JP Morgan lowers NEXTEER's target price to 6 yuan; steer-by-wire and electronic mechanical braking products are expected to enter commercialization this year

JP Morgan's research report pointed out that NEXTEER (01316.HK) saw its stock price decline yesterday (25th) after the announcement of its fiscal year 2025 results. Although revenue and EBITDA margin were generally in line with market expectations, net profit fell short of expectations. The company increased its dividend payout ratio from 35% in 2024 to 45%. Management held a constructive view on the outlook for 2026 during the earnings conference, expecting revenue growth to exceed the market by 200 to 300 basis points, with continued margin expansion.

The bank noted that NEXTEER's steer-by-wire (SbW) products have received orders from two leading Chinese new energy vehicle companies, with production lines in China expected to commence in the first half of 2026. Additionally, the company will invest in its first electronic mechanical brake (EMB) production line in 2026, with the first order expected in the second half of the year, valued at 2 to 3 times the premium of traditional braking systems. Although management expects limited short-term financial contributions from steer-by-wire and electronic mechanical brakes, a significant profitability inflection point is anticipated by 2030 as applications accelerate.

JP Morgan has lowered NEXTEER's target price from HKD 6.5 to HKD 6, maintaining a "Neutral" rating