Leading RVC players delivered 1Q26 results above expectations, but 2Q competition, promotions, and overseas demand resilience remain the key variables

Overview

This report reviews the 1Q26 results of leading Chinese robot vacuum cleaner and cleaning appliance companies, and updates earnings forecasts, ratings, and target prices for Roborock and Ecovacs. The report believes that both companies’ first-quarter revenue growth and profits were better than market concerns, but as they enter the second quarter, China’s 618 promotions, an earlier Amazon Prime Day overseas, geopolitical uncertainty, rising energy prices, and plastic cost inflation could all affect demand and margins.

Core views

Goldman Sachs maintains a relative preference for Roborock, believing that its rising share in China’s cleaning appliance market, overseas channel expansion, and progress in new products such as wet-dry vacuum cleaners and robotic lawn mowers are likely to support faster growth and margin recovery. It maintains a Sell rating on Ecovacs; although the company has the dual-brand advantage of Ecovacs and Tineco, along with channel and product portfolio strengths, competition in China’s cleaning appliance market is intense, especially in wet-dry vacuum cleaners, and defending share may continue to come at the expense of margins.

Analysis framework

The report combines company 1Q26 results, online and offline industry sales data, ASP trends, brand market share, overseas app download growth, product expansion progress, and valuation models to revise forecasts for 2026E to 2028E revenue, gross margin, operating profit, net profit, and EPS for both companies, and uses a discounted P/E approach to derive 12-month target prices.

Methodology notes

• Valuation methodsDiscounted P/E

  Use 2028E EPS multiplied by the exit P/E, then discount back to 2027E using a 9.5% cost of equity to derive the 12-month target price.

  Roborock’s target price of Rmb170 is based on an 18x exit P/E; Ecovacs’ target price of Rmb55 is based on a 17x exit P/E.

• Industry trackingSales, ASP, and market share monitoring

  Track demand and the competitive landscape through domestic online and offline channel sales growth, average selling prices, brand share, and overseas app download data.

  The report cites data from AVC, Moojing, and SensorTower to conclude that the domestic industry declined year on year but improved sequentially, while overseas demand remained strong.

• Earnings forecastEPS forecast revision

  Revise 2026E to 2028E EPS based on the latest results, revenue growth, gross margin, expenses, and competitive assumptions.

  Goldman Sachs lowered Roborock’s 2026E to 2028E EPS by about 3% to 6%, while raising Ecovacs’ 2026E to 2028E EPS by about 10% to 13%.

Asset mapping & comparison

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

• Beijing Roborock Technology (688169.SS)

  Core covered company, rated Buy

  Strengths

  A global leader in robot vacuum cleaners, with growth potential driven by overseas channel expansion, brand marketing investment, and new product expansion in categories such as wet-dry vacuum cleaners and robotic lawn mowers; prior profit headwinds have largely eased.

  Weaknesses

  Margins in markets such as Europe may be affected by competition, while rising promotional intensity both domestically and overseas may pressure gross margin.

  Comparison

  Relative to Ecovacs, Goldman Sachs believes Roborock has stronger share gain and new product expansion potential, with a more attractive risk-reward profile.

  Risks

  Intensified competition in domestic and overseas markets; new product launches or expansion into new categories below expectations; marketing investment affecting profitability; weaker macro conditions reducing disposable income and consumer confidence; higher U.S. tariffs squeezing profits from the U.S. business.

• Ecovacs Robotics Co. (603486.SS)

  Core covered company, rated Sell

  Strengths

  A leading player in China’s cleaning appliance market, with the dual brands of Ecovacs in robot vacuum cleaners and Tineco in wet-dry vacuum cleaners, and a relatively complete product portfolio and online/offline channel presence.

  Weaknesses

  Competition in China’s cleaning appliance market, especially in wet-dry vacuum cleaners, is intense; defending market share may continue to pressure margins, while growth pressure is rising against a high base.

  Comparison

  Relative to Roborock, Goldman Sachs believes Ecovacs has a weaker risk-reward profile, and current valuation does not yet fully reflect competitive and growth pressures.

  Risks

  If the macro environment improves, demand recovers faster than expected, new product development or expansion performs better than expected, or competition eases, these could pose upside risks to the share price.

Key data

• Roborock rating and target priceBuy; 12-month target price Rmb170; latest price about Rmb115.43The target price is based on an 18x 2028E exit P/E and a 9.5% cost of equity.
• Ecovacs rating and target priceSell; 12-month target price Rmb55; latest price about Rmb61.64; downside of 10.8%The target price is based on a 17x 2028E exit P/E and a 9.5% cost of equity.
• 1Q26 revenue performanceBoth companies achieved revenue growth of more than 20%Growth was driven by demand for robot vacuum cleaners, new product expansion, and contributions from overseas markets.
• Roborock 2026E EPS revisionLowered from Rmb7.43 to Rmb7.00, a change of about -5.8%Mainly reflects margin competition risk in regions such as Europe.
• Ecovacs 2026E EPS revisionRaised from Rmb2.70 to Rmb3.04, a change of about +12.5%Mainly reflects better-than-expected overseas expansion of new products, especially robotic lawn mowers.
• Domestic share changesIn 1Q26, Roborock’s share in robot vacuum cleaners and wet-dry vacuum cleaners rose by 2 percentage points and 12 percentage points year on year to 27% and 22%; Ecovacs/Tineco stood at 28% and 26%Within the corresponding categories for Ecovacs/Tineco, one was stable and the other declined by 5 percentage points year on year.
• Overseas demandOverseas RVC app downloads in 1Q26 maintained year-on-year growth of more than 40%Goldman Sachs believes that global share gains by Chinese leaders and new product expansion continue to support overseas growth.

Impact & implications

The investment implication of this report is that 1Q26 earnings beats do not mean 2Q26 margin risks have disappeared. Investors need to distinguish the structural differences between the companies: Roborock’s global share gains and product expansion can offset part of the industry’s competitive pressure, while Ecovacs appears relatively weaker in earnings elasticity and valuation attractiveness amid a high domestic base and intensifying competition.

Risks

• Intensifying competition in domestic and overseas markets could increase pressure on pricing, promotions, and marketing spending.
• Key promotional events such as 618 and Amazon Prime Day could depress second-quarter margins.
• Rising plastic prices could create cost inflation and further increase year-on-year margin pressure.
• Conflict in the Middle East could push up energy prices and affect the resilience of overseas discretionary consumption demand.
• RMB appreciation could lead to foreign-exchange losses and affect export and overseas business profits.
• New product launches, category expansion, or overseas channel expansion may fall short of expectations.

What to watch

• The intensity of 2Q26 domestic 618 promotions and brand marketing efforts.
• The impact of an earlier Amazon Prime Day on overseas demand and pricing strategy.
• Demand resilience and app download growth for RVCs in overseas markets, especially the United States and Europe.
• Roborock’s overseas rollout of wet-dry vacuum cleaners, U.S. channel expansion, and progress in robotic lawn mowers.
• How Ecovacs and Tineco defend their market share in China’s robot vacuum cleaner and wet-dry vacuum cleaner markets.
• The impact of plastic prices, exchange rates, U.S. tariffs, and energy prices on costs and margins.