Analysts at GTHT Securities have issued a research report reiterating a "Buy" rating on Johnson Electric Holdings (00179). The target price is set at HK$50.84, based on a 24x P/E ratio for fiscal year 2027. This assessment follows an upward revision to the company's profit forecasts for fiscal years 2026/27 through 2028/29.

The upgrade is driven by expectations that several of the company's new industrial and commercial products will begin contributing to revenue after fiscal 2027. These new products are typically associated with favorable profit margins. The revised forecasts project EPS of $0.27, $0.33, and $0.41 for fiscal years 2027, 2028, and 2029, respectively.

**Johnson Electric Holdings (00179)**

For the 2025-2026 fiscal year, Johnson Electric reported total operating revenue of $3.65 billion, remaining largely flat year-over-year. Net profit attributable to shareholders was $200 million, representing a 23% decline. The gross profit margin was 23.0%, down 0.1 percentage points, while the net profit margin was 5.5%, a decrease of 1.8 percentage points.

The company possesses powder metallurgy technological capabilities, with applications in various sectors including solid oxide fuel cells (SOFC) and automotive. With growing demand for SOFC power generation in areas like AI data centers, the powder metallurgy business is poised for rapid expansion.

Sales in the industrial and commercial products segment reached $600 million for the fiscal year, a 2% increase. The strategic focus of this division has shifted towards Chinese manufacturers, encompassing areas such as humanoid robots, warehouse automation, medical equipment, semiconductor manufacturing equipment, and liquid cooling applications.

The automotive business is facing pressure, primarily due to declining market share from joint venture customers in the Asia-Pacific region, and a turnaround is expected to take time. Looking forward, the company plans to increase investment in India to support local production and establish an additional export base to serve global clients in both the automotive and industrial/commercial product segments.

Key risks include rising raw material prices, a downturn in the global passenger vehicle market, and potential delays in the mass production of new business ventures.