Joyson Electronics’ robotics business ramps up, while automotive cost pressure prompts Citi to lower earnings forecasts
The company expects its North American robotics customer’s weekly production rate to rise to 2500–3000 units by December, but weak automotive demand and rising raw material prices are squeezing gross margins. Citi has lowered its 2026–2028 earnings forecasts and maintained its Buy rating.
Original source：Citi ResearchFirst published on Unhidea：Original source date：
Key takeaway
Robotics components are becoming a new growth area for Joyson Electronics, but shrinking automotive revenue and rising costs continue to weigh on profits, prompting Citi to cut its earnings forecasts and target prices.
How quickly is the North American robotics customer ramping up?
Management expects its major North American humanoid robotics customer’s weekly production rate to rise from 800 units in late October 2026 to 1000 units in early November, more than 2000 units by the end of November, and 2500–3000 units in December; the company’s full-year shipment guidance for this customer is 16 thousand–20 thousand units.
The current average selling price is close to 3000 US dollars per set, with structural components and head assemblies accounting for most of the products supplied. Management expects the average price to decline as scale increases and therefore hopes to add high-value electronic components in 2027 to maintain the value supplied per robot.
Components for dexterous hands and other next-generation electronic modules remain under active discussion. Products for this customer are currently manufactured at the Ningbo base and delivered by air, and the company is also evaluating capacity plans in Mexico and the United States.
What have domestic robotics customers contributed?
The company expects combined revenue from domestic robotics customers to exceed 100 million yuan in 2026, with AgiBot contributing the largest share; the Unitree Robotics project remains at an early implementation stage, with a small delivery volume in 2026.
Joyson supplies AgiBot with computing hardware for its brain controller and fisheye cameras, and supplies Unitree with computing hardware and battery packs. AgiBot’s controller uses a high-end system-on-chip, supporting a relatively high average selling price.
Why are automotive margins under pressure?
In the third quarter of 2026, automotive safety revenue was 8.885 billion yuan and its gross margin was 15.7%, down 1.5 percentage points year on year; automotive electronics revenue was 3.662 billion yuan and its gross margin was 19.1%, down 2.3 percentage points quarter on quarter.
Management attributed the pressure to declining revenue and higher prices for raw materials such as memory chips, other chips and printed circuit boards; bill-of-materials costs account for more than 70% of the cost of electronic components. Management expects the year-on-year decline in the global automotive market to narrow in the fourth quarter compared with the first three quarters, while automotive electronics continues to benefit from the trend toward smarter vehicles.
The improvement plan includes passing costs on to domestic automakers, increasing capacity utilization and raising the proportion of gas generators made in-house from 20%–30% previously to more than 50% by the end of 2026. Price adjustment mechanisms are already in place for overseas customers, and cost pass-through to domestic customers is scheduled for negotiation in the fourth quarter.
How has Citi adjusted its earnings forecasts and valuation?
Taking into account weak global auto sales during the year and rising costs, Citi cut its 2026–2028 revenue forecasts by 13% and its gross margin forecasts by 1.1–1.5 percentage points to 17.1%, 17.4% and 17.7%; it cut its net profit forecasts for the same period by 24%–29% to 1.427 billion, 1.706 billion and 2.015 billion yuan, respectively.
Citi remains positive on the long-term growth potential of supply-chain vertical integration, improved operating efficiency and the robotics business, and maintains Buy ratings on the A-shares and H-shares. It cut the respective target prices from 33.6 yuan and 22.2 Hong Kong dollars to 30.8 yuan and 20.7 Hong Kong dollars, shifting the valuation basis to forecast 2027 price-to-earnings ratios while maintaining multiples of 28 and 17, respectively.
