Sieyuan Electric (002028.SZ): 3Q26 Masked by Non-Operating Items; Sound Core Profit Growth

While Sieyuan's 3Q26 results missed market expectations, we maintain our Buy rating as (i) the miss was primarily owing to non-operating items and forex losses; on a core basis, its pre-tax profit rose 27% yoy to Rmb2,940m in 9M26; (ii) its revenue growth would accelerate to exceed its target of 25% yoy in 2026E and stay high in 2027E, endorsed by >30% yoy new order growth this year; and (iii) if forex impact was excluded, its GP margin cut in 9M26 would be trimmed to 0.8ppts yoy (from 1.7ppts), within its target of not more than 1ppt yoy. Revenue rose 28.5% yoy to Rmb17.8bn in 9M26, with overseas mix up to 30% from 27% in 2025, and the ESS business turned profitable in Sept 2026. Our 2026-28E net profits are cut 5-9% for lower GP margins and more non-operating costs. Our DCF TP is cut 24.5% to Rmb163/share for the profit cuts and cash flow changes. Its 19.0x 2027E PER and 3.9x PB look undemanding vs. 26% 2026-28E EPS CAGR and 22.2% 2027E ROE.