JPMorgan released a research report indicating that Zhejiang Sanhua Intelligent Controls Co.,Ltd.'s (02050) Q4 2025 results were largely in line with preliminary figures, with both gross margin and operating cash flow exceeding expectations. Management forecasts approximately 15% year-on-year net profit growth for 2026, reflecting a more cautious and pragmatic approach. The firm lowered its 2026-2027 profit forecasts by about 8% and introduced projections for 2028. The H-share target price was reduced from HK$45 to HK$42, while the A-share (002050.SZ) target was cut from 64 yuan to 60 yuan, maintaining an "Overweight" rating.

Management expects data center cooling-related business revenue to reach approximately 2 billion yuan in 2025, accounting for about 6% of total revenue, with a target of 50% to 100% year-on-year growth in 2026. Regarding robotics operations, the company is expanding from a single customer to a broader client base while independently developing core components such as actuators. Communication about the Tesla robotics project has become more cautious, reflecting the sensitivity of commercial relationships.

Overseas capacity expansion in Thailand, Mexico, Vietnam, and Poland is progressing according to schedule, supporting global supply chain resilience. JPMorgan believes Sanhua's prudent margin and cash flow management, stable core business, and strategic positioning in high-growth areas like robotics and data centers will support long-term profitability and value appreciation.