JPMorgan: Cuts Three Flowers Intelligent Control's target price to HKD 42, maintains "Overweight" rating

SadMoneyMeow · 2026-03-26T19:41:33+00:00

JPMorgan research report shows that Sanhua Intelligent Controls' 2025 performance is roughly in line with expectations, with gross margin and cash flow exceeding expectations. Management forecasts a 15% year-over-year increase in net profit in 2026. The target price has been lowered to HKD 42 for H-shares and CNY 60 for A-shares, with a "Buy" rating maintained. The company is expanding in data centers and robotics, supporting long-term profit growth.

SadMoneyMeow

2026-03-26 19:41:33

Abstract generation in progress

JPMorgan released a research report stating that Sanhua Intelligent Controls (02050) roughly met preliminary performance expectations in Q4 2025, with gross profit margin and operating cash flow both exceeding forecasts. Management expects net profit to grow about 15% year-over-year in 2026, reflecting a more cautious and pragmatic stance. The bank has lowered its profit forecasts for 2026 to 2027 by approximately 8% and has introduced a forecast for 2028. The H-share target price has been reduced from HKD 45 to HKD 42, and the A-share target price for Sanhua Intelligent Controls (002050.SZ) has been lowered from RMB 64 to RMB 60, maintaining an “Overweight” rating.

Management expects that revenue from data center cooling-related business will be about RMB 2 billion in 2025, accounting for approximately 6% of total revenue, with a target of 50% to 100% year-over-year growth in 2026. In the robotics sector, the company is expanding from a single customer to a broader client base and independently developing core components such as actuators. Communication regarding Tesla’s robotics project has become more cautious, reflecting the sensitivity of business relationships. Regarding overseas capacity, expansion in Thailand, Mexico, Vietnam, and Poland is progressing as planned to support global supply chain resilience.

The bank believes that Sanhua Intelligent Controls’ prudent profit margin and cash flow management, solid core business, and strategic layout in high-growth areas like robotics and data centers will support long-term profitability and value growth.

(Author: Guo Jiandong)

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