Goldman Sachs has released a research report maintaining its earnings per share forecast for Johnson Electric Holdings Ltd (00179) at $213 million for the 2027 fiscal year and $225 million for the 2028 fiscal year, corresponding to price-to-earnings ratios of 10.1 and 9.5 times, respectively.

Taking into account a cooling sentiment in the robotics sector, the firm has lowered its target price by 23.46% to HK$30.5.

However, due to anticipated volume growth from new business segments such as solid oxide fuel cells (SOFC), liquid cooling, and robotics, the 'outperform the industry' rating has been upheld.

Performance Overview

The report indicates that Johnson Electric's first-quarter results for the 2027 fiscal year, ending in June, exceeded expectations.

Revenue reached $936 million, marking a 2% year-over-year increase, which slightly surpassed the firm's projections.

This performance was primarily driven by an inflection point in the domestic automotive business and a positive foreign exchange impact of $14 million; excluding currency effects, revenue was essentially flat.

Automotive Segment Analysis

The report notes that the core automotive business performed steadily, with the Asia-Pacific region reaching an inflection point.

The company's automotive segment revenue for the first quarter was $780 million, accounting for 84% of total revenue, representing a 2% year-over-year growth.

Overall performance was robust, with the Asia-Pacific and Americas regions seeing increases of 4% and 2%, respectively, while Europe, the Middle East, and Africa experienced a 6% decline.

Within Asia, orders from Chinese domestic brands showed signs of recovery.

In the Americas, revenue saw a slight year-over-year increase, mainly attributed to higher sales of powder metal components and body interior parts.

Looking ahead, the firm believes the overall performance of the segment is likely to continue a trend of being flat to slightly positive.