Analysts at Huaxi Securities Co.,Ltd. have issued a research report initiating coverage on AUX ELECTRIC (02580) with an "Add" rating. The firm forecasts the company's revenue for 2026-2028 to reach RMB 30.6 billion, RMB 32.1 billion, and RMB 34.5 billion, respectively. Net profit attributable to shareholders is projected at RMB 2.2 billion, RMB 2.4 billion, and RMB 2.7 billion for the same period, with corresponding EPS of RMB 1.39, RMB 1.51, and RMB 1.68.
Based on the closing price of HKD 11.25 on June 4, 2026, and using a conversion rate of 1 HKD to 0.83 RMB, the estimated P/E ratios for 2026-2028 are approximately 7x, 6x, and 6x, respectively. This compares to an average 2026 P/E of 11x for comparable companies, leading to the initiation of coverage with an "Add" rating. The key points from the report are as follows.
Recent Developments and Market Recognition
According to information from an industry conference, the "AI Intelligence · Wind Leads the Future – 2026 China HVAC Industry Innovation Summit" concluded successfully in Beijing on May 18. AUX ELECTRIC was awarded the 2026 Market Position Certification for achieving the top sales position in China for AI smart air conditioners. Subsequently, on May 20, the company held a new product launch in Guilin, Guangxi, officially introducing its Air Butler i9 series, presenting a key response in the "AI breakthrough battle."
Leveraging Global R&D and Embracing AI Technology
Reports indicate that the Air Butler i9 is the first to pass the industry-authoritative T/CAS L4 intelligent certification. This certification, issued based on the latest national standards for smart appliances, represents the highest current industry level for intelligence, signifying an ability to truly "understand the environment, understand lifestyle, and understand user needs."
According to the company's 2025 annual report, it boasts a global professional R&D team exceeding 1,600 personnel, focusing on foundational disciplines and core areas such as thermodynamics, fluid mechanics, energy-saving technology, inverter technology, and human-computer interaction. The company holds two National CNAS laboratory certifications.
It utilizes self-developed AI energy-saving core algorithms and high-efficiency inverter drive technology, combined with core components like large-displacement compressors, to achieve precise temperature control within ±0.2°C. Its flagship energy-saving model can save up to 48% on electricity, potentially saving 1 kWh in 4 hours. Furthermore, the company has established AI technology partnerships with leading firms, enabling features like dialect recognition for smart voice-controlled air conditioners, personalized airflow, and proactive decision-making functions.
Expanding Global Footprint and Enhancing Local Operations
Per its 2025 annual report, the company develops targeted products for different consumer usage scenarios worldwide. For the extreme heat and dust conditions in the Middle East, it introduced an R32 inverter + refrigerant cooling technology solution to overcome challenges related to high-temperature performance decay and inverter drive reliability. In response to Europe's energy crisis and policies promoting gas-to-electric conversion and zero-carbon industry, it launched commercial high-capacity heat pumps for Europe, offering integrated air conditioning and hot water solutions.
Regarding smart features, its voice-controlled wall-mounted air conditioners support six languages: English, Arabic, Vietnamese, Thai, Malay, and Spanish. The company is continuously building its overseas after-sales service system, with networks covering seven countries and regions including Malaysia, Thailand, Vietnam, Dubai, Saudi Arabia, Spain, and Italy, cumulatively establishing over 1,000 service outlets.
Overseas service centers have achieved a 1-hour response time, a 4-hour on-site service commitment, and a 99% resolution rate within 48 hours.
Potential Risks to Consider
The report also highlights several risk factors, including potential changes in tariff policies, weaker-than-expected downstream demand, fluctuations in upstream raw material costs, increases in ocean freight rates and port congestion leading to delivery delays, risks of third-party data inaccuracies, and the possibility that publicly available information used in the research may be outdated or not promptly updated.
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