Key takeaway

In 2Q26, the company generated revenue/net profit attributable to shareholders of the parent company of RMB658mn/RMB85mn, respectively, up YoY by 43. 8 %/53. 6 %. The company recorded strong earnings growth, mainly driven by the consolidation of Jiandun. In energy storage system fire protection, Jiandun benefited from growing overseas demand for energy storage and achieved project breakthroughs in China. Meanwhile, the implementation of the new national standard for wind power fire protection is expected to generate incremental demand for hot aerosol fire extinguishing devices. As an industry leader, the company is expected to benefit significantly. The traditional special vehicle business delivers stable growth and provides a safety cushion, while the energy storage firefighting business benefits from industry expansion and certification barriers to achieve high growth. Under this dual-engine model, the company’s growth prospects are clear.

Event

The company released its 1H26 results. In 1H26, the company generated revenue/net profit attributable to shareholders of the parent company/adjusted net profit attributable to shareholders of the parent company of RMB1,178mn/RMB128mn/RMB127mn, up 46.67%/52.41%/101.72% YoY. In particular, in 2Q26, the company generated revenue/net profit attributable to shareholders of the parent company/adjusted net profit attributable to shareholders of the parent company of RMB658mn/RMB85mn/RMB84mn, up 43.79%/53.58%/143.21% YoY and 26.44%/96.57%/94.99% QoQ.

Quick Take

Earnings were in line with consensus, with the consolidation of Jiandun driving strong growth. In 1H26, the company generated revenue/net profit attributable to shareholders of the parent company of RMB1,178mn/RMB128mn, up 46.67%/52.41% YoY, mainly driven by the consolidation of Jiandun. After Jiandun was included in the scope of consolidation in February 2026, it contributed consolidated revenue of RMB433mn and consolidated net profit of RMB130mn. The difference between consolidated net profit and Jiandun's standalone profit was mainly due to the remeasurement and adjustment of the fair value of Jiandun's assets. Excluding this impact, consolidated net profit from February to June was approximately RMB167mn.

Energy storage system fire protection business: Overseas operations benefited from growing demand for energy storage systems, while the domestic business achieved project breakthroughs. 1) Overseas market: The company's core market is benefiting significantly from surging overseas demand for energy storage. In 1H26, Jiandun's standalone financial statements recorded revenue of RMB516mn and net profit of RMB203mn, with both revenue and earnings growing rapidly. 2) Domestic market: The company made breakthrough progress in securing key customers and expanding into China's utility-scale energy storage market. Some strategic customers have completed commercial negotiations and placed formal orders, while others have entered the product sampling and trial installation verification stages. A utility-scale energy storage project in Shanghai was also successfully delivered and commissioned.

The implementation of the new national standard for wind power fire protection will generate incremental demand for hot aerosol fire extinguishing devices. As an industry leader, the company is expected to benefit significantly. The new national standard GB/T 47723 for wind power fire protection will take effect in September. For enclosed, energized spaces such as hub control cabinets, nacelle electrical cabinets, and box-type substations at the base of wind turbine towers, the national standard explicitly recommends S-type condensed aerosol fire extinguishing systems. In the supporting configuration examples for the three mainstream turbine types—doubly fed, direct-drive, and semi-directdrive— condensed aerosol fire extinguishing systems are listed as the standard protection solution for precision electrical equipment.

Special-purpose vehicle business: Steady growth in aerial work vehicles and power supply vehicles, with YoY declines in fire engines and rescue vehicles. The company maintained a solid market position in aerial work vehicles and achieved steady growth. In 1H26, the company’s aerial work vehicle business generated revenue of RMB423mn, up 17.35% YoY, with a gross margin of 38.0%, broadly flat YoY. In 1H26, the company’s power supply vehicle business generated revenue of RMB171mn, up 2.03% YoY, with a slight increase in gross margin. For fire engines, the company’s subsidiary Graman generated revenue of RMB108mn in 1H26, down 15.1% YoY, and net profit of RMB15mn.

Operating cash flow improved, while the consolidation of Jiandun led to significant increases in period expenses and inventories. In 1H26, the company’s net cash flow from operating activities was RMB- 142mn, mainly due to the payment of acquisition consideration and other factors. Net operating cash flow was RMB35mn in 2Q26, a significant improvement QoQ from 1Q26. The company’s period expenses totaled RMB130mn in 2Q26, up nearly RMB50mn QoQ, mainly due to the consolidation of Jiandun. We expect the higher selling expense base to become normalized going forward. The company’s inventories totaled RMB509mn in 1H26, up RMB250mn from the beginning of the year. We expect this was mainly due to ① advance inventory stocking in anticipation of strong energy storage demand in 2H26; and ② a higher base following the consolidation of Jiandun.

Earnings forecast: The company’s traditional special-purpose vehicle business delivers steady growth and provides a safety cushion, while its energy storage fire protection business benefits from industry expansion and certification barriers to achieve high growth. Under this dual-engine model, the company’s growth prospects are clear. We expect the company to generate net profit attributable to shareholders of the parent company of RMB460mn/RMB800mn in 2026/2027, implying P/E multiples of 31.0x/17.7x. We maintain Buy rating.

Risks

1) Risk of changes in energy storage fire protection industry standards: The energy storage fire protection sector relies heavily on standards in different countries. If standards change, it may affect the progress and delivery pace of the company’s energy storage fire protection business.

2) Downstream demand falling short of expectations: If energy storage system installations fall below expectations, the company’s shipment and growth performance in new businesses such as energy storage fire protection will be affected.

3) Demand fluctuation risk for special-purpose vehicles: Special-purpose vehicles (aerial work platforms, fire rescue vehicles, power emergency support vehicles, etc.) are sensitive to macro investment and industry cycle s. If the pace of infrastructure and grid investment slows or the procurement cycle for municipal emergency equipment is delayed, the growth of the company’s core business may face pressure.

4) Grid investment and policy volatility risk: If grid investment, emergency equipment procurement, and related policy implementation fall short of expectations, the growth pace of the company’s core and new businesses may be affected.