Shuanghuan Driveline (002472.SZ): 3Q26 in line; more focus on AI robotics gears with auto components outperforming industry

Shuanghuan reported broadly in-line 3Q26 results, with revenue/gross profit/operating profit/net profit of Rmb2,559mn/Rmb685mn/Rmb396mn/Rmb333mn, +14%/+14%/+16%/+4% yoy and +0%/+0%/-3%/-3% vs GSe. 3Q26 GPM/OPM/NPM came in at 27%/15%/13%, +0pp/+0pp/-1pp yoy and +0pp/-1pp/+0pp vs GSe. Per discussions with management, two important updates are: 1) positive progress with NEV gear samples in development for a North American NEV customer, scheduled to be sent in 1Q27 and supply to start in 2Q-3Q27E; we continue to forecast the company's NEV revenue to outperform industry trend in 2027E, delivering 16% revenue yoy growth (above GS China Auto team's forecast of 9% NEV production volume yoy growth). 2) In addition to reduction gears for industrial robots, the company is making steady progress in AI robotics gears (Rmb70mn revenue in 9M26, expected c.Rmb150mn for 2026E, more than doubling to Rmb400-500mn in 2027E, or 4% of total revenue), planning to participate across gear product categories in