UBS upgrades Anker Innovations to Buy, arguing the energy storage business growth potential is underestimated

Overview

UBS issued a research report on Anker Innovations, raising the rating from Neutral to Buy and increasing the target price from Rmb120 to Rmb155. The core view is that while the market has already largely reflected gross margin pressure and the slowdown in core mature categories during the valuation reset after 3Q25 earnings disappointment, it still underestimates the medium-term growth potential from the energy storage business, Europe balcony solar and storage demand, and the company’s product innovation platform.

Core views

The report’s key views include: first, the energy storage business is expected to become the main growth driver in 2026 and beyond, with projected 2025-28E sales CAGR of 41% and revenue contribution rising from 15% to 24%; second, demand for Europe balcony solar and energy storage has structural support, including high electricity prices, peak-valley spreads, policy support, apartment and tenant use cases, and better economics plus shorter payback periods than traditional home battery systems; third, the 4Q25 gross margin performance confirms that cost pressure can be offset by product mix upgrading, new products, high-margin categories, cost control, capacity relocation, and proactive FX hedging; fourth, current valuation is not expensive relative to growth, with 15x 2027E PE corresponding to 2026-28E EPS CAGR of 22% and PEG around 0.7x.

Analysis framework

The report combines top-down Europe energy storage demand analysis, channel research, UBS Evidence Lab Sensor Tower app download data, segment-level revenue and profit forecasting, PE/PEG valuation framework, and upside/base/downside scenario analysis to assess Anker Innovations’ growth elasticity and valuation re-rating potential.

Methodology notes

• Valuation methods2027E PE and PEG

  Derive the target price using 2027E target PE multiple and EPS forecasts, and use PEG to measure the alignment of valuation and growth.

  UBS raised the target PE from 17x to 21x and derived a Rmb155 target price based on 2027E EPS of Rmb7.34; a 21x 2027E PE corresponds to a 2026-28E EPS CAGR of 22%, and a PEG of about 1.0x, close to the average among comparable companies.

• Scenario AnalysisUpside/Base/Downside Scenarios

  Assess the equity value range using different assumptions for business growth, gross margin, EBIT margin, and valuation multiples.

  The upside scenario target price is Rmb210, the base scenario is Rmb155, and the downside scenario is Rmb70; the key assumption differences come from sales CAGR in smart charging and energy storage, smart home and innovation, smart AV, as well as 2027E gross margin and EBIT margin.

• Alternative DataUBS Evidence Lab Sensor Tower App Downloads and Usage

  Use app download and usage data as supporting evidence of changes in smart charging and energy storage demand.

  The report cites data showing total/US/Europe Anker-related app download and usage year-over-year growth in 1Q26 accelerated to 52%/95%/40%, above 4Q25 levels of 28%/40%/27%.

Asset mapping & comparison

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

• Anker Innovations (300866.SZ)

  Research target; rating upgraded from Neutral to Buy

  Strengths

  Global brands Anker, eufy, and soundcore cover smart charging and energy storage, smart home and innovation, and smart AV; it has consumer insight, system integration, branding, and fast product innovation capabilities.

  Weaknesses

  The core U.S. market is close to 50% of FY25 sales, while slowing growth in mature categories and gross margin pressure have previously weighed on market expectations.

  Comparison

  Current valuation is about 15x 2027E PE and 0.7x PEG, below the historical average around 1.0x PEG; the base-case target price corresponds to 21x 2027E PE.

  Risks

  Demand below expectations, price competition, rising tariffs and component costs, FX volatility, and slower-than-expected new product ramp.

• Europe balcony solar and energy storage

  The fastest-growing key driver within the energy storage business

  Strengths

  Cost around EUR1,000-2,000 and payback period around 3-4 years, more cost-effective than traditional home battery systems at EUR15,000-20,000 with 8-10 year paybacks; suitable for apartments, smaller homes, and renters, and supports plug-and-play plus DIY installation.

  Weaknesses

  Demand remains sensitive to European policy, electricity prices, channel expansion, and consumer acceptance.

  Comparison

  The report expects 2025-28E sales CAGR for balcony solar and energy storage to be 53%, faster than the roughly 30% CAGR of other product categories.

  Risks

  Weaker policy support, declining electricity prices, intensified competition, or changes in regulatory requirements.

• Smart home and innovation business

  Contributing to growth and gross margin improvement

  Strengths

  Includes new products such as RVC, UV printer, and mom&baby; eufy is expanding into infant monitoring, feeding, and wearable breast pumps.

  Weaknesses

  Commercialization and scale-up of new products are still in the ramp-up phase.

  Comparison

  Base case assumes 2026-28E sales CAGR of 18%, upside case 26%, and downside case 10%.

  Risks

  New product order fulfillment or overseas launches underperform expectations, and price competition compresses margins.

Key data

• 12-month ratingBuyPrior rating was Neutral.
• Target priceRmb155.00Prior target price was Rmb120.00.
• Current priceRmb111.85As of 2026-04-15.
• Implied upsideabout 39%The report text says the new target price implies 39% upside; the expected price gain is 38.6%.
• 2026-28E revenue/earnings growth2026E revenue growth 25%, earnings growth 24%UBS raised 2026-28E earnings forecasts by 3-5%.
• Energy storage business growth2025-28E sales CAGR 41%Revenue contribution is expected to rise from 15% to 24%.
• Balcony solar and energy storage growth2025-28E sales CAGR 53%Higher than the roughly 30% growth pace of other product categories.
• Valuation15x 2027E PE, 0.7x PEGCorresponding to 2026-28E EPS CAGR of 22%, below the historical average PEG of about 1.0x.
• 4Q25 gross marginYoY +3 percentage points, QoQ +1 percentage pointMix upgrades, new products, and cost control offset tariff, component cost, and FX pressure.
• Europe portable power station performance1Q26 sales YoY grew at triple-digit pace, about 20% market shareThe report states share is second only to Ecoflow at about 60%.

Impact & implications

If UBS’s assessment plays out, Anker Innovations’ investment case would shift from relying on slower growth in mature consumer electronics categories to a medium-term growth story driven by energy storage, balcony solar, emerging categories, and global channels. On valuation, upward revisions to earnings forecasts and the target PE increase could lead to stock re-rating; however, realization still depends on sustained Europe energy storage demand, manageable tariff and cost pressure, and the pace of scaling new products.

Risks

• Demand below expectations due to weak consumer sentiment.
• Increased price competition in domestic and international markets.
• Ramp-up of new categories or new products is slower than expected.
• Rising tariffs and higher costs for lithium batteries and chips.
• FX swings causing FX losses, especially from USD, EUR, GBP, and JPY exposure.
• Changes in policy support, electricity prices, or regulatory environment for Europe balcony solar and energy storage.

What to watch

• European balcony solar and energy storage order trends, channel feedback, and market share changes.
• Whether energy storage business revenue contribution rises from 15% toward 24%.
• Whether gross margin after 4Q25 can remain broadly flat year-over-year in 2026 and improve through base effects in 2H26.
• Delivery, launches, and margin performance of new products including UV printer, mom&baby, and sleeping earbuds.
• U.S. tariffs, lithium battery and chip costs, RMB-USD exchange rate movements, and the company’s hedging effectiveness.
• Whether UBS Evidence Lab app download data continue to accelerate in the U.S. and Europe.