Leadshine Technology's 1Q26 earnings beat expectations; Nomura maintains Buy and raises target price to CNY56.4

Overview

This is an earnings review report on China Leadshine Technology (002979.SS). Nomura believes the company's 2025 and 1Q26 results both beat expectations, with growth driven by recovery in its traditional industrial automation business, product upgrades, channel optimization, and volume ramp-up in new humanoid robot core component businesses. The report maintains a Buy rating and raises the target price to CNY56.4.

Core views

The core view is that the company has dual growth drivers: on one hand, traditional industrial automation businesses such as servo systems, stepper systems, and control technology continue to expand; on the other hand, humanoid robot core components have entered major customer supply chains, with both deliveries and capacity buildout advancing rapidly. Although rising raw material prices may pressure gross margin, Nomura still raises its revenue and net profit forecasts and believes the company has stronger earnings growth potential than peers.

Analysis framework

The report takes the earnings beat as its starting point and analyzes the company based on segment revenue growth, market share, robot component shipments, gross margin assumptions, and P/E valuation. Valuation uses 2026F EPS multiplied by a 60x target P/E, compared with the peer average 2026E P/E of 55x, assigning a premium to reflect stronger profit growth potential.

Methodology notes

• Valuation methodsTarget P/E Multiple Method

  2026F EPS × target P/E

  The target price of CNY56.40 is based on 2026F EPS of CNY0.94 and a 60x target P/E. This multiple is above the peer average 2026E P/E of 55x, mainly reflecting the company's stronger earnings growth potential.

• Earnings ForecastRevenue and Profit Forecast Revisions Upward

  Adjust forecasts based on demand recovery, product upgrades, and incremental contribution from robotics

  Nomura raised its 2026F/2027F revenue forecasts by 12.1%/18.3%, respectively, and its net profit forecasts by 3.5%/8.2%, respectively, while also adding a new 2028F forecast.

• Risk AssessmentRisks to Target Price Realization

  Macro, domestic brand penetration, and new business expansion risks

  The report notes that weaker-than-expected macro recovery, slower-than-expected domestic brand penetration, or slower-than-expected expansion of new businesses could hinder realization of the target price.

Asset mapping & comparison

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

• China Leadshine Technology（002979.SS）

  Report coverage target; maintains Buy rating and raises target price

  Strengths

  Its industrial automation core business is solid, with a strong position in the servo system market; small PLCs are growing rapidly; humanoid robot core components have entered leading customer supply chains; its earnings growth potential is considered stronger than peers.

  Weaknesses

  Gross margin may be dragged down by rising raw material prices; new businesses are still in the volume ramp-up and capacity buildout stage.

  Comparison

  The 60x target P/E is above the peer average 2026E P/E of 55x, with the premium coming from stronger expected earnings growth.

  Risks

  Weaker-than-expected macro recovery, slower-than-expected penetration of domestic brands, and slower-than-expected expansion of new businesses.

• CSI 300 Index

  A-share benchmark index

  Strengths

  Serves as the benchmark for the A-share rating and relative performance in the report.

  Weaknesses

  It does not represent company-specific fundamentals and is only used as a benchmark for relative return comparison.

  Comparison

  A Buy rating indicates the analyst expects the stock to outperform the benchmark over the next 12 months.

  Risks

  Overall market volatility may affect realization of the target price.

Key data

• 2025 revenueCNY1,874mnUp 18.3% YoY, slightly above expectations.
• 2025 net profitCNY225mnUp 12.4% YoY, slightly above expectations.
• 1Q26 revenueCNY530mnUp 34.5% YoY, above expectations.
• 1Q26 net profitCNY70mnUp 29.2% YoY, above expectations.
• 2025 gross margin39.0%Above 38.4% in 2024, benefiting from the launch of high-value-added products.
• 2026F revenue forecastCNY2,419mnRaised by 12.1% versus the previous forecast.
• 2027F revenue forecastCNY3,082mnRaised by 18.3% versus the previous forecast.
• 2028F revenue forecastCNY3,827mnNewly added in this update.
• 2026F net profit forecastCNY295mnRaised by 3.5% versus the previous forecast.
• 2027F net profit forecastCNY384mnRaised by 8.2% versus the previous forecast.
• 2028F net profit forecastCNY462mnNewly added in this update.
• Target priceCNY56.4Raised from CNY54.6, implying 34.8% upside.
• Current valuation44.7x 2026F P/EThe report discloses the 2026F P/E implied by the current share price.
• Humanoid robot motor deliveries超过120k台2025 frameless torque motor deliveries increased by more than 20x YoY.
• Planned capacity2mn台/年The company is building annual production capacity for frameless torque motors.

Impact & implications

If industrial automation demand continues to recover and customer onboarding and volume ramp-up for humanoid robot components proceed smoothly, Leadshine Technology could gain support in revenue growth, earnings expansion, and valuation premium. The higher target price reflects greater confidence in the company's growth trajectory, but gross margin sensitivity to raw material prices, the pace of macro recovery, and the speed of new business rollout remain key uncertainties.

Risks

• Macroeconomic recovery is weaker than expected.
• Domestic brand market penetration is slower than expected.
• Expansion of new businesses such as humanoid robots is slower than expected.
• Rising raw material prices may drag on gross margin.
• The target P/E valuation premium depends on the company delivering earnings growth.

What to watch

• The pace of industrial automation demand recovery.
• Revenue growth in the servo systems, stepper systems, and control technology businesses.
• Whether growth in small PLC products can continue.
• Progress in customer onboarding, delivery volume, and annual capacity buildout for humanoid robot core components.
• Volume ramp-up of frameless torque motors, planetary/harmonic joint modules, and dexterous hands.
• Whether gross margin is dragged down by rising raw material costs.
• Whether the 2026F EPS of CNY0.94 and net profit forecast of CNY295mn can be delivered.