Kedali revenue beats expectations, but aluminium price pressure slows profit recovery

Why did third-quarter revenue and profit send mixed signals?

Kedali’s third-quarter revenue for 2026 was 5.77 billion yuan, up 45.7% year on year and 13.9% quarter on quarter; net profit was 584 million yuan, up 40.5% year on year and 21.1% quarter on quarter.
Nomura Orient International said strong downstream demand for lithium battery structural components lifted revenue slightly above its forecast, but a slower-than-expected gross margin recovery resulted in earnings below its forecast.
Revenue for the first three quarters was 14.98 billion yuan, up 41.3% year on year; net profit was 1.53 billion yuan, up 28.9% year on year, with profit growing more slowly than revenue.

Third-quarter gross margin was 21.1%, up 0.7 percentage points quarter on quarter but still 2.6 percentage points below a year earlier. According to the company’s investor relations record dated 23 October, the sequential improvement came mainly from continued operational improvements and proactive price pass-through.
Wind data show that the average London Metal Exchange aluminium price fell by about 10% quarter on quarter in the third quarter, but remained 23% above its 2025 annual average. Nomura Orient International believes raw material costs continue to constrain the gross margin recovery, and the extent to which prices are passed on to customers is another factor affecting the outlook.

Based on third-quarter revenue performance, Nomura Orient International raised its revenue forecasts for 2026–2028 by 1.8%, 6.6% and 10.9%, respectively, to 20.81 billion yuan, 25.14 billion yuan and 30.44 billion yuan.
Because aluminium prices are declining slowly and only to a limited extent, the firm lowered its gross margin forecasts for the same period by 0.5, 2.4 and 2.3 percentage points, respectively, to 21.2%, 22.3% and 22.8%.
The company’s selling, general and administrative expense ratio fell 0.5 percentage points year on year in the first three quarters of 2026. The firm also lowered its future expense ratio forecasts, but higher revenue and lower expense ratios were still insufficient to offset the impact of the gross margin forecast cuts. Accordingly, it reduced its net profit forecasts for 2026–2028 by 2.1%, 10.9% and 6.3%, respectively, to 2.24 billion yuan, 2.89 billion yuan and 3.66 billion yuan.

According to the company’s investor relations record, the Jiangmen plant is producing to meet customer demand; the Thailand plant is installing and commissioning equipment, with capacity expected to increase gradually and deliveries scheduled according to customer orders. Nomura Orient International maintained its robotics business revenue forecasts for 2026–2028 at 100 million yuan, 350 million yuan and 700 million yuan, respectively.
The firm maintained its buy rating and cut its target price from 240 yuan to 201.69 yuan, implying upside of about 33% from the 27 October 2026 closing price of 151.70 yuan. It shifted its valuation base from 2026 to 2027 and reduced its target price-to-earnings multiple from 30 times to 20 times; it believes the company’s earnings growth is slower than its peers’ and therefore assigns it a valuation below the peer average.