Minth Group (425 HK) Summary
Core Content
Minth Group (425 HK) delivered a strong performance in 1H26, despite facing industry-wide headwinds. The company's revenue grew by 9.1% YoY, outperforming the broader global auto sales contraction of about 3% YoY. This performance was driven by robust overseas revenue growth, which outpaced the domestic market by 14.9 percentage points, contributing to a 0.4ppts increase in gross margin to 28.6%. Net profit grew by 12.3% YoY, reaching 10.7% net margin, which is the highest level since 2H21.
The company's management has set an ambitious FY30 revenue target of RMB72bn, implying a 5-year revenue CAGR of 23%. However, based on its historical performance, such as the 75% realization of its RMB10bn battery housing target in FY25, the analysis applies a similar discount rate to the FY30 target, resulting in an adjusted 16% CAGR for FY26-30, which aligns closely with current forecasts.
Minth's overseas business accounted for 68.1% of total revenue in 1H26, but there is still significant potential for growth as the company is expanding its presence with Chinese automakers such as BYD, Geely, and Changan in Europe. New business intake in 1H26 surged 2.5x to RMB46.7bn, indicating strong momentum for future revenue growth and support for the FY30E goal.
Main Points
- Robust Performance: Minth achieved a 9.1% YoY revenue growth in 1H26, defying the global auto sales contraction.
- Margin Expansion: Gross margin increased by 0.4ppts YoY to 28.6%, with overseas revenue growth outperforming domestic.
- Net Profit Growth: Net profit rose by 12.3% YoY, reaching 10.7% net margin, the highest since 2H21.
- Ambitious Target: Management has set a FY30 revenue target of RMB72bn, implying a 5-year CAGR of 23%.
- Growth Potential: Adjusted revenue growth expectations for FY26-30 are around 16%, in line with current forecasts.
- New Business Momentum: New business intake in 1H26 increased 2.5x to RMB46.7bn, showing promise for future revenue acceleration.
- Overseas Expansion: Minth is expanding its supply chain with Chinese automakers in Europe, opening new growth opportunities.
Key Financials
| Metric |
FY24A |
FY25A |
FY26E |
FY27E |
FY28E |
| Revenue (RMB mn) |
23,147 |
25,737 |
29,428 |
34,569 |
39,917 |
| YoY Growth (%) |
12.8 |
11.2 |
14.3 |
17.5 |
15.5 |
| Net Profit (RMB mn) |
2,319.3 |
2,692.2 |
2,979.4 |
3,552.6 |
4,190.4 |
| YoY Growth (%) |
21.9 |
16.1 |
10.7 |
19.2 |
18.0 |
| EPS (Reported) (RMB) |
2.02 |
2.35 |
2.53 |
3.00 |
3.51 |
| P/E (x) |
11.9 |
10.2 |
9.5 |
8.0 |
6.8 |
| P/B (x) |
1.4 |
1.2 |
1.1 |
1.0 |
0.9 |
| Yield (%) |
1.7 |
2.9 |
4.2 |
5.0 |
5.8 |
| ROE (%) |
12.0 |
12.3 |
12.1 |
13.1 |
14.1 |
| Net gearing (%) |
15.4 |
9.2 |
7.3 |
5.7 |
1.6 |
Earnings Summary
| Period |
Revenue (RMB mn) |
YoY Growth (%) |
Net Profit (RMB mn) |
YoY Growth (%) |
| 1H24 |
11,090 |
12.8 |
1,068 |
21.9 |
| 2H24 |
12,057 |
- |
1,251 |
- |
| 1H25 |
12,287 |
- |
1,277 |
- |
| 2H25 |
13,450 |
- |
1,416 |
- |
| 1H26 |
13,408 |
9.1 |
1,434 |
12.3 |
Earnings Revision
| Metric |
CMBIGM Estimate |
Consensus |
Diff (%) |
| Revenue (RMB mn) |
29,428 |
29,880 |
-1.5% |
| Gross Profit (RMB mn) |
8,295 |
8,418 |
-1.5% |
| Operating Profit (RMB mn) |
3,452 |
3,815 |
-9.5% |
| Net Profit (RMB mn) |
2,979 |
3,118 |
-4.4% |
Valuation Summary
| Metric |
2023A |
2024A |
2025A |
2026E |
2027E |
2028E |
| P/E (x) |
14.5 |
11.9 |
10.2 |
9.5 |
8.0 |
6.8 |
| P/B (x) |
1.5 |
1.4 |
1.2 |
1.1 |
1.0 |
0.9 |
| P/CFPS |
8.2 |
8.4 |
5.6 |
6.6 |
6.0 |
5.1 |
| Dividend Yield (%) |
0.0 |
1.7 |
2.9 |
4.2 |
5.0 |
5.8 |
Analyst Rating
- Rating: BUY (Maintain)
- Target Price: HK$42.00 (Previously HK$44.00)
- Upside/Downside: 49.8%
- Current Price: HK$28.04
Key Risks
- Lower revenue or margin performance
- Higher risks in overseas operations than anticipated
- Sector de-rating
Shareholding Structure
| Shareholder |
Percentage |
| Chin Jong-Hwa's family |
38.7% |
| Invesco Asset Management |
6.1% |
Stock Data
| Metric |
Value (HK$ mn) |
| Market Cap |
32,701.8 |
| Avg 3 mths t/o |
150.3 |
| 52w High/Low |
46.30 / 26.16 |
| Total Issued Shares |
1,166.3 |
Share Performance
| Period |
Absolute (%) |
Relative (%) |
| 1-mth |
2.5 |
0.3 |
| 3-mth |
-27.4 |
-27.1 |
| 6-mth |
-33.6 |
-30.3 |
Analysts
CMBIGM Ratings
- BUY: Stock with potential return of over 15% over next 12 months
- HOLD: Stock with potential return of +15% to -10% over next 12 months
- SELL: Stock with potential loss of over 10% over next 12 months
- OUTPERFORM: Industry expected to outperform the relevant broad market benchmark
- MARKET-PERFORM: Industry expected to perform in-line with the relevant broad market benchmark
- UNDERPERFORM: Industry expected to underperform the relevant broad market benchmark
Disclosures & Disclaimers
- CMBIGM does not provide individually tailored investment advice.
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- The report may contain information that is subject to change without notice.
Legal & Regulatory Information
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- Singapore: The report is distributed by CMBI (Singapore) Pte. Limited, an Exempt Financial Adviser, and is subject to Singapore's Financial Advisers Act.
CMB International Global Markets Limited
- Address: 45/F, Champion Tower, 3 Garden Road, Hong Kong
- Tel: (852) 3900 0888
- Fax: (852) 3900 0800
- Parent Company: CMB International Capital Corporation Limited (a subsidiary of China Merchants Bank)
Important Disclosures
- The information in this report is based on publicly available data and is not guaranteed.
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