Bernstein: NAURA Technology Group: Component shortages delay third-quarter revenue; can order growth translate into deliveries?

Why did third-quarter revenue miss expectations again?

NAURA Technology Group reported third-quarter 2026 revenue of 11.306 billion yuan, up just 1.3% year over year and 14.9% quarter over quarter, but still about 17% below market consensus. Second-quarter revenue had also missed consensus by 15%, and investors had expected deferred revenue to support a stronger third-quarter recovery.
Management attributed the shortfall mainly to tight global component supply and the ongoing production ramp-up of domestic alternatives, which further delayed shipments and revenue recognition. Management expects the supply of local components to improve more rapidly before year-end and resolve the shortage.

Third-quarter gross margin was 38.3%, down 1 percentage point from the second quarter and 2.09 percentage points below market consensus. Bernstein attributed the weakness to a higher proportion of memory customers.
Nevertheless, operating margin and net margin attributable to shareholders reached 20.0% and 17.9%, respectively, both above market expectations. Bernstein attributed this to operating expense controls, economies of scale, higher other income, and losses borne by minority shareholders.
Net profit attributable to shareholders was 2.022 billion yuan, up 5.2% year over year, about 3% below Bernstein's forecast but approximately 6% above market consensus.

Management told Bernstein that third-quarter orders grew about 90% year over year, while orders in the first nine months of 2026 rose about 60% year over year, well above the full-year order growth guidance of approximately 30% given at the start of the year. On that basis, Bernstein believes demand has not slowed.
Bernstein expects earnings growth to accelerate again from 2027 to 2028 as component supply improves and delayed deliveries are converted into revenue. This view depends on domestic component production ramping up as expected. Bernstein believes shortages will not materially affect shipments in 2027.
After updating its model, Bernstein cut its 2026 revenue forecast from 50.55 billion yuan to 47.114 billion yuan, a reduction of about 7%, and lowered its forecast for net profit attributable to shareholders from 7.326 billion yuan to 6.499 billion yuan, a reduction of about 11%. In addition to component shortages and changes in product mix, its operating profit forecast incorporates a potential equity incentive plan.

Bernstein forecasts 2027 revenue of 80.306 billion yuan, up 70% year over year, and net profit attributable to shareholders of 14.55 billion yuan, up 124% year over year. These forecasts are 21% and 31% above market consensus, respectively.
The same model shows inventory rising from an estimated 34.225 billion yuan at the end of 2026 to 60.096 billion yuan at the end of 2027, with changes in working capital corresponding to a cash outflow of 15.822 billion yuan in 2027. Operating cash flow for that year is forecast at 1.111 billion yuan, and net capital expenditure at 8.031 billion yuan.
Bernstein maintained its Outperform rating and 1380 yuan target price, based on a price-to-earnings multiple of 32 times its 2028 earnings-per-share forecast of 43.90 yuan.