Inovance's July industrial automation orders still grew more than 30% yoy; Goldman Sachs reiterates Buy

Overview

This report focuses on the July industrial automation order trend of Shenzhen Inovance Technology Co., Ltd. (300124.SZ). The company disclosed that industrial automation orders grew by approximately more than 30% yoy in July, slightly slowing from approximately 40% yoy growth in 1H2026. Goldman Sachs believes the slowdown mainly came from weaker areas such as process industries, textiles, injection molding, and forming, while advanced manufacturing-related demand remained strong. The report reiterates a Buy rating on the company and maintains the Rmb92.9 12-month target price.

Core views

Goldman Sachs's core view is that Inovance's share-gain trend remains intact. Although orders in some traditional manufacturing and process industries weakened in July, there were no signs of slowing in advanced manufacturing areas such as lithium batteries, semiconductors, smartphones, and automotive equipment. The company is already a leading player in China's inverter and servo markets, while overseas expansion, share gains in small and large PLCs, extensions of digital solutions, and growth in new energy vehicle components provide additional growth opportunities.

Analysis framework

The report cross-validates company-disclosed yoy and sequential order commentary, historical financial data, and order trends among automation peers. Goldman Sachs also uses Haitian International's (1882.HK) July orders as a reference for downstream injection molding-related demand to assess divergences in the industrial automation cycle across subsectors.

Methodology notes

• Valuation methods2027E P/E

  Target price based on 35x 2027E P/E

  Goldman Sachs's Rmb92.9 12-month target price for Inovance is based on 35x 2027E P/E, reflecting its long-term growth, return potential, and valuation appeal.

• Factor AnalysisGS Factor Profile

  Comparison of growth, financial returns, valuation multiples, and composite percentiles

  The Goldman Sachs Factor Profile compares stocks with the broader market and industry peers across growth, financial returns, valuation multiples, and composite percentiles to provide investment context.

• M&A AssessmentM&A Rank

  Assessment of the probability of becoming an acquisition target on a scale of 1 to 3

  Goldman Sachs uses an M&A framework across its global coverage to assess the probability that a company becomes an acquisition target; this report discloses the framework description but does not indicate that M&A factors have a material impact on Inovance's target price.

Asset mapping & comparison

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

• 300124.SZ

  Subject of the research; Goldman Sachs reiterates its Buy rating and maintains the target price

  Strengths

  China's industrial automation leader, with leading inverter and servo market shares; strong advanced manufacturing demand; PLCs, overseas expansion, new energy vehicle components, and digital business provide growth opportunities.

  Weaknesses

  July order growth slowed from 1H; process industries, textiles, injection molding, and forming weakened.

  Comparison

  Haitian International's July orders indicate divergent injection molding-related demand, with domestic orders still growing but overseas orders declining, providing indirect validation of weaker injection molding and forming-related demand for Inovance.

  Risks

  Industrial automation market share gains below expectations, weaker margins, slower-than-expected ramp-up of new energy vehicle components, and slowing manufacturing capital expenditure and automation demand.

• 1882.HK

  Peer/downstream reference

  Strengths

  Domestic July orders grew by low double digits yoy.

  Weaknesses

  Overseas July orders declined by mid-single digits yoy, while total orders grew by only low- to mid-single digits yoy.

  Comparison

  Its order trend is used to map injection molding machinery and related automation demand, supporting the report's view that some of Inovance's traditional manufacturing areas weakened.

  Risks

  Weak overseas demand could weigh on the injection molding equipment chain.

Key data

• July industrial automation order growthApproximately more than 30% yoySlightly slower than approximately 40% yoy growth in 1H26.
• 1H26 industrial automation order growthApproximately 40% yoyServes as the comparison base for the slowdown in July order growth.
• Target priceRmb92.9Unchanged, based on 35x 2027E P/E.
• Current disclosed priceRmb64.06Price stated in the company-specific disclosure.
• Haitian International July ordersLow- to mid-single-digit yoy growthDomestic orders grew by low double digits yoy, while overseas orders declined by mid-single digits yoy.
• Inovance's China inverter/servo market share25%/33%As of 2025, the report states that both ranked first in China.

Impact & implications

The report is broadly positive on Inovance. In the short term, slower July order growth points to divergent demand pressure in traditional manufacturing and process industries; however, strong advanced manufacturing demand and sequential orders in line with seasonality lead Goldman Sachs to believe that the market share gain and medium- to long-term growth thesis remain valid. If order resilience continues, valuation should remain supported by long-term growth and return potential.

Risks

• Industrial automation market share gains may be slower than expected.
• Margin trends may be weaker than expected.
• The ramp-up of the new energy vehicle components business may be slower than expected.
• Capital expenditure or automation demand in general manufacturing may slow.
• Continued weakening in process industries, textiles, injection molding, and forming could weigh on order growth.

What to watch

• Yoy and sequential changes in industrial automation orders in August and thereafter.
• Whether advanced manufacturing orders in lithium batteries, semiconductors, smartphones, and automotive equipment can continue to grow rapidly.
• Whether process industries, textiles, injection molding, and forming recover from their July weakness.
• Progress in gaining share in small and large PLCs and advancing the digital business.
• The pace of the new energy vehicle components business ramp-up and margin performance.