Dahua Jixian: Cutting the target price in the Ningde Era (03750) by 40.7% to HK$400, the third-quarter profit fell short of expectations, and the tax rate increase was delayed

The Zhitong Finance App learned that Dahua Jixian released a research report saying that the net profit for the third quarter of 2026 of Ningde Era (03750, 300750.SZ) was lower than expected, at RMB 21.25 billion, up 14.5% year on year and down 5.8% from quarter to quarter. The bank maintained a “buy” rating and lowered the target price of H shares by 40.7% to HK$400 from HK$675, and the target price for A-shares was lowered by 41.4% to RMB 343 from RMB 585.

The bank pointed out that net profit for the third quarter was lower than expected because the company absorbed the export value-added tax increase and 2% consumption tax, but it has not yet been passed on to customers. The bank expects that part of the tax costs will be passed on by increasing battery sales prices, and profit margins are expected to pick up in the fourth quarter, but further decline in tax incentives in 2027 will still drag down profit margins.

The bank lowered Ningde Era's net profit forecast for 2026 to 2028 by 5%, 10%, and 16%, respectively, to 89.121 billion yuan, 104.895 billion yuan and 116.37 billion yuan; and also lowered the gross margin forecast for 2026 to 2028 to 22.7%, 22.1%, and 21.3% to reflect the impact of export value-added tax increases and consumption tax. The forecast is based on the assumption that the tax burden will be split equally between Ningde Times and customers “50:50”.