Supor Maintained at Neutral: 100% Dividend Payout Continues, FY26 Margins Expected to Improve
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Supor Maintained at Neutral: 100% Dividend Payout Continues, FY26 Margins Expected to Improve
UBS believes Supor's 2025 revenue grew slightly while net profit declined; FY26 margins may improve on new product launches, premiumization, and expense normalization, but domestic competition and export uncertainty still need monitoring.
- 2025 revenue/net profit were Rmb22,772mn/Rmb2,097mn, up 2%/down 7% YoY, corresponding to -1%/-10% YoY in 4Q25, broadly in line with the February earnings flash.
- The 2025 payout ratio remained at 100%, extending the high payout level of 100% or above since 2022; 2026E dividend yield is about 6%.
- Management's FY26 targets are positive sales growth and improved net margin; 1Q26 sales are expected to be driven by domestic business growth, while exports will face pressure from a high base, but margins may improve sequentially.
- UBS slightly cut 2026-28E EPS by 0-1%, while keeping the target price at Rmb46.90, based on the DCF method and implying 16.9x 2026E PE.
Report interpretation
Overview
This report is UBS's review of Zhejiang Supor's 4Q25 and 2025 results. The company posted 2% YoY revenue growth and a 7% YoY decline in net profit in 2025; 4Q25 revenue and net profit declined 1% and 10% YoY, respectively. UBS believes the results were in line with the earlier flash announcement and maintains a Neutral rating and Rmb46.90 target price.
Core views
The core views are: first, domestic sales remained resilient, growing about 1% YoY in 4Q25 on Groupe SEB's controlling shareholder basis, partly offsetting weak export sales; second, domestic demand in 2026 is likely to remain soft and competition intense, with small appliances not included in the 2026 national subsidy program, so the brand may continue to self-subsidize; third, export targets are unchanged, with related-party transactions with Groupe SEB expected to grow about 6% YoY, and cooperation to expand in North America may partly offset weak European demand; fourth, new products and premiumization, especially titanium-material products and core categories such as rice cookers and frying pans, may lift ASP; fifth, normalization of selling expense ratio and launches of higher-margin new products in 2026 could improve net margin.
Analysis framework
The report analyzes the business along the lines of earnings breakdown, management guidance, channel and regional sales trends, cost and expense pressure, dividend policy, valuation multiples, and DCF target price, while distinguishing the 12-month rating from short-term quantitative research review.
Methodology notes
discounted cash flow valuation
UBS's target price is based on the DCF method. The target price remains Rmb46.90, corresponding to about 16.9x 2026E PE and implying a 2025-27E EPS CAGR of about 7%.
forecast total stock return
Forecast stock return is the sum of the expected share price appreciation over the next 12 months and dividend yield; in this report, the forecast share price appreciation is 2.0%, the forecast dividend yield is 6.0%, and the forecast stock return is 8.1%.
12-month rating
The 12-month rating in this report is Neutral, reflecting a combined judgment after considering target price, dividend return, market return assumptions, and risk factors.
Asset mapping & comparison
Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).
- Zhejiang Supor / 002032.SZresearch subject
- Strengths
- Leads market share in China's cookware and small kitchen appliances market, with Groupe SEB holding 83%, a high payout ratio, resilient domestic sales, and ASP improvement through new products and premium materials.
- Weaknesses
- 2025 net profit declined YoY, 4Q25 net margin was dragged by selling expenses and self-subsidies, and domestic demand remains soft with intense competition.
- Comparison
- Compared with the roughly 70% payout ratio in 2018-21, the payout ratio has remained at 100% or above since 2022, significantly increasing shareholder returns.
- Risks
- Intensifying price competition, rising raw material costs, weak export demand, and lower-than-expected new product development or sales.
- Groupe SEBcontrolling shareholder and related-party transaction counterparty
- Strengths
- Holds 83% of Supor and cooperates with Supor in product development and manufacturing, helping it expand in North America.
- Weaknesses
- European demand is soft due to geopolitical uncertainty, which may affect export-related growth.
- Comparison
- Related-party transactions with Groupe SEB are expected to grow about 6% YoY in 2026.
- Risks
- Geopolitical conflicts, weak European demand, and export order volatility.
- Raw materials: aluminum, steel, plasticscost driver
- Strengths
- The company has prepared raw material inventory, especially for export orders, and uses hedging, supplier negotiations, and internal cost reduction measures.
- Weaknesses
- Rising material prices still squeeze gross margins.
- Comparison
- The report identifies raw material cost inflation as one of the main downside risks.
- Risks
- Continued increases in aluminum, steel, and plastic prices, with hedging and inventory strategies unable to fully offset cost pressure.
Key data
- 2025 revenueRmb22,772mnUp 2% YoY.
- 2025 net profitRmb2,097mnDown 7% YoY.
- 4Q25 revenue/net profit YoY-1% / -10%Derived from full-year results.
- 12-month ratingNeutralUBS maintains a Neutral rating.
- Target priceRmb46.90Target price unchanged based on the DCF method.
- Current priceRmb45.96Price on 2026-04-03.
- 2026E dividend yield6.0%UBS считает this level attractive.
- Forecast stock return8.1%Includes 2.0% forecast share price upside and 6.0% forecast dividend yield.
- 2025 payout ratio100%Extends the high payout ratio of 100% or above since 2022.
- 2026-28E EPS revisionDown 0-1%Reflects uncertainty in export sales, geopolitics, and material costs.
Impact & implications
The implication for the investment view is that Supor's high payout and stable cash returns provide defensiveness, while the expected FY26 margin improvement offers some support; however, the Neutral rating indicates limited valuation upside, and domestic price competition, export demand, raw materials, and freight disruptions may still cap earnings elasticity.
Risks
- Further intensification of domestic price competition.
- Raw material cost inflation, especially rising aluminum, steel, and plastic prices.
- New product development or sales falling short of expectations.
- Export sales affected by geopolitics, soft European demand, or a high base.
- If the selling expense ratio fails to normalize, it will continue to weigh on net margin.
What to watch
- Whether FY26 domestic sales achieve positive growth and how intense competition becomes after small appliances are excluded from national subsidies.
- The degree of pressure on 1Q26 exports from the high base and execution of the full-year export target.
- Whether the roughly 6% growth target for related-party transactions with Groupe SEB is achieved.
- Whether premium new products such as titanium-material products drive ASP and gross margin improvement.
- Whether the selling expense ratio normalizes as the impact of self-subsidies fades.
- Changes in raw material costs and freight rates such as aluminum, steel, and plastics.
- The sustainability of the 100% dividend payout policy and cash flow support.