Weak first-quarter delivery cadence, but orders and margin guidance support subsequent recovery

Overview

This report is Goldman Sachs' post-1Q26 earnings company research update on Lead Intelligent (300450.SZ). The company's first-quarter revenue, EBIT, and net profit all came in below Goldman Sachs' expectations, with the core reason being weak equipment delivery and revenue recognition cadence rather than deteriorating order demand. The report also highlights that first-quarter orders reached a record high for the same period, revenue recognition is expected to accelerate from 2Q26 onward, and margins have room to recover driven by scale effects and improving battery equipment gross margins.

Core views

Goldman Sachs' core judgment is that the short-term earnings miss was mainly a delivery cadence issue; subsequent revenue recognition will improve as orders from 2H25 begin to be delivered. Demand for energy storage capex, recovery in overseas NEV demand, growth in all-solid-state battery orders, and scaling of sodium battery equipment constitute medium- to long-term growth drivers. A-share valuation is considered relatively fair, so Neutral is maintained, while H-shares remain Buy due to their discount and more attractive relative returns.

Analysis framework

The report uses an analytical framework combining earnings breakdown, order trends, margin bridging, business mix, and valuation multiples. On earnings, it compares actual 1Q26 revenue, gross profit, EBIT, and net profit with YoY changes and Goldman Sachs forecasts; on operations, it focuses on orders, inventory, contract liabilities, and the delivery/recognition cadence; on valuation, it centers on 2027E P/E, using 30x for A-shares and applying a 20% discount to H-shares based on the A-share valuation.

Methodology notes

• Valuation method2027E P/E

  Target price is based on the 2027E price-to-earnings multiple

  Goldman Sachs uses 2027E P/E of 30x to estimate the target price for Lead Intelligent-A, and 24x for H-shares, representing a 20% discount to A-shares, arriving at 12-month A/H target prices of Rmb61.0/HK$55.6.

• Factor frameworkGS Factor Profile

  Growth, financial returns, valuation multiples, and composite factor percentiles

  Goldman Sachs' factor profile compares the company's growth, financial returns, valuation multiples, and composite percentiles against the market and industry peers, providing investment context for the stock's characteristics.

• M&A frameworkM&A Rank

  M&A likelihood rating

  Goldman Sachs rates covered companies from 1 to 3 based on the probability of being acquired; this company has an M&A Rank of 3, representing a low probability and typically not included in the target price.

Asset mapping & comparison

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

• 300450.SZ

  A-share target, Lead Intelligent-A

  Strengths

  Strong orders, growing demand for energy storage and solid-state battery equipment, margins expected to recover, around 25% global share in intelligent lithium battery equipment.

  Weaknesses

  1Q26 delivery cadence was slow, with revenue and profit below Goldman Sachs forecasts; A-share valuation is close to its historical average.

  Comparison

  Relative to Goldman Sachs' China industrial tech and machinery coverage, A-share valuation is considered relatively fair.

  Risks

  Slower NEV development, weaker-than-expected energy storage capacity expansion, and slower-than-expected expansion of new businesses.

• 0470.HK

  H-share target, Lead Intelligent-H

  Strengths

  Trades at a 20% valuation discount to A-shares, and Goldman Sachs believes H-share valuation is more attractive.

  Weaknesses

  The target price implies slight downside versus the current price disclosed in the report, and it is likewise affected by delivery cadence and industry cycles.

  Comparison

  H-share valuation uses 2027E P/E of 24x, below the 30x for A-shares.

  Risks

  Same as A-shares, including EV demand, energy storage expansion, and weaker-than-expected new business expansion.

Key data

• 1Q26 revenueRmb3,691mnUp 19% YoY, 18% below Goldman Sachs forecasts.
• 1Q26 EBITRmb415mnUp 47% YoY, 23% below Goldman Sachs forecasts.
• 1Q26 net profitRmb405mnUp 11% YoY, 15% below Goldman Sachs forecasts.
• 1Q26 gross margin/operating margin/net margin34%/11%/11%YoY -1pp/+2pp/-1pp; overall broadly in line with expectations.
• 1Q26 new ordersRmb9.6bnUp 60% YoY, the company's strongest first quarter on record.
• Intention orders at quarter-endRmb4bnProvides support for second-quarter order visibility.
• 1Q26 equipment order mixDomestic batteries 60%/Overseas batteries 20%/Consumer electronics 15%/Others below 10%Others include photovoltaics and hydrogen energy, among others.
• 2026 guidance for all-solid-state battery ordersRmb2-3bnAbout 2-3x YoY; management believes market share will continue to increase.
• Management NPM guidance16%-17%Expected to improve relatively quickly as operating leverage emerges.
• 2026E-2030E revenue/net profit CAGR forecast24%/29%Goldman Sachs expects profitability to gradually recover from the lows of 2024/2025.
• 2030E NPM forecast13.3%Improved from the 2024/2025 lows of 2.7%/10.8%.
• Market capitalizationRmb92.7bn/$13.6bnDisclosed in the report's key data.
• Enterprise valueRmb89.8bn/$13.2bnDisclosed in the report's key data.

Impact & implications

The report's investment implication is tilted toward 'short-term delivery disruption, followed by fundamental improvement.' Orders and contract liabilities support an upward trend in revenue recognition, while improving gross margin and better expense efficiency support net margin recovery; however, upside to the A-share target price is limited, so the rating remains neutral, while H-shares are still viewed as more attractive due to their valuation discount and relative return.

Risks

• A more severe slowdown in China and global NEV development.
• Progress of energy storage capacity expansion weaker than expected.
• All-solid-state battery technology matures more slowly than expected, delaying equipment upgrade demand.
• Expansion of new businesses such as photovoltaics and consumer electronics is slower than expected.
• Equipment delivery and revenue recognition cadence continue to fall short of expectations.
• Low-margin orders or FX factors create additional drag on margins.

What to watch

• Whether revenue recognition in 2Q26 and 3Q26 enters an acceleration cycle as guided by management.
• Whether growth in inventory and contract liabilities converts into actual revenue and cash flow.
• The share of ESS-related orders and customers' capex cadence.
• The magnitude of gross margin improvement in overseas battery equipment.
• Delivery ramp-up progress for sodium battery equipment in 2H26.
• Whether all-solid-state battery orders reach the 2026 guidance of Rmb2-3bn.
• Whether the A/H-share valuation discount converges.