JPMorgan Sees Growth in Sanhua's Robotics and Liquid Cooling Businesses
JPMorgan analysts have updated their forecasts for Sanhua Intelligent Controls, citing an overly pessimistic market view on the company's new business ventures and capacity expansion.
The bank believes that global warming and AI-driven demand for liquid cooling will serve as structural growth drivers for Sanhua over the coming years, in addition to its robotics business transitioning from technology validation to commercialization.
JPMorgan reiterated its 'Overweight' rating on both Sanhua's H-shares and A-shares but lowered their target prices. The H-share target price was reduced from HK$42 to HK$38 (approximately $5.4 to $4.8), while the A-share target price fell from CNY 60 to CNY 51 (approximately $8.9 to $7.6).
The company's management has positioned robotics as its third growth curve, with U.S. customers pushing for accelerated delivery and capacity construction already underway.