Key Takeaways:
- Revenue rose 3.9% to US$2.33 billion, beating JPMorgan estimates
- Net profit climbed 35% to US$86 million on FX tailwinds and lower tax
- JPMorgan raised target price to HK$5 from HK$4.50, kept Neutral rating
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Nexteer shares jump 17% as interim profit beats JPM forecasts
Nexteer Automotive reported first-half net profit of US$86 million, up 35% year over year, beating JPMorgan forecasts on revenue of US$2.33 billion.
"Nexteer continued to demonstrate strong execution in the first half of 2026, supported by customer momentum, technology advancement and operational discipline," Robin Milavec, president and global chief operating officer at Nexteer, said.
Revenue rose 3.9% to US$2.33 billion, outpacing global auto production by 180 basis points. Adjusted EBITDA reached US$263 million, or 11.3% of revenue, with margin expanding 100 basis points from the prior year. Free cash flow of US$109 million was nearly three times the level achieved in the first half of 2025. Earnings per share rose to US$0.034 from US$0.025. The company did not declare an interim dividend.
Shares jumped 17% to HK$5.25, a two-and-a-half-month high, after JPMorgan raised its price target to HK$5 from HK$4.50, equivalent to a forecast FY27 price-to-earnings ratio of 8 times. The broker lifted FY26 and FY27 earnings forecasts by 19% and 5%, respectively, citing ongoing margin recovery and long-term opportunities in steer-by-wire technology. JPMorgan maintained a Neutral rating, noting the weaker short-term global auto production outlook. The most recent analyst rating on the stock is a Buy with a HK$8.50 price target, according to TipRanks data.
Nexteer secured US$3.3 billion in new customer program bookings during the period, with 43% representing new or conquest business. China domestic OEMs accounted for approximately US$1.0 billion, or 30%, of total bookings. The company launched 28 new customer programs, including its first two Steer-by-Wire production launches in China and Mexico and its first High-Output Column EPS launch in China. Seventeen launches supported fully electric vehicle platforms, demonstrating the scalability of Nexteer's portfolio across EV, internal combustion and mixed-propulsion applications.
Management maintained full-year guidance to outperform global auto production by 200 to 300 basis points, despite expecting global auto production to decline 3% year over year in the second half. First-half revenue growth of 180 basis points above market came in slightly below that range because of weaker production in China. The company also strengthened its Asia-Pacific footprint with the March opening of a manufacturing facility in Rayong, Thailand, which began mass production of its first column EPS program in May.
The earnings beat and stock surge could draw further institutional attention to Nexteer, though the rally's sustainability depends on execution of its production outperformance guidance and global auto sector conditions in the second half. Investors will watch for updated bookings momentum and steer-by-wire adoption across Chinese OEMs including BYD, Xiaomi and Li Auto in coming quarters.
This article is for informational purposes only and does not constitute investment advice.
[1] ＜Research＞ NEXTEER (01316.HK) Jumps 17% Post-results; JPM Says 1H Revenue, Net Profit Beat Forecasts[2] Nexteer Automotive Delivers Stronger Interim Profit on Higher Revenue - TipRanks.com[3] Nexteer Reports Record First-Half 2026 Results - The Globe and Mail[4] Nexteer Reports Record First-Half 2026 Results |
Newswire[5] Nexteer Reports Record First-Half 2026 Results
