mn, up 246.34% YoY. In 2Q26, the company recorded revenue of RMB8.186bn, up 47.22% YoY; net profit attributable to shareholders of the parent company was RMB1.274bn, up 440.45% YoY; net profit attributable to shareholders of the parent company excluding non-recurring gains and losses was RMB792mn, up 341.60% YoY.

Risks

(1) Risk of fluctuations in downstream demand: The company operates across multiple sectors, including displays, home appliances, automotive electronics, and education. Changes in demand in these sectors may affect the company’s orders and revenue growth. If demand in downstream markets such as consumer electronics and home appliances falls short of expectations, growth in the company’s core businesses may come under pressure. (2) Risk of raw material price fluctuations: Intelligent control components account for a relatively high share of the company’s business. The costs of products such as LCD controller boards are affected by the prices of raw materials, including memory chips. If the prices of major raw materials continue to rise, the company’s gross margin and profitability may be adversely affected. (3) Risk of slower-than-expected new business expansion: The company continues to expand into new businesses, including automotive electronics, power electronics, industrial control, AI for education, and robotics. Some businesses are still in the process of commercialization and large-scale deployment. If market expansion, product deployment, or commercialization progresses more slowly than expected, the company’s subsequent earnings growth may be affected. (4) Risks related to overseas operations and exchange rate fluctuations: The company continues to expand brands such as MAXHUB overseas, and overseas revenue is gradually increasing as a share of total revenue. Overseas markets may be affected by factors such as market competition, trade policies, and exchange rate movements, which may in turn affect the expansion and profitability of the company’s overseas operations.