Shenzhen Transsion Holdings: Q226 prelim result: earnings beat on better memory cost control

研报英文原文证据摘录

Shenzhen Transsion Holdings: Q226 prelim result: earnings beat on better memory cost control

%/+67% QoQ for DDR/NAND per UBS tech team estimates), while

12/27E 3.49 3.68

Transsion indicates its solid GPM in H126 was thanks to older (thus cheaper) memory 12/28E 4.53 5.24

inventory and higher smartphone ASP (i.e. the capability to pass through some of the

rising memory cost to consumers). Jimmy Yu

Analyst

Q: Has the company's outlook/guidance changed? S1460517080002

jimmy.yu@ubs.com

A: No guidance was provided in the results. At our AIC in May, mgmt. said it expected +86-21-3866 8880

GPM to remain stable into Q226 and memory price increases would start to decelerate

in H226. But with a lag in memory inventory digestion, we expect the higher costs will

start to creep in after Q226, which might cause several ppts GPM QoQ decline in Q3 and

Q4 2026; as mentioned in our latest China smartphone sector update. However, we also

expect its blended SP ASP +62% YoY in 2026E supported by 1) aggressive price hikes:

with some new model launch prices close to doubling, despite from a low base and; 2)

effective product mix shift: by price band, in 5M26 Techno (its biggest brand) >US$100

segment was +53% YoY, >$200 was +35% YoY in which $200-$299 was +419% YoY

per Counterpoint. Transsion's full results are scheduled post market close on 17-Aug.

Q: How would we expect investors to react?

A: Neutral to positive. The stock is +10% over the past 2 weeks amid broad tech sell-off.

We believe some investors have traded on better Q2 results that the market hasn't fully

priced in. The key to focus is mgmt's tone/guidance on SP margin in H226.

Highlights (Rmbm) 12/23 12/24 12/25 12/26E 12/27E 12/28E 12/29E 12/30E

Revenues 62,295 68,715 65,591 83,619 92,902 100,821 109,408 118,848