Han's Laser 1Q26 results beat expectations, with strong 2026 revenue guidance

Overview

This report is Morgan Stanley's commentary on Han's Laser's 1Q26 results. The report believes that both the company's first-quarter revenue and recurring net profit significantly exceeded expectations, with growth coming from multiple business segments including PCB, 3C, new energy, and low-power general laser. Management provided a relatively positive 2026 revenue target, expecting total revenue to exceed Rmb25bn.

Core views

The core views are: first, demand for PCB, 3C, and battery equipment is driving solid growth in new orders; second, the 3C business is being supported by product innovation from key customers in Vapor Chamber and optical components; third, a higher share of high value-added PCB products such as Back Drilling, along with a higher contribution from the 3C business, will support gross margin expansion over the coming quarters; fourth, profitability in the new energy business is expected to recover, with management expecting a net margin of about 5% in 2026, a significant improvement from an approximate Rmb100mn net loss in 2025.

Analysis framework

The report uses first-quarter financial performance, revenue growth by business segment, gross margin changes, order trends, and management's 2026 revenue guidance as its main analytical threads, and combines these with the SOTP valuation method to assess the company's value.

Methodology notes

• Valuation methodsSOTP

  sum-of-the-parts valuation

  Morgan Stanley uses the SOTP valuation method, applying 30x 2026E P/E to the non-PCB business; the PCB business is valued based on the market capitalization of subsidiary Han's CNC and Han's Laser's current ownership stake.

Asset mapping & comparison

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

• Han's Laser (002008.SZ)

  Research coverage target; A-share listed company

  Strengths

  Strong growth in 1Q26 revenue and recurring net profit; high growth in PCB and 3C businesses; product mix improvement driving gross margin expansion; strong 2026 revenue guidance.

  Weaknesses

  Semiconductor equipment revenue declined 12% YoY and 57% QoQ; some businesses such as new energy are still in the profitability recovery stage; first-quarter revenue declined 15% QoQ.

  Comparison

  Compared with 1Q25, 1Q26 revenue increased 74% YoY, recurring net profit increased 468% YoY, and gross margin improved 2.1 percentage points YoY.

  Risks

  The new energy business may incur more impairments; Apple equipment demand may be weaker than expected; FX impact and customer order timing may affect earnings delivery.

• Han's CNC

  PCB-related subsidiary, included in SOTP valuation reference

  Strengths

  Strong growth in PCB business revenue, with 1Q26 PCB equipment revenue up 104% YoY; high value-added products lifted gross margin.

  Weaknesses

  Valuation depends on the subsidiary's market value and Han's Laser's ownership stake, and is affected by market volatility.

  Comparison

  PCB business gross margin improved 3.5 percentage points YoY to 33.1%.

  Risks

  If breakthroughs in new contracts with overseas PCB customers fall short of expectations, business valuation and growth delivery may be affected.

Key data

• 1Q26 revenueRmb5.135bn, +74% YoY, -15% QoQRevenue growth was jointly driven by the PCB, 3C, new energy, and low-power general laser businesses.
• 1Q26 recurring net profitRmb408mn, +468% YoY, +69% QoQExceeded Morgan Stanley and market consensus expectations, supported by revenue growth, gross margin expansion, and operating leverage.
• 1Q26 gross margin34.0%, +2.1 percentage points YoYImproved product mix drove gross margin expansion; PCB gross margin rose 3.5 percentage points YoY to 33.1%.
• PCB equipment revenueRmb1.955bn, +104% YoYA higher contribution from high value-added PCB products was an important factor behind the gross margin improvement.
• 3C equipment revenueRmb970mn, +273% YoYGrowth came from increased demand for Vapor Chamber and optical components from key customers.
• New energy equipment revenueRmb580mn, +93% YoYManagement expects profitability in the new energy business to recover to around a 5% net margin in 2026.
• 2026 revenue guidanceTotal revenue exceeding Rmb25bnOf which PCB is targeted at over Rmb10bn, 3C at Rmb3.5-4bn, and new energy at around Rmb3.5-4bn.
• Target price and ratingOverweight, target price Rmb85.00The report lists the closing price on April 20, 2026 as Rmb89.18.

Impact & implications

The results and guidance reinforce the company's growth logic, especially the trends of orders and product upgrades in the PCB and 3C businesses. If high value-added PCB products, demand from key 3C customers, and the profitability recovery in new energy continue to materialize, the company's margins and earnings quality are likely to keep improving. However, the current target price is below the closing price on the report date, implying that the rating's relative return judgment should be understood in the context of Morgan Stanley's industry coverage framework and the 12-18 month time horizon.

Risks

• If profitability improvement in China's manufacturing sector falls short of expectations, companies' willingness to undertake capital expenditure may weaken.
• Breakthroughs in new contracts with overseas customers in the PCB market may fall short of expectations.
• The new energy business may see more impairments.
• Apple equipment demand may be weaker than expected.
• Negative FX impact may continue to drag on profit performance.

What to watch

• Whether 2026 PCB revenue can exceed Rmb10bn.
• Delivery of the 3C business revenue target of Rmb3.5-4bn, especially demand for Vapor Chamber and optical components.
• Whether the new energy business can recover from losses in 2025 to around a 5% net margin.
• The ongoing contribution of high value-added PCB products such as Back Drilling to gross margin.
• Progress in negotiations with key 3D printing customers and the pace of order placement.
• AI-related application opportunities, including optical modules, liquid cooling, and TGV.