Orbbec's first-half revenue was nearly flat, but gross margin improved significantly, while robotics and overseas operations are expected to drive renewed growth acceleration

Overview

This report reviews Orbbec's 1H26 results and analyzes its growth trajectory from 2H26 through 2027. Nomura believes that first-half revenue was nearly flat due to weakness in the consumer applications business, but a higher share of high-margin products delivered a notable improvement in gross margin. Sales growth is expected to re-accelerate as robotics, data collection, and overseas operations scale up. Despite lowering its earnings forecasts, the firm maintains its Buy rating and CNY130 target price.

Core views

Orbbec announced its first-half results on August 20, 2026. Revenue was CNY437.6mn, up 0.5% YoY, indicating nearly stagnant overall growth, but the revenue mix changed significantly. The company said that revenue from vision solutions sold to the global robotics market more than doubled YoY, while direct overseas revenue also nearly doubled. A higher share of high-margin products in the sales mix drove gross margin up 7.28 percentage points YoY to 48.55%, indicating that expansion into emerging end markets has begun to improve revenue quality. However, the improvement in gross margin did not translate into higher current-period profit. Combined selling, administrative, and R&D expenses increased from 38.8% of revenue in the same period last year to 46.0%. R&D expenses rose 22.2% YoY to CNY111.4mn due to an increase in R&D personnel, equivalent to 25.5% of revenue, while government grants declined 41.7% YoY to CNY14.8mn. Expense expansion fully absorbed the gross profit improvement, resulting in a 30.8% YoY decline in net profit to CNY41.6mn. Therefore, the first-half results reflected an improving product mix, while profit remained constrained by expenses during the investment phase. Nomura expects robotics, data collection, and overseas sales to drive renewed sales acceleration in 2H26. As signals of business preparation and order activity, period-end inventory increased 38.0% from the end of 2025 to CNY256.2mn, mainly due to raw-material stocking, while contract liabilities rose 36.2% to CNY24.9mn, reflecting increased customer prepayments. The firm views these changes together with the enhanced product portfolio as evidence that the company has established a more comprehensive supply foundation for subsequent volume growth. In data collection, the company's products now cover four form factors: EGO for first-person-view data collection, UMI for handheld operation, WristCam for capturing near-field wrist details, and Hub for synchronization. Its robotic vision products span both vision-only and 3D perception technologies. Vision-only products include monocular 2D, multi-camera 2D, interpupillary-baseline stereo vision, and wrist-mounted stereo vision, while 3D products include structured light, ToF, and LiDAR. Nomura believes that a comprehensive product line covering both target architectures will help the company address different robotics and data collection scenarios, providing an important foundation for renewed revenue acceleration in 2H26 and 2027. Regarding long-term capacity, the company's factory in Vietnam, covering more than 100,000 square meters, is expected to be completed in 2027. Nomura believes that the factory can support the expansion of the company's revenue sources and complement growth in overseas operations. The report also notes that the company uses 3D vision technology to improve the safety and efficiency of autonomous robots, potentially reducing resource waste in automation processes. Its low-environmental-impact visual perception products can operate under different lighting conditions while reducing light pollution and energy consumption. Considering the weak sales growth in 1H26 caused by softness in the consumer applications business, as well as the increase in share count, Nomura lowered its 2026 and 2027 EPS forecasts from CNY0.89 and CNY1.48 to CNY0.49 and CNY0.69, respectively. However, the firm maintains its Buy rating and CNY130 target price because the robotics-driven growth thesis and product mix improvement remain intact. The target price is based on 22x 2027F P/S, compared with the previous methodology of 18x 2028F P/S. The 22x multiple is 0.3 standard deviations below the company's four-year average P/S of 25x and is supported by an estimated sales CAGR of 56% from 2025 to 2028, with growth driven by the biometrics, 3D printing, and robotics businesses. At the time of publication, the stock was trading at 17x 2027F P/S, with the CSI 300 as the valuation benchmark index. Based on the August 21, 2026 closing price of CNY101, the CNY130 target price implies upside of +28.7%.

Analysis framework

The report first breaks down the first-half results by revenue growth, product mix, gross margin, and expense investment to explain why revenue was nearly flat while profit declined. It then assesses sales readiness through inventory, contract liabilities, and the breadth of robotics and data collection products, while evaluating the medium- to long-term expansion path based on overseas revenue and capacity in Vietnam. Finally, Nomura adjusts its EPS forecasts and determines the target price using 2027F P/S, the historical valuation range, and the projected 2025–2028 sales CAGR.

