Morgan Stanley: Inspur Information — Asia Pacific: 2Q26 Margins Beat Expectations
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Morgan Stanley (analysts Howard Kao, Andy Meng and others) reports that Inspur Information's 2Q26 profitability beat sharply. Revenue reached Rmb48.9bn, up 38% QoQ and 47% YoY, yet 4%/3% below Morgan Stanley/consensus estimates; gross margin of 10.1% (up 370bps QoQ and 420bps YoY) exceeded estimates by 550/440bps, reflecting stronger pricing power. Operating profit was Rmb2.2bn (4.5% margin, up 275% YoY) and net profit Rmb2.3bn (up 288% QoQ and 599% YoY), with EPS of Rmb1.59 well above expectations.
The analysts argue 'chip inflation' has fundamentally improved OEMs' ability to pass through component costs, with customers no longer delaying purchases in anticipation of price cuts. Chinese cloud capex commentary supports demand: Alibaba maintained full-year capex guidance of Rmb380bn (Rmb190bn spent through June) and expects AI compute to remain tight until at least 2030; Baidu reaffirmed its AI investment cycle; Tencent treats AI-native capex as a one-time outlay across this year and next. Morgan Stanley raises 2026e EPS from Rmb2.26 to Rmb4.00 (2027e/28e: Rmb3.99/4.26) and lifts the target price about 29% to Rmb96.50, equal to 24.2x 2027e P/E versus a three-year average of roughly 24.4x. The Equal-weight rating stands; the August 31 close of Rmb85.18 implies about 13% upside.