Shenwan Hongyuan Group Co.,Ltd. has released a research report stating that CHERVON (02285), as a global leader in outdoor power equipment, has built a brand moat through EGO and deeply bonded with the Lowe's channel.
The company is approaching an earnings inflection point driven by the convergence of channel restocking and replacement cycles, alongside accelerating lithium battery penetration, placing it in a phase of bottoming earnings reversal and value reassessment.
The brokerage maintained its earnings forecasts for the company for fiscal years 2026-2028 at USD 160 million / 150 million / 170 million, representing year-on-year changes of +66% / -7% / +13%, corresponding to PE ratios of 10x / 11x / 10x, and reiterated its "Buy" rating.
The main points from Shenwan Hongyuan Group Co.,Ltd. are as follows: ①Channel partners began proactive restocking at the end of 2025, and the trend is continuing; ②The previous real estate cycle triggered a surge in purchases, corresponding to a concentrated replacement window from 2025 to 2027; ③The trend of rising lithium battery OPE penetration is certain, with the company launching approximately 130 new products in 26H1, of which about 90% are lithium battery products.
The EGO brand moat is extremely deep, and the platform ecosystem flywheel has already formed: ①OBM revenue share further increased to 79.6% in 26H1, with the EGO brand ranking first in market share across multiple subcategories of North American lithium battery OPE (walk-behind mowers, snow throwers, riding mowers); ②The battery platform continues to expand — the larger the battery installed base and the broader the ecosystem, the deeper the moat, reflecting the strong momentum of platform expansion; ③Deep integration into the Lowe's supply chain and shelf system makes it difficult for competitors to replicate in the short term.
Beyond the North American base, regional expansion and customer group expansion constitute the company's medium-to-long-term second growth curve: ①Regional expansion: the acquisition of Benelux region channel SDL in 2025, and the launch of its first automated wireless robotic mower in Europe in 26H1, which received excellent response; ②Customer group expansion: development of the 2B professional channel, with the successful promotion of commercial riding mowers in the U.S. market in 26H1, marking an important milestone for the commercial channel.
Risk warnings: changes in U.S. tariff policy, exchange rate fluctuations, and U.S. market end demand falling short of expectations.
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