Methodology notes

• Valuation methodologyPS valuation

  Comparison of forward P/S with the historical valuation range

  Nomura derives its CNY130 target price using 22x 2027F P/S and compares this multiple with the company's four-year average P/S of 25x. The applied multiple is 0.3 standard deviations below the historical average. The report supports it with an estimated sales CAGR of 56% from 2025 to 2028 and notes that the stock is currently trading at 17x 2027F P/S.

Asset mapping & comparison

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

• Orbbec Inc (688322CH)

  The report believes that the company will benefit from growth in robotics, data collection, and overseas sales, as well as a higher share of high-margin products.

  Strengths

  Strong growth in robotic vision solutions and direct overseas revenue; comprehensive data collection and robotic vision product lines; 1H26 gross margin increased by 7.28 percentage points YoY.

  Weaknesses

  Weakness in the consumer applications business left revenue growth nearly stagnant; the ratio of R&D and other operating expenses rose to 46.0%, preventing the gross margin improvement from translating into profit growth; 2026 and 2027 EPS forecasts were lowered.

  Comparison

  The target price is based on 22x 2027F P/S, below the four-year average P/S of 25x; the stock currently trades at 17x 2027F P/S, with the CSI 300 as the benchmark.

  Risks

  Slower-than-expected scaling of the robotics business, intensified competition reducing prices and market share, and weaker demand in the biometrics market.

Key data

• 1H26 revenueCNY437.6mnUp 0.5% YoY, broadly flat overall
• 1H26 gross margin48.55%Up 7.28 percentage points YoY, mainly due to the higher share of high-margin products
• Robotic vision solutions revenueMore than doubled YoYSales to the global robotics market
• Direct overseas revenueNearly doubled YoYAccelerating overseas business expansion
• Selling, administrative, and R&D expense ratio46.0%Compared with 38.8% in the same period last year
• R&D expensesCNY111.4mnUp 22.2% YoY, accounting for 25.5% of revenue
• Government grantsCNY14.8mnDown 41.7% YoY
• 1H26 net profitCNY41.6mnDown 30.8% YoY
• InventoryCNY256.2mnUp 38.0% from the end of 2025, mainly due to raw-material stocking
• Contract liabilitiesCNY24.9mnUp 36.2% from the end of 2025, reflecting increased customer prepayments
• 2026 EPS forecastCNY0.49Lowered from CNY0.89
• 2027 EPS forecastCNY0.69Lowered from CNY1.48
• Target price valuation22x 2027F P/SPreviously 18x 2028F P/S; corresponding to a CNY130 target price
• Historical average P/S25xFour-year average; the target-price multiple is 0.3 standard deviations below it
• Current valuation17x 2027F P/SForward P/S at the time of report publication
• Estimated sales CAGR56%2025–2028 forecast period
• Vietnam factoryMore than 100,000 square metersExpected to be completed in 2027
• Target price and implied upsideCNY130; +28.7%Based on the CNY101.00 closing price on August 21, 2026

Impact & implications

The report believes that Orbbec's first-half data indicate that the business is transitioning from a phase of insufficient revenue growth and elevated investment expenses toward a product mix upgrade driven by robotics, data collection, and overseas markets. Gross margin has already improved, but earnings realization still depends on whether sales can accelerate as expected and cover high R&D and other operating expenses. The comprehensive product line, increased customer prepayments, raw-material stocking, and capacity in Vietnam provide a foundation for subsequent expansion, while the lowered EPS forecasts reflect near-term pressure from weakness in the consumer applications business and the increased share count.

Risks

• The robotics business may scale more slowly than expected, weakening the foundation for renewed sales growth acceleration.
• Intensified competition may pressure product prices and market share.
• Weaker demand in the biometrics market may weigh on the company's growth.

What to watch

• Whether robotics, data collection, and overseas sales accelerate as expected in 2H26 and 2027.
• Whether the rising share of high-margin products continues to support gross margin and whether revenue growth can cover elevated operating expenses.
• Whether the raw-material stocking reflected in inventory growth can be successfully converted into sales.
• Whether the demand indicated by increased customer prepayments materializes as subsequent revenue.
• Whether the Vietnam factory covering more than 100,000 square meters is completed on schedule in 2027 and supports the expansion of revenue sources.
• The impact of competition on product prices and market share, as well as the effect of biometrics demand.