Goldman Sachs is positive on RVC demand resilience in the second quarter, names Roborock as top pick, and remains relatively cautious on Ecovacs

Overview

This report is Goldman Sachs’ 2Q26 earnings preview for Roborock and Ecovacs, leading RVC and cleaning appliance companies within China consumer durables. The report notes that year to date, both companies have significantly underperformed consumer durables peers and the CSI300, mainly due to concerns over growth pressure from a high domestic base, slowing overseas demand, competition from Dreame, cost inflation, and FX headwinds. However, Goldman Sachs believes second-quarter fundamentals were generally more resilient: domestic demand was better than feared, overseas demand remained strong, RVC pricing was relatively stable, and some non-recurring factors also helped offset FX pressure.

Core views

The core conclusion is that industry demand has not shown the clear slowdown feared by the market, and stock divergence is widening. Roborock is viewed as better positioned to continue outperforming the industry, driven by RVC share gains, expansion into new products such as floor washers, breakthroughs in US offline channels, and margin recovery after scaling back investments in washer-dryer businesses. Ecovacs still benefits from overseas growth and investment income support, but faces greater competitive pressure in domestic RVC and floor washers, and its growth is expected to be slower than Roborock’s. Therefore, the report maintains a Buy rating on Roborock and a Sell rating on Ecovacs.

Analysis framework

The report combines analysis of domestic 618 online sales, market share on Taobao/Tmall and JD.com, overseas RVC app downloads, Amazon US sales and ASP data, company management commentary on subsidies and pricing strategy, and Goldman Sachs’ earnings forecast model. For valuation, Roborock’s target price is based on 2028E EPS and a 17x exit P/E, discounted back to 2027E at a 9.5% cost of equity; Ecovacs’ target price is based on 2028E EPS and a 16x exit P/E, also discounted at a 9.5% cost of equity.

Methodology notes

• Valuation methodsDiscounted valuation using exit P/E multiple

  Apply a target P/E to forward EPS, then discount by the cost of equity

  Roborock’s 12-month target price of Rmb170 is based on 2028E EPS, a 17x exit P/E, and a 9.5% cost of equity; Ecovacs’ 12-month target price of Rmb56 is based on 2028E EPS, a 16x exit P/E, and a 9.5% cost of equity.

• Demand trackingCross-validation using 618, e-commerce sales, app downloads, and Amazon US data

  Use multi-channel high-frequency indicators to assess the strength of domestic and overseas RVC demand

  The report uses domestic 618 GMV, online share, overseas app downloads, Amazon US sales, and ASP changes to assess demand, share, and pricing trends.

• Factor analysisGS Factor Profile

  Compare individual stocks with the market and industry peers across four categories: Growth, Financial Returns, Multiple, and Integrated

  This framework uses Goldman Sachs forecasts and standardized rankings for sales, EBITDA, EPS, ROE, ROCE, CROCI, P/E, P/B, and other metrics to show the relative positioning of a stock in terms of growth, returns, and valuation.

• M&A scenarioM&A Rank

  Classify covered companies into ranks 1 to 3 based on potential acquisition probability

  The report discloses the M&A Rank framework, where 1 represents high probability, 2 medium probability, and 3 low probability; Roborock’s page shows M&A Rank 3, so M&A has limited impact on the target price.

Asset mapping & comparison

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

• Beijing Roborock Technology(688169.SS)

  Top pick in the report, rated Buy, with a 12-month target price of Rmb170

  Strengths

  A global RVC leader, advancing overseas channel expansion, especially into key US offline retail channels such as COSTCO; gaining RVC share, expanding into new categories such as floor washers and potentially robot lawn mowers; and having room for margin recovery after reducing investment in loss-making or inefficient new businesses.

  Weaknesses

  Margins were previously hurt by overinvestment in new products, US tariffs, business model transitions in Europe, and self-funded subsidies in the China market; valuation multiples are also constrained by competition and geopolitical uncertainty.

  Comparison

  Relative to Ecovacs, Roborock is expected to deliver faster revenue and profit growth in 2Q26, more evident overseas share gains, and better defensiveness in a slowing-demand scenario due to its US offline channels and overseas expansion in floor washers.

  Risks

  Intensifying competition in China and overseas; weaker-than-expected new product launches or expansion into new categories; overly aggressive brand and marketing spending that erodes profitability; macro weakness dragging on discretionary consumption; and higher US tariffs reducing profitability in the US business.

