EU Suspends Temporary Taxes on Domestic Lawnmowers, Benefiting Ninebot Most

Overview

This report analyzes the latest developments in the EU's anti-dumping investigation against Chinese robotic lawnmowers (RLM) and their impact on relevant Chinese listed companies. On June 19, 2026, the European Commission announced that due to technical complexities, it will continue the investigation but refrain from imposing provisional anti-dumping measures. Goldman Sachs believes this decision removes immediate concerns about tariff hikes in the short term, benefiting Chinese companies’ profit margins and market competitiveness in 2026. The report focuses on Three leading enterprises—Ninebot, Rockchip, and Ecovacs—and provides differentiated investment recommendations based on their fundamentals, competitive landscape, and dependence on the EU market.

Core views

Event Impact and Industry Outlook: By waiving temporary tariffs, the EU has given Chinese businesses valuable time. Previously, there were worries that provisional tariffs taking effect in June could disrupt first-half outbound shipments, but now that risk is temporarily mitigated. Although final rulings might be made in November 2026 or January 2027 with possible retroactive application, the current buffer allows firms to prepare more systematically, such as shifting manufacturing capacities overseas. However, early overseas plant setup typically increases production costs by 10%-20%, so extending this window helps optimize relocation efficiency. Ninebot Co., Ltd. (689009.SS): As the primary beneficiary of this event, Ninebot has a high proportion of revenue from robotic lawnmowers (9% of total revenue) and contributes significantly to profits. Its advantages include a robust product portfolio, established brand, offline channel presence, and global production flexibility to handle potential tariffs. Additionally, its growing market share in micro-mobility solutions (E2W), coupled with electrification trends in developed markets and ASEAN, offers long-term growth drivers. Goldman maintains its 'Buy' rating, setting a target price of 62 yuan. Rockchip Technology Co., Ltd. (688169.SS): Rockchip leads globally in the robotic vacuum cleaner market and accelerates market share gains through active marketing and brand investments. With factors previously dragging down profits (such as excessive spending on new products, U.S. tariffs, and transitioning Europe operations) gradually resolving, the company is rebounding quickly. Its product line is expanding beyond core robotic vacuums into washers and robotic lawnmowers. Goldman maintains its 'Buy' rating, with a target price of 170 yuan. Ecovacs Robotics Co. (603486.SS): Despite holding a leading position in China’s cleaning appliance market with a dual-brand strategy (ECOVACS + DEEBOT), Goldman remains cautious toward Ecovacs. Key reasons include intensified domestic competition, particularly in the floor washer segment, and challenges in defending market share without eroding margins. Compared to peers, its risk-reward profile lacks attractiveness, warranting a ‘Sell’ rating with a target price of 55 yuan.

Analysis framework

Goldman's analytical logic follows the path of 'macro policy event-driven -> industry supply-demand and cost transmission -> individual stock fundamental differentiation assessment'. Firstly, interpreting procedural nodes of the EU anti-dumping investigation (provisional measures versus final ruling) to evaluate direct impacts on short-term financial metrics (gross margin, revenue). Secondly, analyzing different firms' elasticity towards potential tariffs based on globalized supply chains (e.g., cost-efficiency of overseas capacity layout). Finally, returning to individual stock fundamentals, independently assessing each company's long-term growth potential and valuation through volume-price breakdown, channel expansion progress, penetration rates of new categories, and changes in competitive dynamics.

Methodology notes

• Industry/Industrial Analysis FrameworkUpstream-Midstream-Downstream Transmission in Industrial Chains

  Impact of Trade Barriers on Profit Distribution Across Industrial Chains

  Analyzing how tariffs or anti-dumping duties propagate from end consumers upstream through midstream manufacturers, and how companies absorb cost pressures via strategies like capacity relocation or price adjustments.

• Valuation methodsDCF Cash Flow Discounting

  Discounted Valuation Based on Exit P/E Ratio

  The research report uses expected EPS in 2028 multiplied by an exit P/E multiple, discounted back to 2027 using a 9.5% equity cost to derive current target prices. This hybrid valuation method combines terminal value thinking with cash flow discounting principles.

• Competition and Strategy FrameworkMoat/Competitive Advantages

  Brand Power and Global Supply Chain Flexibility as Competitive Barriers

  Emphasizing that leading firms can leverage brand premium and flexible global capacity allocation to outperform smaller players during trade friction episodes, enhancing both survival and profitability prospects.

Asset mapping & comparison

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

• Ninebot Co., Ltd. (689009.SS)

  Beneficiary: High exposure to robotic lawnmower business and capable of adjusting global production capacity; valuation constraints eased.

  Strengths

  Diverse product mix, well-established brand, strong offline channels, global production adaptability.

  Comparison

  Better equipped than small players to handle tariff shocks and surpasses ECOVACS in overseas growth potential.

  Risks

  Macroeconomic downturn leading to reduced consumer confidence, slower new product launches, increased competition, rising raw material costs.

• Rockchip Technology Co., Ltd. (688169.SS)

  Beneficiary: Strong profit recovery, steady acquisition of overseas market share, smooth transition into new product lines.

  Strengths

  World-leading position in robotic vacuums, rapid channel expansion, effective marketing efforts, improving profit margins.

  Comparison

  Higher earnings certainty than ECOVACS and stronger growth momentum than industry average.

  Risks

  Intensified domestic and international competition, underperformance in new product launches, marketing expenses eating into profits, ongoing U.S. tariff risks.

• Ecovacs Robotics Co. (603486.SS)

  Relatively Disadvantaged/Cautious: Intense domestic competition, difficulty in defending overseas market share, suboptimal risk-return profile.

  Strengths

  Leading domestic market share, dual-brand strategy, comprehensive omnichannel network.

  Weaknesses

  Fierce competition in the domestic floor washing machine segment, margin compression, high defensive costs overseas.

  Comparison

  Worse risk-return ratio compared to Ninebot and Rockchip, facing graver domestic oversupply issues.

  Risks

  Slower demand recovery than expected, lagging product development, worsening competition.

Key data

• Ninebot Share of Robotic Lawnmower Revenue9%Data from 2025 indicating reliance on this business and exposure to potential tariff impacts
• Initial Cost Increase from Overseas Plant Setup10%-20%Cost rise initially due to lower labor productivity and immature local supply chains
• Ninebot Target Price62 CNYBased on 16x expected 2028 exit P/E, discounted at 9.5% equity cost
• Rockchip Target Price170 CNYBased on 18x expected 2028 exit P/E, discounted at 9.5% equity cost
• Ecovacs Target Price55 CNYBased on 17x expected 2028 exit P/E, discounted at 9.5% equity cost

Impact & implications

In the short term, the EU postponement of tariffs is a positive signal, stabilizing investor sentiment, especially for companies heavily reliant on this sector like Ninebot. In the medium term, firms still need to prepare for potential final tariffs, accelerating China's robotics industry's global capacity deployment. In the long term, leading companies with brand advantages and integrated global supply chains will further consolidate market shares, while SMEs lacking these advantages face greater survival pressures.

Risks

• Economic weakness lowering disposable income and consumer confidence
• Delayed product releases or slower-than-expected entry into new categories
• Increased domestic and international competition
• Final implementation of anti-dumping tariffs with potential retroactive effect reducing profitability
• Higher-than-expected raw material costs
• Initial inefficiencies in overseas production shifts increasing costs

What to watch

• Final ruling timeline and specific tariff rates from the EU anti-dumping investigation
• Progress and cost control in Chinese companies' overseas capacity building
• Market share changes for new categories (floor washers, robotic lawnmowers) among these firms
• Impact of raw material price fluctuations on gross margins