Goldman Sachs Beijing Roborock Technology (688169.SS): 1Q26 Flash Results Show Profit Resuming Growth; Sustainability Key for Re-rating; Buy
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Goldman Sachs maintains its Buy rating on Beijing Roborock Technology (688169.SS) with a 12-month target price of Rmb 180, offering 54.2% upside from the current price of Rmb 116.76. Preliminary 2025 results aligned with expectations, while 1Q26 revenue and net profit reached Rmb 4,227 million and Rmb 323 million, up 23% and 21% year-over-year respectively. This exceeded Goldman's forecasts by 1% and 8%, marking the first positive net profit growth since 3Q24. The turnaround was primarily driven by resilient revenue expansion and quarter-over-quarter margin recovery. For 2025, total revenue was Rmb 18,695 million (+57% yoy), while net profit fell 31% to Rmb 1,363 million. Despite year-over-year gross margin declines in 4Q25 and 1Q26 due to mass-market RVCs and competitive intensity, sequential profitability improved meaningfully. This was supported by breaking even in domestic floor scrubbers and reaching break-even for robotic lawnmowers in 1Q26. US market growth accelerated over 30%, aided by offline expansion into Costco, where offline sales accounted for 30% of US revenue. Goldman notes that 1Q26 results partially restore investor confidence. However, further re-rating hinges on Roborock's ability to sustain revenue growth and gradually expand margins amid demand and competitive risks.