Citi has issued a research report reiterating its "Buy" rating on JLMAG (HKG: 06680), maintaining a Hong Kong stock target price of HK$38.2. This follows the company's positive performance guidance for the first half of 2026.
JLMAG anticipates net profit for the first half of 2026 to reach between RMB 400 million and RMB 460 million, representing year-on-year growth of 31% to 51%. The performance is even more robust when excluding non-recurring gains and losses, with net profit expected to be between RMB 368 million and RMB 428 million, marking a year-on-year surge of 57% to 83%. This strong growth is primarily driven by an approximate 30% year-on-year increase in revenue and ongoing optimization of the product mix.
The bank noted that the interim results demonstrate solid operational momentum, particularly considering the company recognized approximately RMB 121 million in new expenses related to its A/H-share incentive plan and the issuance of H-share convertible bonds. From a business segment perspective, revenue from new energy vehicles and automotive components grew by about 30% year-on-year. Meanwhile, revenue from robotics and industrial servo motors surged by approximately 90% year-on-year. Notably, the motor rotor products for embodied intelligent robots have entered the small-batch delivery stage, validating that the robotics business is transitioning from market discussion to tangible order contributions.
Citi maintains its investment thesis on JLMAG and expects order volumes to recover in the second half of the year as the peak season arrives. Furthermore, the launch of Tesla's Optimus V3 is anticipated to heighten market focus on the company's robotics business segment.
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