Supor’s exports return to growth in the third quarter, while costs and competition continue to constrain profit recovery

Which business is driving the revenue recovery?

Supor reported third-quarter 2026 revenue of 5.582 billion yuan, up 3% year on year, and net profit of 405 million yuan, down 5%. Revenue was 2% above Goldman Sachs’ forecast, while net profit was 6% below it, showing a combination of improving revenue and pressure on profitability.
The change came mainly from exports. Goldman Sachs estimates that year-on-year export revenue growth swung from a decline of 11% in the second quarter to an increase of 8% in the third. Domestic sales were broadly flat year on year, roughly in line with the second-quarter growth rate and the bank’s expectations. The return to revenue growth was driven mainly by overseas operations, while domestic demand has yet to accelerate noticeably.
Management expects positive full-year revenue growth and broadly stable exports in 2026. Thus, the return to export growth in the third quarter is consistent with stable full-year exports: the recovery in a single quarter is not yet enough to bring full-year growth to a higher level.

Third-quarter gross margin fell year on year under the impact of rising costs, but remained stable quarter on quarter; net margin also declined year on year. Expense controls offset the impact of foreign-exchange losses but did not reverse the profit decline, and costs remain the main constraint on earnings recovery.
Management said costs remain high and domestic competition is pushing up marketing expenses, while new product launches and cost reductions can only partly offset the pressure. The company is relying on product innovation and efficiency gains to maintain margins that are more resilient than those of the industry, but full-year profit still faces the combined pressures of costs, competition and exchange rates.
Goldman Sachs’ model also retains this constraint: it forecasts revenue growth of 0.8% and a decline in net profit attributable to shareholders of 5.9% in 2026, with gross margin falling from 24.9% in 2025 to 24.7%. It expects the margin to recover to 25.2% only in 2027, accompanied by growth of 11.6% in attributable net profit. Its view of earnings improvement is concentrated more on the following year.

The domestic strategy centers on expanding the product range: adding titanium-series products and entering new categories such as microwave ovens and small commercial kitchen appliances. Goldman Sachs expects the broader product mix to support revenue, provided that the new products generate effective demand and drive sales, rather than merely increasing the number of products.
Overseas growth relies on two paths: strengthening cooperation with SEB, including shared research and development, while expanding overseas business outside SEB. Goldman Sachs also cites the normalization of orders after tariff uncertainty as a basis for overseas improvement.
This thesis is sensitive to consumer demand and new-product performance. The main risks Goldman Sachs lists include consumer confidence being affected by a macroeconomic slowdown, failure to launch successful new products, and difficulties expanding in the premium market; these factors would directly constrain domestic growth and product upgrades.

Goldman Sachs is positive on domestic revenue and margins relative to the industry, the overseas recovery, and the support that cash dividends provide to shareholder returns. It also considers the current valuation below its historical average. Its investment view combines the prospect of a subsequent operating recovery with room for valuation recovery.
Management reiterated its three-year shareholder return plan and maintained a relatively high payout ratio. Goldman Sachs’ model forecasts a payout ratio of 80% in each year from 2026 to 2028, below the 100% recorded in 2025. High dividends remain a supporting factor, but the model does not continue to assume a full payout.
Goldman Sachs made adjustments of 1%–2% to its earnings-per-share forecasts for 2026–2028, and maintained its Buy rating and 12-month target price of 52 yuan. The valuation applies a price-to-earnings multiple of 20 times to expected 2028 earnings per share, then discounts it back to 2027 using a cost of equity of 9.5%. The target price is based on medium-term earnings.