Sanhua Intelligent Controls 2Q26 First Take: Overall, quarterly results were muted, with both revenue and net profit missing expectations.
Specifically:1) Total revenue was RMB 9.13bn, up 6% YoY, below the market’s ~8% expectation.
The key drag was a slowdown in auto parts growth.Auto parts revenue rose 5.4% YoY to RMB 3.34bn, decelerating from 15% YoY in Q1 and below the market’s ~15%.
From an industry view, NEVs exited the Q1 seasonal trough in Q2.NEV passenger-car growth improved from -5% YoY in Q1 to +14% in Q2, with exports remaining strong.
Against this backdrop, auto-parts growth was clearly softer than expected.Refrigeration revenue grew 6.5% YoY to RMB 5.78bn, reversing Q1’s -6% decline, supported by a recovery in North America and domestic subsidies such as trade-in programs.
Rising energy-efficiency requirements in China should drive product refresh, while Europe, India, and Japan still offer growth opportunities.Summer heatwaves, rising AC penetration, and expansion into adjacent products will provide additional momentum.
Several new products will roll out this year, adding incremental revenue.2) GPM was 28.3%, below the market’s 29.2%.
By segment:Auto parts GPM was 27.4%, down 30bps QoQ, likely still pressured by higher upstream aluminum prices.
Given limited aluminum price pass-through in the sector (fixed pricing is common), the company relies on hedging to offset cost pressure.However, hedging involves a timing gap.
When aluminum prices rise rapidly, costs cannot be fully offset within the quarter, creating short-term GPM pressure.Refrigeration component GPM was 28.7%, up 70bps QoQ.
This was likely driven by a rebound in the overseas export mix.3) Net profit was RMB 1.12bn, down 7% YoY and below the market’s RMB 1.26bn, due to softer revenue and margins, higher opex QoQ, and larger credit and FX losses.
Core OP was RMB 1.43bn, up 4% YoY, indicating decent control. $Sanhua(002050.SZ) $SANHUA(02050.HK)
