Guojin Securities: Initiates Buy Rating on Sanhua Intelligent Controls

Guojin Securities Co., Ltd. Chen Chuanhong and Ran Ting recently conducted research on Sanhua Intelligent Controls and published the research report “Performance in Line with Expectations, Continuous Improvement in Profitability,” giving Sanhua Intelligent Controls a “Buy” rating.

Sanhua Intelligent Controls (002050)

On March 23, the company released its 2025 annual report, showing that in 2025, revenue reached 31.012 billion yuan, a year-on-year increase of 10.97%; net profit attributable to shareholders was 4.063 billion yuan, up 31.1% year-on-year; gross profit margin was 28.78%, up 1.31 percentage points; net profit margin was 13.24%, up 2.11 percentage points.

In Q4 2025, revenue was 6.982 billion yuan, down 5.44% year-on-year; net profit attributable to shareholders was 821 million yuan, up 2.93% year-on-year; gross profit margin was 31.16%, up 4.32 percentage points, and up 3.15 percentage points quarter-on-quarter; net profit margin was 11.71%, up 0.98 percentage points year-on-year, but down 3.11 percentage points quarter-on-quarter.

Operational Analysis

Commentary: Performance in line with expectations, broken down as follows:

1. Revenue: Refrigeration segment defies the trend with growth. Refrigeration and air conditioning appliance parts revenue was 18.585 billion yuan, up 12.22% year-on-year; automotive parts revenue was 12.427 billion yuan, up 9.14%. The high growth in refrigeration and air conditioning business is mainly driven by increased demand from export data centers and other commercial refrigeration sectors. According to Industry Online, the export scale of central air conditioning in 2025 will reach 26.14 billion yuan, a 12.7% increase year-on-year. The growth rate of automotive parts slowed, likely due to pressure on core major clients’ sales and a slowdown in the new energy vehicle industry.

2. Gross Margin: Significant improvement in Q4 gross margin. Refrigeration and air conditioning appliance parts gross margin was 28.77%, up 1.42 percentage points; automotive parts gross margin was 28.79%, up 1.15 percentage points. The company’s gross margin increase in Q4 is mainly attributed to linked pricing mechanisms and commodity futures hedging operations.

3. Expense Ratio: In Q4, selling/administration/financial/ R&D expense ratios were 4.54%/8.28%/1.16%/3.87%, respectively, representing increases of 0.81/3.43/1.72/1.00 percentage points year-on-year, and quarter-on-quarter increases of 2.91/2.76/1.38/1.26 percentage points. Overall, expense ratios increased, mainly due to active expansion into new businesses and capacity expansion in Thailand, Mexico, Poland, and Vietnam.

4. Others: The company’s floating stock loss was approximately 70.53 million yuan, indicating that the actual core business performance growth is even more significant.

Profit Forecast, Valuation, and Rating

We forecast that from 2026 to 2028, revenue will be 36.5, 40, and 43.5 billion yuan, respectively, with net profit attributable to shareholders of 4.69, 5.28, and 5.82 billion yuan. The current market capitalization corresponds to a valuation of approximately 38.2, 34.4, and 30.8 times PE. Due to the company’s continued efforts in data center thermal management and its leading position in the actuator core track of biomimetic robots, we maintain a “Buy” rating.

Risk Warning

Downstream demand falls short of expectations; industry competition intensifies; progress in new business development is slower than expected.

Latest profit forecast details:

In the past 90 days, six institutions have issued ratings for this stock, with three “Buy” and three “Hold” ratings; the average target price among institutions over the past 90 days is 59.5.

The above content is compiled by Securities Star based on publicly available information, generated by AI algorithms (Wangxin Algorithm Backup 310104345710301240019), and does not constitute investment advice.