Bank of America: Tuopu’s third-quarter revenue grows in 2026, while costs and foreign exchange losses weigh on profit

Why did profit fall despite third-quarter revenue growth?

Tuopu’s third-quarter 2026 revenue was 8.416 billion yuan, up 5.3% year on year and 11.2% quarter on quarter; Chery, BYD, Tesla Shanghai and Rivian were the main growth drivers.
Net profit attributable to shareholders for the same period was 640 million yuan, down 4.8% year on year but up 35.8% from the second quarter. Excluding one-off items, primarily government grants, net profit was 603 million yuan, down 8% year on year and up 39% quarter on quarter.
Higher depreciation from new capacity and rising raw material prices dragged the gross margin down to 18.1%, a decline of 0.5 percentage points year on year and 0.3 percentage points quarter on quarter. Third-quarter foreign exchange losses were 62 million yuan, compared with 13 million yuan a year earlier.

As revenue grew quarter on quarter, the third-quarter operating expense ratio fell to 8.8%, down 1.3 percentage points from the second quarter; the operating margin rose from 8.4% to 9.3%, offsetting part of the decline in gross margin.
Despite the quarter-on-quarter recovery, third-quarter operating profit still fell 0.4% year on year, and net profit attributable to shareholders was also below the year-earlier level, showing that revenue growth had yet to fully offset cost and foreign exchange pressures.

Taking into account third-quarter results, the latest outlook and rising raw material costs, BofA lowered its earnings-per-share forecasts for 2026–2028 by 4%, 4% and 3%, respectively, and cut its price target from 60 yuan to 58 yuan, while maintaining its buy rating.
BofA expects net profit attributable to shareholders of 2.41 billion yuan in 2026, down 13.3% year on year, before recovering to 2.945 billion yuan in 2027. The bank cut its earnings forecasts by more than its revenue forecasts, reflecting the impact of cost pressure on margins.

BofA is positive on Tuopu’s expansion of its electric vehicle customer base and product lines, and believes humanoid robots could provide a second growth engine. Its 58 yuan price target uses a sum-of-the-parts valuation: automotive and electric vehicle components account for approximately 52.8% of the valuation, and robotics components approximately 47.2%.
The robotics component is based on assumptions of global shipments of 1.2 million units in 2030, actuator value of 60.9 thousand yuan per unit, a 20% share for Tuopu and a 10% net margin. On that basis, the business is estimated to generate approximately 1.462 billion yuan in net profit in 2030.
BofA values the robotics business at 50 times forecast 2030 earnings and discounts it at 11.4%; it values the automotive business at 18 times forecast 2027 earnings. The robotics valuation is therefore highly dependent on assumptions including shipment volumes, market share and margins.