Where did third-quarter results fall short?

  • In the third quarter of 2026, Ninebot reported revenue of 7.585 billion yuan, up 14% year on year and 3% below Goldman Sachs’ forecast. Net profit was 343 million yuan, down 37% year on year and 36% below the bank’s forecast. Revenue was broadly in line with expectations, while the profit shortfall was much larger.
  • Goldman Sachs said the overall gross margin and net margin fell by 5.5 and 3.7 percentage points year on year, respectively, affected by higher costs, increased R&D spending and foreign exchange losses. Core operating profit, calculated as gross profit minus operating expenses, fell 45% year on year.

Which products supported revenue growth?

  • Electric two-wheelers in China entered their peak season, with third-quarter revenue rising 14% year on year, above the 3% growth recorded in the second quarter. Shipments totaled 1.8 million units during the quarter, up 22% year on year, while the average selling price fell 6% year on year; the price had fallen 12% year on year in the second quarter.
  • Goldman Sachs estimates that robotic lawn mower revenue rose approximately 100% year on year in the third quarter, following growth of more than 100% in the second quarter. Robotic lawn mowers and electric scooters entered their off-season in Europe, and overall revenue growth slowed from the second quarter.
  • Third-quarter revenue from consumer electric scooters and all-terrain vehicles rose 4% and 19% year on year, respectively, below the 27% and 32% recorded in the second quarter. Goldman Sachs believes this may be related to weaker seasonal demand.

Why did the overall margin decline quarter on quarter despite improved margins for individual products?

  • Seasonal changes across businesses shifted the revenue mix toward lower-margin electric two-wheelers, weighing on the overall third-quarter margin compared with the second quarter. Management also said gross margins for core categories, including electric two-wheelers and robotic lawn mowers, improved quarter on quarter.
  • Third-quarter R&D expenses rose 37% year on year, and R&D expenses as a share of revenue increased by 1 percentage point. The company continues to invest in R&D to expand its product pipeline and respond to competition, particularly in the robotic lawn mower market.
  • Foreign exchange losses remained at 86 million yuan, but narrowed from approximately 120 million yuan in the second quarter. Selling expenses and other administrative expenses were broadly stable year on year.

Why does Goldman Sachs remain positive on the company, and how has the buyback plan changed?

  • Goldman Sachs has a buy rating on Ninebot and a 12-month price target of 58 yuan. The bank is positive on gains in domestic electric two-wheeler market share, robotic lawn mowers replacing traditional products, and growth opportunities for electric bicycles overseas and electric two-wheelers in emerging markets. Intensifying competition and rising raw material costs could affect profitability.
  • Management has proposed raising the buyback range from 150 million–300 million yuan to 300 million–700 million yuan. The repurchased shares are to be cancelled to increase earnings per share. The proposal has been approved by the board and still requires shareholder approval at a general meeting.
  • As of 30 September, the company had repurchased 220 million yuan worth of shares under the original plan, representing 0.78% of its total share capital.