Yangjie Technology (300373.SZ): 3Q26 preliminary results beat, gross margin improved QoQ

Morgan Stanley update on Yangjie Technology (300373.SZ). 3Q26 preliminary earnings beat our estimate by 14% at the midpoint. 3Q26 revenue is expected to be Rmb2.4bn-plus, up ~29% yoy and ~2% qoq, largely in line with our estimates. 3Q26 earnings are expected to be Rmb495mn, up 33% yoy and 28% QoQ, with the midpoint 14% above our estimate. 3Q26 gross margin improved QoQ, supported by strong sales growth momentum and product mix upgrades, while the company enhanced lean manufacturing and end-to-end cost controls, effectively mitigating rising raw material costs. Automotive and SiC businesses maintained strong momentum, with the automotive business achieving 100%+ growth YTD, benefiting from EV penetration increase and localization. We think the company is on track to achieve its full-year revenue target of Rmb9.5bn, and the recent sell-off offers a good opportunity to accumulate at 19x 2027e P/E, vs. its seven-year trading range of 20-31x. Maintain Overweight; price target Rmb136.00.