Morgan Stanley: Estun Publishes 1H26 Preliminary Net Profit of RMB150–180mn (vs. RMB7mn in 1H25)
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Key Views
Despite the significant profit improvement, Q2 net profit remained below Morgan Stanley's own expectations, leaving the rating and core investment thesis unchanged. The valuation applies a sum-of-the-parts approach: the core business is valued at 50x 2027E P/E, below its two-year historical forward average of 65x, reflecting lower margins. The humanoid robot business is valued at 15x 2028E P/S on forecast sales of RMB680mn, a discount to the roughly 20x average for leading humanoid robot manufacturers, attributable to Estun's smaller scale and market share.
Outlook and Recommended Securities
Morgan Stanley maintains an Underweight rating on Estun Automation (002747.SZ / 002747 CS) with a target price of RMB29.60, below the July 14, 2026 closing price of RMB38.40. The sector view is In-Line. Upside risks include faster market share gains and component cost reductions. Downside risks include industrial robot market slowdowns and intense price competition.