Shuanghuan Driveline’s new-energy vehicle gear business accelerates in the third quarter as its robotics business enters an expansion phase
Third-quarter revenue rose 14% year on year, while net profit grew 4% and came in slightly below market consensus. Morgan Stanley is positive on the ramp-up of overseas operations and coaxial gearboxes, and sees humanoid robots as an additional growth opportunity.
Original source：Morgan StanleyFirst published on Unhidea：Original source date：
Key takeaway
New-energy vehicle gears and overseas capacity are supporting Shuanghuan Driveline’s growth, but conventional vehicle gears are declining, margins at the overseas factory remain low, and the growth potential of the robotics business continues to depend on downstream shipments.
How did third-quarter results change?
Revenue in the third quarter of 2026 rose 14% year on year and 4% quarter on quarter, in line with Morgan Stanley’s expectations and market consensus. New-energy vehicle gears, construction machinery gears, intelligent actuators and reducers provided growth momentum.
The gross margin recovered quarter on quarter and was broadly stable year on year. Net profit rose 4% year on year and 10% quarter on quarter, in line with Morgan Stanley’s expectations but slightly below market consensus.
Foreign exchange losses narrowed to 7 million–8 million yuan during the quarter, from approximately 20 million yuan in the second quarter.
Why is the new-energy business a growth focus?
Third-quarter revenue from new-energy vehicle gears rose 26% year on year and 18% quarter on quarter, while revenue from internal combustion vehicle gears fell 14% year on year and was flat quarter on quarter. Revenue from commercial vehicle gears fell 7% year on year.
The Hungary factory continued to ramp up, generating revenue of 300 million–400 million yuan in the first three quarters of 2026, with a net margin of 2%. The company has supplied differential modules to Tesla’s European operations at an average selling price of approximately 400 yuan, and is also pursuing opportunities in North America.
Monthly coaxial gearbox capacity reached 80 thousand units, with utilization above 90%. The company aims to raise monthly capacity to 100 thousand units by year-end. Morgan Stanley is positive on the ramp-up of overseas operations and coaxial gearboxes.
How much additional revenue could the robotics business generate?
Revenue from reducers for embodied robots exceeded 100 million yuan in the first three quarters of 2026. Management expects shipments to accelerate in the fourth quarter and has set a full-year revenue target of 150 million–200 million yuan, and a target of 400 million–500 million yuan for 2027. Fourth-quarter demand is linked to downstream companies’ push to meet their year-end targets.
The company is expanding from RV, cycloidal, harmonic and planetary reducers into reducer components and actuator modules, extending its supply scope from complete units to components and modules.
In another robotics-related business, revenue from industrial robot reducers rose more than 20% year on year in the third quarter. The company reiterated its guidance for full-year revenue exceeding 500 million yuan.
How does Morgan Stanley view future growth?
Morgan Stanley maintained its Overweight rating and price target of 46 yuan. The bank sees humanoid robots as an additional growth opportunity, while overseas operations and coaxial gearboxes are existing growth areas it favors.
Its sum-of-the-parts valuation applies a 25 times price-to-earnings multiple to expected 2026 earnings for the core business. For the humanoid robot business, it applies a 6 times price-to-sales multiple, assuming global humanoid robot sales reach 1 million units and the company’s related sales reach 1.1 billion yuan.
The bank noted that weaker-than-expected overseas demand, slower market share gains and intensifying domestic competition in gears and actuators could affect its assessment.
