Morgan Stanley: Estun’s third-quarter shipments rise as revenue falls: Expense pressure partly offsets gross margin improvement

Why did revenue fall while profit grew?

In the third quarter of 2026, Estun’s revenue was 1.1 billion yuan, down 11% year over year and below Morgan Stanley’s and market consensus estimates; net profit was 19 million yuan, up 22% year over year.
Morgan Stanley said the company shifted its focus to earnings quality and forwent some low-margin orders, improving its gross margin. However, weaker revenue raised the expense ratio, offsetting some of the gains from the gross margin improvement.
The company completed its acquisition of Codroid for 487 million yuan in September 2026, raising its ownership stake to 100%, and consequently restated its financial statements.

According to MIR data, Estun shipped approximately 9800 industrial robots in China in the third quarter, up 19% year over year, faster than the industry’s 14% growth; its market share was 10.7%, up 0.4 percentage points year over year.
Growth came from smaller models: shipments of six-axis robots above 20 kilograms fell 14% year over year, while shipments of smaller six-axis robots grew 8%. Morgan Stanley believes the shift in product mix offset the boost to revenue from shipment growth.

Recurring net profit for the first three quarters of 2026 was 116 million yuan, and the company maintained its full-year target of 200 million yuan. Based on the difference, the fourth quarter needs to contribute approximately 84 million yuan.
During the industry fair in October, management said it expected fourth-quarter orders to grow by more than 20% year over year. Morgan Stanley maintained its Equal-weight rating on the company, with a price target of 29.60 yuan per share.