Luxshare Precision Industry Co.,Ltd. (002475.SZ) released its first-half report on August 24, showing revenue of 174.504 billion yuan, up 40.16% year-on-year, while net profit attributable to shareholders reached 7.843 billion yuan, up 18.04%. The profit figure just touched the lower end of the company's guidance range of 7.84-8.106 billion yuan, with revenue growth more than double that of profit growth.
Deducting non-recurring items, the picture weakens further. Adjusted net profit came in at just 5.962 billion yuan, up a mere 6.47% year-on-year, far below the 40% revenue expansion. The key variable is currency: the company recorded approximately 1.986 billion yuan in exchange losses from its foreign currency asset and liability exposure, while 1.297 billion yuan in gains from foreign exchange risk management was booked as non-recurring income. Under accounting standards, hedging gains tied to currency risk are excluded from adjusted net profit, meaning the adjusted figure fails to reflect the full effect of the company's hedging program.
Financial expenses surged 1497.51% year-on-year, underscoring the violent impact of exchange rate swings. Operating cash flow for the first half came in at negative 2.446 billion yuan, down 47.54% year-on-year, mainly due to payments to suppliers for maturing obligations. In the first quarter alone, operating cash flow was already negative 7.068 billion yuan, and while the half-year figure narrowed somewhat, the contrast between 7.8 billion yuan in profit and negative cash flow remains striking.
The company continues to invest heavily in new businesses such as AI servers and automotive electronics, while the consolidation of Leoni and Wencan assets adds integration costs. This scale expansion is coming at the expense of cash flow. By segment, automotive electronics revenue reached 32.391 billion yuan, up 274.10% year-on-year, while communications and data center revenue hit 16.609 billion yuan, up 49.66%. Together, these two high-growth segments account for about 28% of total revenue, but consumer electronics remains the absolute core at 122.476 billion yuan, representing 70% of the top line.
From an institutional perspective, Goldman Sachs raised its price target from 50.15 yuan to 106 yuan in June, citing strong expansion expectations in data centers and automotive electronics. China Merchants Securities maintains a 90 yuan target with a "Strong Buy" rating. Some institutions forecast full-year net profit of approximately 21.5 billion yuan for 2026, meaning the first-half result of 7.8 billion yuan only achieves 36% of the annual estimate. To meet that target, the company would need to generate nearly 13.7 billion yuan in net profit in the second half, a substantial challenge.
On the same day, Luxshare Precision Industry Co.,Ltd. also issued guidance for the first three quarters of 2026, projecting net profit attributable to shareholders of 13.246 billion to 14.398 billion yuan, up 15% to 25% year-on-year.
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