Goldman Sachs Megmeet (002851): 1Q26 Sales In Line, Operating Profit Misses; Neutral on Valuation
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Goldman Sachs maintains a Neutral rating on Megmeet (002851) with a 12-month target price of RMB 38. In the first quarter of 2026, the company reported sales of approximately RMB 1.9 billion, representing a 30% year-over-year increase that aligned with Goldman Sachs expectations. However, operating profit reached roughly RMB 150 million, falling short of the forecast by about 10%. This earnings miss was primarily driven by higher-than-anticipated research and development expenditures alongside elevated selling, general, and administrative expenses.
On a positive note, Megmeet's AI power supply business is actively ramping up, and new project initiatives alongside product development efforts remain firmly on schedule. Despite these encouraging operational advancements, the lack of immediate quantitative financial benefits from these new ventures continues to temper the investment outlook.
Goldman Sachs evaluates the current valuation as fundamentally fair, noting that the stock trades at roughly 30 times and 24 times price-to-earnings multiples for 2026 and 2027, respectively. Given this reasonable but relatively full valuation, the bank sees limited upside potential in the near term. Therefore, Goldman Sachs reiterates its Neutral stance and maintains the RMB 38 target price, advising investors to await clearer catalysts regarding margin recovery and the tangible financial accretion from the emerging AI power supply segment before adjusting their positioning.
Key exhibits
Exhibit 1
