Core Viewpoint - The company's revenue for the first three quarters of FY26 slightly missed expectations, primarily due to ongoing pressures in the Chinese market, with total revenue decreasing from $2.73 billion to $2.73 billion year-on-year [1] Group 1: Automotive Business - The automotive sector experienced a revenue decline of 2% year-on-year, with the Asia-Pacific region seeing a 6% drop, which was below expectations due to project delays from domestic automakers [1] - The EMEA region's revenue decreased by 1%, while the Americas region saw a 1% increase, aligning with expectations [1] - The company anticipates that the release of orders from domestic automakers will help revenue return to a growth trajectory, leveraging global capacity and technological advantages to capitalize on the transition to new energy vehicles [1] Group 2: Industrial Business - The industrial sector showed a slight revenue increase year-on-year, stabilizing despite a challenging global market, with regional performance varying [2] - The Asia-Pacific region's revenue decreased by 1%, while the EMEA region increased by 6% driven by inventory replenishment and new product launches; the Americas region saw a 2% decline [2] - Future growth is expected to come from new businesses, including liquid cooling AIDC and robotics, with ongoing collaborations and initial production ramp-ups [2] Group 3: Financial Outlook - The company projects that FY26 annual revenue will remain flat year-on-year, while profitability is expected to face pressure in the second half due to inflationary costs and sales challenges [2] - Net profit forecasts for FY26 and FY27 have been revised down by 3.4% and 3.1% to $254 million and $271 million, respectively, reflecting challenges in the automotive sector and rising raw material costs [2] - The current stock price corresponds to a P/E ratio of 13.6x for FY26 and 12.6x for FY27, with a target price adjustment down by 8.6% to HKD 39.85, indicating a potential upside of 40.4% from the current price [2]
德昌电机控股(00179.HK)：中国汽车业务持续承压；静待新兴业务成长