Mixed 2Q alert; resilient legacy business, DCs to resume strong growth from 3Q

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Mixed 2Q alert; resilient legacy business, DCs to resume strong growth from 3Q

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Huaqin (H/A)

Mixed 2Q alert; resilient legacy business,

DCs to resume strong growth from 3Q

PO: 105.00 HKD | Price: 68.80 HKD

Mixed 2Q profit alert 15 July 2026

Huaqin guided 2Q revenue to reach CNY53bn (mid-point; +31% QoQ, +52% YoY), above Equity

BofAe/consensus by 6%/11%. On the bottom line, 2Q earnings are guided to reach

CNY1.9bn (mid-point, +81% QoQ, +127% YoY), above BofAe/consensus by 62%/63%,

Key Changesdue to CNY1bn of one-off items (mostly investment gains, esp. holdings in GigaDevice-

H). Excluding these one-off items, earnings would be c.CNY861mn at the mid-point (CNY) Previous Current

(+5% QoQ, +15% YoY), 27% below both BofAe and consensus estimates. 2026E EPS 3.40 3.67

2027E EPS 4.56 4.55

2026E EBITDA (m) 6,357.1 5,985.9Consumer electronics proved more resilient than feared

Despite declining datacenter revenue YoY in 1H, Huaqin still likely delivered better-than- 2027E EBITDA (m) 8,524.6 8,510.9

expected topline, suggesting its consumer electronics business is more resilient than 2028E EBITDA (m) 10,278.8 10,288.9

expected. According to management, mobile terminal shipments increased by more than

10% YoY in 1H, while non-smartphone devices now account for a higher mix. Katherine Zhu >>

Research Analyst

Management also maintained guidance for wearables/AIoT/PC. Merrill Lynch (Hong Kong)

kexin.zhu@bofa.com

Datacenter momentum to pick up from 3Q Robert Cheng >>

Huaqin noted that datacenter revenue was c.CNY10bn in 2Q, at a similar level as 1Q. We Merrill Lynch (Taiwan)

expect Huaqin’s datacenter momentum to resume strongly from 3Q as Chinese CSPs robert.cheng@bofa.com

kick off supercluster pull-in. Mgmt. targets 50% revenue growth to CNY50-60bn in 2026.