Anker Innovations' 4Q gross margin beats expectations; energy storage could become a new growth driver in 2026

Overview

This report is UBS's earnings review of Anker Innovations Technology. The company's FY25 revenue and net profit were Rmb30,514m and Rmb2,545m, with YoY growth of 23% and 20%, respectively. 4Q25 revenue still grew but slowed versus prior periods, while net profit declined YoY mainly due to asset impairment losses from conservative accounting treatment. UBS believes the market may view the company's margin resilience amid cost headwinds and its 2026 outlook positively.

Core views

The core view is: first, 4Q25 gross margin came in better than expected, as the company offset tariff, component cost and FX pressure through product mix upgrades, growth in high-margin subscription services and cost control; second, the energy storage business may become the main growth driver in 2026, benefiting in particular from higher electricity prices in Europe, new policy support and rising share in balcony solar-storage scenarios; third, R&D spending will remain at a relatively high level, with a focus on underlying technologies and cross-category reuse capabilities; fourth, on valuation, although earnings forecasts were raised, the rating remains Neutral because the current share price is close to the target price.

Analysis framework

The report combines earnings decomposition, segment growth comparison, a margin bridge and valuation multiple adjustments, focusing on the gap between actual 4Q25 performance and expectations, and mapping energy storage growth, gross margin resilience and changes in 2026 earnings forecasts to the target P/E and target price.

Methodology notes

• valuation methodP/E multiple valuation

  Target price based on 2026E net profit and target P/E multiple

  UBS raised the 2026E target P/E from 19x to 21x and increased its 2026E net profit forecast by 2% to reflect a more optimistic growth outlook for the energy storage business and profit growth from gross margin resilience.

• performance analysissegment growth decomposition

  Break out revenue performance by smart charging and energy storage, smart home and innovation, and smart audio and video

  The report lists the YoY growth for each major business in 4Q25 and 2025 to assess the sources of revenue slowdown and future growth engines.

• margin analysisgross margin and cost headwind analysis

  Use product mix, subscription services, cost control and FX hedging to explain gross margin changes

  4Q25 gross margin increased 3ppt YoY and 1ppt QoQ despite pressure from US tariffs, portable energy storage component cost increases and FX volatility.

Asset mapping & comparison

Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).

• Anker Innovations Technology (300866.SS)

  coverage name in the report

  Strengths

  The global brand portfolio covers Anker, eufy and soundcore, with products sold in more than 180 countries and regions; energy storage, smart home, and audio/video categories provide diversified growth sources; gross margin remains resilient despite cost headwinds.

  Weaknesses

  4Q25 net profit declined YoY, affected by asset impairment; revenue growth in the charging and energy storage segment slowed QoQ in 4Q; higher R&D spending and tax burden may weigh on short-term margins.

  Comparison

  Compared with prior forecasts, UBS raised 2025-27E earnings by 2-6% and lifted the target P/E from 19x to 21x, reflecting a more optimistic view on energy storage and gross margin.

  Risks

  Demand weaker than expected, intensifying price competition, slower-than-expected product ramp-up, higher tariffs or component costs, and FX losses.

Key data

• FY25 revenueRmb30,514mUp 23% YoY.
• FY25 net profitRmb2,545mUp 20% YoY.
• 4Q25 revenue growth+15% YoYRevenue growth slowed versus prior periods, mainly related to the charging and energy storage segment.
• 4Q25 net profit growth-5% YoYThe YoY decline was mainly due to asset impairment losses.
• 4Q25 gross margin change+3ppt YoY / +1ppt QoQStill delivered a better-than-expected improvement despite cost pressure.
• 2025 energy storage revenueRmb4.5bnUp 50% YoY, driven by portable energy storage and balcony solar-storage products.
• 2025 R&D headcount growth+33% YoYThe R&D expense ratio rose 1ppt YoY in 4Q25.
• Effective tax rate6% in 2024 to 10% in 2025Mainly due to top-up tax under global anti-base-erosion rules.
• Target priceRmb120Raised from Rmb105, with the Neutral rating maintained.
• Target P/E21x 2026E PEPreviously 19x.

Impact & implications

The report is constructive on Anker Innovations but does not amount to a clear buy recommendation. In the short term, gross margin resilience and energy storage growth expectations should help support market sentiment; in the medium term, European energy storage demand, the expansion of balcony solar-storage markets and entry into new markets may improve revenue growth visibility; however, the current share price is close to the target price and upside is limited, so the rating remains Neutral.

Risks

• Weak consumer sentiment leads to weaker-than-expected demand.
• Price competition intensifies in domestic and overseas markets.
• New categories or new product sales ramp more slowly than expected.
• Tariffs or component costs rise further.
• FX volatility creates foreign exchange losses.
• Asset impairments, higher tax rates or heavy R&D spending may affect near-term profitability.

What to watch

• The sustainability of European energy storage demand in 2026, especially changes in electricity prices, policy support and balcony solar-storage penetration.
• Changes in Anker Solix's share in balcony solar-storage scenarios, and progress in entering new markets such as the UK.
• Whether charging product supply-chain issues have been fully resolved and the impact on the recovery of revenue growth.
• Order delivery and sales ramp-up after the official China launch of the UV printer in April and overseas launch in May.
• Whether gross margin can continue to offset tariff, component cost and FX volatility.
• Whether heavy R&D spending translates into cross-category technology reuse and higher new-product success rates.