Key takeawayGoldman Sachs believes Anker’s core businesses remain resilient, but a renewed acceleration in revenue depends on closing the gap in products such as cleaning appliances and contributions from new products. It therefore cut its earnings forecasts and maintained its Buy rating.
Where did third-quarter results differ from expectations?
- Anker’s third-quarter revenue in 2026 fell short of Goldman Sachs’ forecast, but the gap versus market expectations was smaller; operating profit exceeded both Goldman Sachs’ and market expectations.
- On 30 October, after the results were released, A-shares and H-shares fell 3% and 11%, respectively, while the CSI 300 Index fell 1% and the Hang Seng Index rose 1% over the same period. Goldman Sachs said investors have historically placed greater emphasis on revenue growth, and the larger decline in H-shares may also have reflected non-fundamental factors such as liquidity.
Which products supported growth, and which held it back?
- Management said third-quarter revenue from charging products rose approximately 20% year on year and consumer energy storage grew approximately 60%, faster than Goldman Sachs’ previous forecasts of 10% and 55%, respectively.
- Revenue from smart home and innovative products fell approximately 10% year on year, whereas Goldman Sachs had previously forecast growth of 20%; cleaning appliances were the main drag. Goldman Sachs believes these products still lag those of leading manufacturers.
- Revenue from audio and video products rose 10%–20% year on year, below Goldman Sachs’ forecast of 30%, with strong growth in the Liberty 5 series of active noise-cancelling earbuds. Goldman Sachs expects the company’s revenue growth to accelerate again as product gaps narrow and new products such as hearing aids launched in September contribute revenue.
Why did profit beat expectations, and where are the cost pressures?
- Management said that, excluding tariff refunds, the gross margin for the first nine months of 2026 rose 0.5–1 percentage points year on year, in line with full-year guidance. Goldman Sachs estimated, however, that the third-quarter gross margin on the same basis fell slightly year on year, by less than 0.5 percentage points.
- Regarding the decline in the selling expense ratio, management said AI-assisted marketing improved returns on marketing investment, while the strategy of bringing different sub-brands under the unified One-Anker brand also improved brand promotion efficiency.
- Memory accounts for a relatively high share of security systems’ material costs, and the business faces greater cost pressure. Management shifted toward a strategy more focused on profitability and temporarily exited some categories with intense price competition; revenue for the business was roughly flat over the first nine months.
How did Goldman Sachs adjust its forecasts and valuations?
- Taking into account the latest results and potentially slower growth in smart home and innovative products, Goldman Sachs cut its earnings-per-share forecasts for 2026–2028 by 6%–7%.
- Goldman Sachs maintained its Buy ratings on the A-shares and H-shares, lowering its 12-month price targets from 154 yuan and 159 Hong Kong dollars to 146 yuan and 151 Hong Kong dollars, respectively. The bank believes the risk-reward profile of the H-shares is more attractive after the share price adjustment: the A-share premium over H-shares widened to more than 30%, above the 13% used in its valuation methodology.
