Key takeawayKiwi Instruments’ growth comes from expanding its higher-value power management products, while Huaxin Building Materials relies on its overseas cement business to offset domestic pressure. Their subsequent growth depends respectively on the scaling up of new products and the progress of overseas expansion.
Why were Kiwi Instruments’ earnings forecasts raised sharply?
- In the third quarter of 2026, Kiwi Instruments’ revenue rose 22.88% quarter on quarter, and attributable net profit was 50.894 million yuan, up 745.19% year on year. Gross margin was 35.13%, up 5.06 percentage points year on year and 2.41 percentage points quarter on quarter. Revenue growth and margin improvement together supported earnings.
- Huachuang Securities raised its forecasts for the company’s attributable net profit in 2026–2028 from 64 million, 122 million and 188 million yuan to 132 million, 203 million and 288 million yuan, respectively, increases of 106%, 66% and 53%.
How are new products driving Kiwi Instruments’ growth?
- The company’s revenue mix is shifting from consumer products toward industrial and computing applications. In the first half of 2026, combined revenue from products including motor drives, high-power power supplies, battery management and DC-DC rose by more than 137% year on year, contributing the vast majority of incremental revenue.
- Within that total, revenue from high-power chips for servers and data centers, new energy and industrial power supplies rose 126.80% year on year. The institution believes rising power demands from AI servers have increased performance and value requirements for power management chips; whether the company can continue to benefit also depends on the progress of new product development and scaling.
Where does Huaxin Building Materials’ growth come from?
- In the first three quarters of 2026, Huaxin Building Materials reported revenue of 29.69 billion yuan, up 18.60% year on year, and attributable net profit of 2.826 billion yuan, up 41.05%. Third-quarter attributable net profit was 1.113 billion yuan, continuing to grow from the second quarter.
- Higher overseas cement volumes and prices offset operating pressure in the domestic cement business. The company’s overall gross margin for the first three quarters was 31.77%, up 2.27 percentage points year on year, mainly benefiting from a higher revenue share for the high-margin overseas business and improved profitability in that business. Net operating cash flow was 4.912 billion yuan, with net inflow increasing by 1.675 billion yuan year on year.
How far has overseas expansion progressed?
- As of the end of June 2026, Huaxin Building Materials’ cumulative overseas cement capacity in operation and under construction was 41.2 million tonnes. An exclusivity agreement has been signed for the acquisition of Brazilian cement assets, granting exclusive negotiating rights for a specified period; the proposal to acquire Philippine cement assets has been approved by shareholders.
- SDIC Securities raised its earnings forecasts based on progress in overseas expansion. It expects attributable net profit of 4.004 billion, 5.295 billion and 6.61 billion yuan for 2026–2028, respectively, citing continued growth in overseas business volumes and a recovery from the bottom in domestic cement operations. Overseas expansion falling short of expectations is the principal risk.
