BOC International has released a research report maintaining an "Outperform" rating on Sanhua Intelligent Controls (02050), while reducing the target price from HK$49 to HK$40. The target price for Sanhua Intelligent Controls (002050.SZ) has also been lowered from 55 yuan to 52 yuan. The firm anticipates that the company's net profit growth will slow to approximately 15% by 2026.

During the earnings briefing, Sanhua Intelligent Controls' management reaffirmed its strategy to achieve profit growth and improve gross margin. The company's performance in the fourth quarter of last year was weak, with revenue declining by 5.4% year-on-year, net profit increasing by 2.9%, and core net profit rising slightly by 0.6%. This compares to growth rates of 12.8%, 43.8%, and 48.8% in the third quarter, reflecting a slowdown in growth during the last quarter of the previous year. However, the gross margin expanded by 4.4 percentage points year-on-year to 30.6%, providing a positive surprise.