TGOOD’s third-quarter profit growth slows as data-center and overseas orders take the baton

Why did revenue grow in the third quarter while profit grew more slowly?

In the third quarter of 2026, TGOOD reported revenue of 4.234 billion yuan, up 18.3% year on year, and net profit of 382 million yuan, up 6.6%. A high-margin Saudi project was recognized in the same period of 2025, raising the profit comparison base.
Citi estimates that, excluding 300 million yuan in revenue from the Saudi project in the year-earlier period, third-quarter revenue growth was close to 30% year on year. However, because there was no revenue from that project in the quarter, gross margin fell 1.5 percentage points year on year to 26.3%; net margin fell 1 percentage point to 9.0%, with a lower ratio of selling and administrative expenses to revenue partially offsetting the pressure.
Net profit for the first three quarters was 810 million yuan, up 18.1% year on year and representing 53% of the Bloomberg-compiled consensus forecast for full-year 2026 profit. By comparison, profit in the first three quarters of 2021–2025 averaged 47% of full-year profit. On this basis, Citi believes profit is tracking ahead of consensus expectations.

New electrical equipment orders in the first three quarters rose 16% year on year to 15 billion yuan. Within that total, new data-center orders exceeded 1.5 billion yuan, up 300% year on year; orders from Chinese grid companies rose 40% to 2 billion yuan.
Management believes that an integrated architecture combining outdoor prefabricated high-voltage substations with indoor power distribution modules could become the mainstream power-supply solution for new data centers over the next two to three years, replacing conventional civil construction. The company plans pilot deployments of its next-generation AI PowerHouse platform through one to two demonstration projects in 2027.
Management estimates that China’s data-center power infrastructure market could exceed 100 billion yuan over the next three to five years, and the company aims to achieve sales of more than 10 billion yuan. It also won bids for data-center projects in Thailand and Malaysia in the first three quarters.

New overseas orders in the first three quarters rose 30% year on year to 1.3 billion yuan, mainly from Europe and other countries in the Middle East. The company aims for overseas revenue to account for 30% of electrical equipment sales revenue within two to three years.
Management expects significant progress before year-end in the ongoing Saudi tender for prefabricated substations. Citi sees it as a near-term catalyst for the fourth quarter of 2026: assuming TGOOD wins a 50% share, potential orders would be approximately 2 billion yuan.

The company’s order delivery cycle is typically less than 12 months. On that basis, Citi expects the 16% growth in electrical equipment orders in the first three quarters to drive faster revenue growth in 2027, above the 10.5% revenue growth recorded in the first three quarters of 2026.
Citi maintains its buy rating and a price target of 49.60 yuan. In its sum-of-the-parts valuation, it applies a 2027 forward price-to-earnings multiple of 15 times to the charging business and 30 times to the electrical equipment business. The report also notes that slower-than-expected additions of charging facilities, lower-than-expected utilization due to competition, and weak demand for new-energy electrical equipment would all affect the valuation assessment.