• Ecovacs Robotics Co.(603486.SS)

  Covered stock, rated Sell, with a 12-month target price of Rmb56

  Strengths

  A leading player in China’s cleaning appliance market, with dual brands Ecovacs and Tineco, a relatively complete product portfolio, and online-offline distribution network; it also still has potential to gain share in overseas markets.

  Weaknesses

  Faces greater competitive pressure in domestic RVC and floor washers, especially with rising growth pressure off a high base; may sacrifice margins while defending share, leaving its risk-reward less attractive than peers.

  Comparison

  The report expects Ecovacs to deliver around 15% revenue and profit growth in 2Q26, below Roborock’s approximately 27% revenue growth and 20% profit growth; its target price implies only 1.3% upside versus the current price, significantly weaker than Roborock.

  Risks

  If macro conditions improve and demand recovery is faster than expected, product development and category expansion exceed expectations, or competition eases, Ecovacs could see upside beyond the report’s expectations.

Key data

• Roborock 2Q26 forecast YoY revenue and profit growthRevenue +27%；profit +20%The report believes growth is driven by RVC share gains, expansion in floor washers, and margin recovery.
• Ecovacs 2Q26 forecast YoY revenue and profit growthRevenue +15%；profit +15%Growth mainly comes from overseas revenue and investment income from portfolio companies, but the pace is expected to be slower than Roborock’s.
• Cleaning appliance GMV during 618Both Roborock and Ecovacs achieved more than 20% YoY growthThis helps offset seasonal weakness before and after major promotions.
• Change in Roborock’s domestic online market shareRVC share up 10ppt to 35%；floor washer share up 13ppt to 29%Based on 2Q26 data from JD.com, Taobao, and Tmall.
• Domestic online share of Ecovacs/TinecoRVC about 30%；floor washers about 28%The report says share was broadly stable, with Ecovacs/Tineco at about 30% and 28%, respectively.
• Overseas RVC industry demandApp downloads and Amazon US sales both indicate around 40% YoY growthAmazon US was particularly strong in June due to the earlier timing of Prime Day.
• Roborock EPS forecast revision2026E EPS Rmb7.86, raised 12.3%；2027E Rmb9.89, raised 4.8%；2028E Rmb11.92, raised 3.1%The upward revision reflects revenue growth and margin recovery.
• Ecovacs EPS forecast revision2026E EPS Rmb3.18, raised 4.8%；2027E Rmb3.56, raised 6.2%；2028E Rmb3.91, raised 5.7%The upward revision reflects overseas growth and improved margin assumptions.
• Roborock target price and upside12-month target price Rmb170；current price Rmb102.2；upside 66.3%Price as of 2026-07-20.
• Ecovacs target price and upside12-month target price Rmb56；current price Rmb55.3；upside 1.3%Price as of 2026-07-20.

Impact & implications

The report’s investment implication is that the market may have been overly pessimistic about domestic high-base effects, overseas energy prices, and competition-driven margin pressure, and that second-quarter demand and pricing resilience could support expectation recovery for the cleaning appliance sector. However, with competition and geopolitical uncertainty still elevated, earnings upgrades may not fully translate into valuation rerating, making stock selection more important. Goldman Sachs believes Roborock offers better growth quality and relative risk-reward, while Ecovacs lacks sufficient upside due to domestic competitive pressure and relative growth disadvantages.

Risks

• Further intensification of competition in domestic and overseas cleaning appliances, especially if competitors such as Dreame ramp up investment again.
• High overseas energy prices or macro weakness weighing on discretionary demand, leading to slower overseas RVC growth.
• Cost inflation and adverse FX movements eroding gross margin and net margin.
• Higher US tariffs or geopolitical tensions affecting the overseas profitability and valuation multiples of Chinese brands.
• Expansion into new categories such as floor washers, robot lawn mowers, or other SKUs falling short of expectations.
• Overly aggressive brand marketing investment causing revenue growth to fail to convert into profit growth.

What to watch

• Whether reported 2Q26 revenue, net profit, and margins validate Goldman Sachs’ resilience thesis.
• Whether domestic RVC and floor washer demand continues after 618 rather than merely being pulled forward by the promotional event.
• The ramp-up speed of Roborock sales in US offline channels such as COSTCO and changes in overseas share.
• Whether Amazon US RVC sales volume, ASP, and the share of leading Chinese brands continue to improve.
• Whether Dreame’s competitive strategy is indeed contracting and whether industry price subsidies intensify again.
• The actual contribution of non-recurring items such as RMB exchange rates, tariff refunds, and investment income to profits.
• Roborock’s overseas expansion in floor washers and Ecovacs/Tineco’s defense of domestic market share.