CITIC International raised the target price of SANHUA to 49 yuan, maintaining an "outperform market" rating

Jianyin International's research report indicates that SANHUA (02050.HK)(002050.SZ) announced strong performance for the third quarter of 2025, with revenue, net profit, and core profit growing by 13%, 44%, and 49% year-on-year, respectively, compared to growth of 19%, 39%, and 35% in the second quarter of 2025. The gross profit margin remained stable at 27.5%, while the expense ratio decreased by 2.8 percentage points to 12.3% in the third quarter of 2025.

Jianyin International stated that during the earnings briefing, management reaffirmed its profit guidance. Jianyin International expects SANHUA's net profit to grow by approximately 30% in 2025, with a projected growth of about 20% in 2026. The traditional air conditioning heating and cooling industry is being driven by new demands for liquid cooling and battery storage. Ongoing supply shortages and the company's technological reserves will make SANHUA a passive winner in this niche market.

Jianyin International noted that the forecasted price-to-earnings ratios for SANHUA's A-shares and H-shares in 2026 are 44 times and 33 times, respectively, which are relatively high; however, it believes that its strong fundamentals, A-share repurchase commitment, and the upcoming Optimus V3 catalyst set to debut in the first quarter of 2026 will support the stock price in the medium term.

Based on a higher forecasted price-to-earnings ratio of 48 times (previously 45 times), Jianyin International raised SANHUA's A-share target price from RMB 49 to RMB 55. Correspondingly, Jianyin International also raised the H-share target price from HKD 46 to HKD 49; both A-shares and H-shares maintain an "outperform" rating