Key takeaway

In 9M26, the company recorded revenue of RMB25.252bn, up 39.61% YoY. 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 were RMB2.477bn/RMB1.977bn, up 185.63%/189.37% YoY, respectively. In 3Q26, net profit attributable to shareholders of the parent company excluding non-recurring gains and losses was RMB995mn, up 148.97% YoY and 25.70% QoQ, exceeding the aggregate level for 1H26. 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 12x/11x/10x. We maintain our “Buy” rating.

Event

In 9M26, the company recorded revenue of RMB25.252bn, up 39.61% YoY; net profit attributable to shareholders of the parent company was RMB2.477bn, up 185.63% YoY; net profit attributable to shareholders of the parent company excluding non-recurring gains and losses was RMB1.977bn, up 189.37% YoY. In 3Q26, the company recorded revenue of RMB10.863bn, up 44.41% YoY; net profit attributable to shareholders of the parent company was RMB956mn, up 103.62% YoY; net profit attributable to shareholders of the parent company excluding non-recurring gains and losses was RMB995mn, up 148.97% YoY.

Quick Take Core business profitability continues to materialize, with concurrent improvements in expense efficiency and cash

flow. In 9M26, the company recorded revenue of RMB25.252bn, up 39.61% YoY. 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 were RMB2.477bn/RMB1.977bn, up 185.63%/189.37% YoY, respectively. Selling expense, administrative expense, R&D expense, and financing expense ratios were 3.51%/4.19%/5.38%/-0.01%, changing by -0.92/-0.34/-1.01/+0.05 pcts YoY, respectively. Revenue scale effects drove operating leverage. Net cash flow from operating activities was RMB2.291bn in 9M26, up 123.72% YoY.

Ending inventory was RMB6.131bn, down 21.28% from end-1H26, while contract liabilities reached RMB2.566bn, up 6.72% from end-1H26. Inventory digestion and improved sales collections jointly drove the recovery of working capital.

In 3Q26, the company recorded revenue of RMB10.863bn, up 44.41% YoY; net profit attributable to shareholders of the parent company was RMB956mn, up 103.62% YoY; net profit attributable to shareholders of the parent company excluding non-recurring gains and losses was RMB995mn, up 148.97% YoY and 25.70% QoQ, exceeding the aggregate RMB982mn recorded in 1H26. Gross margin was 24.68% in 3Q26, up 4.64 pcts YoY. Net cash flow from operating activities was RMB3.380bn.

Board business sustains rapid growth, while expansion across multiple businesses enhances growth sustainability. In addition to LCD main control boards benefiting from rising memory prices and strategic inventory buildup in the earlier period, the home appliance controller, automotive electronics, and enterprise services businesses have also established a solid foundation for growth. In 1H26, revenue from these three businesses was RMB1.677bn/RMB909mn/RMB1.714bn, up 29.07%/371.48%/38.43% YoY, respectively. The company’s revenue increased 44.41% YoY in 3Q26, sustaining rapid growth. We expect the board business to maintain strong growth, with further strengthening of growth momentum in home appliance controllers, automotive electronics, enterprise services, and other businesses. In automotive electronics, new customers and design win projects are gradually entering mass production, while product expansion in smart cockpits and invehicle audio systems is driving revenue growth. In enterprise services, the company is further broadening its growth drivers by optimizing its channel network, strengthening marketing in key industries, and improving its service system, alongside overseas product promotion and localized operations for MAXHUB. Robotics use cases and ecosystem partnerships advance, further clarifying the commercialization path. In August 2026, the company showcased the MAXHUB D3 seven-axis humanoid dual-arm robot, X7 industrial-grade quadruped robot, and C3 series commercial cleaning robots at the World Robot Conference. It also launched seven solutions spanning four major use cases: education and training, power inspection, commercial retail, and air-ground collaboration. Regarding ecosystem partnerships, the company provided the D3 dual-arm hardware platform for T-WAVES, Nanjing TetraBOT’s general-purpose industrial embodied AI fusion model. The two companies have completed joint validation of model-hardware adaptation in typical industrial use cases, including pressing buttons on electrical cabinets, and demonstrated tasks such as operating knobs on power distribution cabinets. In overseas markets, the C3 Plus commercial cleaning robot has secured partnerships with customers in more than 10 countries, including Japan, South Korea, Singapore, and European countries. Synergies among self-developed core components, complete robot products, and use-case solutions are expected to support subsequent customer acquisition and product sales. Investment recommendation: With demand rebounding in the display and education sectors, alongside the company’s deployment of AI foundation models and overseas market expansion, its operations are expected to recover. We forecast revenue of RMB31.580bn/RMB36.111bn/RMB40.637bn for 2026 –2028, up 29.67%/14.35%/12.54% YoY, and net profit attributable to shareholders of the parent company of RMB2.544bn/RMB2.631bn/RMB2.958bn, up 151.07%/3.41%/12.43% YoY. This corresponds to P/E multiples of 12x/11x/10x. We maintain “Buy” rating.

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.