Ninebot Ltd (689009) Report Interpretation

Overview

This earnings review argues that Ninebot’s stronger-than-expected 2Q26 results reinforce Goldman Sachs’ view that the company can gain share despite weak industry demand. The institution expects robotic lawn mowers, electric two-wheelers and overseas expansion to support continued growth and improving profitability, and reiterates Buy.

Core views

Ninebot’s 2Q26 results exceeded Goldman Sachs’ expectations. First-half revenue and net profit were Rmb14,358mn and Rmb1,008mn, respectively, representing 22% year-on-year revenue growth and a 19% decline in net profit. This implies 2Q revenue growth of 28% year on year, accelerating from 15% in 1Q, while net profit grew 2% after a 55% decline in 1Q. Core operating profit increased 22% in 2Q, reversing a 22% decline in 1Q. Goldman Sachs attributes the revenue beat chiefly to stronger-than-expected robotic lawn mower growth and the profit beat to a greater contribution from that higher-margin business. In its view, the result demonstrates continued share gains even in a weak demand environment, with industry conditions and cyclical factors improving sequentially in 2Q. For 2H26, the institution expects robust revenue momentum and further profit improvement. Robotic lawn mower growth should remain strong, although it is expected to moderate sequentially from more than 150% year-on-year growth in 2Q as the category enters its lighter season. Goldman Sachs expects this moderation to be offset by faster electric two-wheeler growth: the company shipped another one million E2W units between late June and late July, compared with 1.6mn units in 2Q, which the report views as evidence of acceleration aided by peak-season product launches. It also expects E2W margins to improve sequentially on better sales, mix and more disciplined discounts. Continued growth in consumer scooters and off-road vehicles should partly offset seasonally softer business-to-business scooter sales. The result is a forecast for more than 20% revenue growth in 3Q, with sequentially accelerating profit growth; both revenue and profit growth are expected to accelerate further in 4Q on a lower comparison base. Management’s segment commentary supports the thesis but also identifies differing near-term drivers. E2W demand has faced national-standard changes, cost inflation and fading subsidies, but management maintained its annual sales target and expects higher 3Q volume, average selling prices and gross margin. A rising electric-motorcycle mix is expected to continue over the medium to long term, though its contribution should fall sequentially in 3Q versus 1H. Consumer electric scooters are benefiting from industry growth and share gains; management believes industry volume could at least double over the medium to long term given low penetration versus bicycles, while cost reductions and mix improvement should sustain current margins. Robotic lawn mower management still targets doubled 2026 sales and expects mix-led ASP improvement, but notes that 1H gross margin fell because of cost inflation and may improve sequentially in 2H without quickly returning to the prior roughly 55% level. The company is working with three Southeast Asian factories to mitigate possible anti-dumping duties next year. Off-road vehicle sales were above expectations in 1H, supported by expansion outside the US and growth in Europe, with scale helping profitability. Goldman Sachs’ longer-term investment thesis is that Ninebot can become an emerging global leader in micro-mobility and robotic lawn mowers. It highlights domestic E2W share gains supported by product research and development, smarter functions, channel expansion, wider offerings through a dual-brand strategy, and rising membership-fee contribution. It sees robotic lawn mowers as a structural adoption opportunity versus traditional products, where Ninebot’s portfolio, brand and offline-channel presence may support further share gains. It also identifies overseas e-bike opportunities in developed markets and longer-run potential in ASEAN, where internal-combustion two-wheeler ownership is large and electric-two-wheeler penetration remains low. Following the results and updated business-line assumptions, Goldman Sachs raises 2026E-2028E EPS by 2%. Its forecasts call for revenue of Rmb26,719mn in 2026E, Rmb32,631mn in 2027E and Rmb38,252mn in 2028E, with EBIT of Rmb2,279mn, Rmb2,855mn and Rmb3,690mn. The Rmb64 12-month target price, increased from Rmb62, is based on a 16x exit P/E multiple applied to 2028E EPS and discounted back to 2027E using an unchanged 9.5% cost of equity. The report states that the shares trade at 17x 2026E and 12x 2027E P/E, below their three-year average forward P/E of 21x, and reiterates Buy.

Analysis framework

Goldman Sachs compares the earnings outcome with its expectations, traces the revenue and margin drivers by business line, and uses management-call guidance to assess the 2H26 path. It then updates earnings estimates and values the shares using an exit P/E multiple on 2028E EPS discounted back using a cost of equity.

Methodology notes

• Valuation methodsP/E and PEG Valuation

  Exit P/E valuation discounted to an earlier forecast year

  Goldman Sachs applies a 16x exit P/E multiple to 2028E EPS and discounts that value back to 2027E using a 9.5% cost of equity to derive the Rmb64 target price.

• Industry AnalysisVolume-price decomposition

  Segment-level volume, pricing, product-mix and margin analysis

  The report explains growth and profit recovery through unit shipments, product launches, ASP, discount discipline, mix shifts and gross-margin changes across E2W, scooters, robotic lawn mowers and off-road vehicles.

Asset mapping & comparison

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

• Ninebot Ltd (689009.SH)

  Primary covered company; the report expects share gains and a higher-margin mix to support revenue growth and profit recovery.

  Strengths

  Robotic lawn mower growth, domestic E2W product and channel capabilities, consumer-scooter share gains, and overseas expansion potential.

  Weaknesses

  Robotic lawn mower gross margin declined in 1H because of cost inflation and may not quickly return to the prior roughly 55% level.

  Comparison

  The shares trade at 17x/12x 2026E/2027E P/E, below the stated three-year average of 21x forward P/E.

  Risks

  Weaker consumer demand, delayed launches or category expansion, competition, tariffs or anti-dumping duties, and higher raw-material costs.

Key data

• 1H26 revenueRmb14,358mn+22% year on year
• 1H26 net profitRmb1,008mn-19% year on year
• 2Q26 revenue growth+28% yoyVersus +15% yoy in 1Q26
• 2Q26 core operating profit growth+22% yoyVersus -22% yoy in 1Q26
• Robotic lawn mower 2Q26 growth150%+ yoyExpected to moderate seasonally in 3Q while management maintains a doubled-sales goal for 2026
• 2026E-2028E EPS revision+2%Raised following the latest results and updated assumptions
• Target priceRmb64Up from Rmb62; based on 16x 2028E exit P/E and a 9.5% cost of equity
• Valuation17x/12x 2026E/2027E P/EBelow the stated three-year average of 21x forward P/E

Impact & implications

Goldman Sachs believes the earnings beat strengthens its case that Ninebot can outgrow a weak industry through share gains and a more favorable product mix. It expects E2W margin recovery and continued growth in robotic lawn mowers, consumer scooters and off-road vehicles to improve profits over the coming quarters.

Risks

• Weaker macro conditions could reduce disposable income and consumer confidence.
• Product launches or new-category expansion could be slower than expected.
• Competition could intensify in domestic or overseas markets.
• Potential tariffs or anti-dumping duties could reduce profitability.
• Raw-material costs could be higher than expected.