Guoyuan International maintains a "buy" rating on Harbin Electric (01133) and raises the target price to HK$26.35.

Guoyuan International released a research report stating that they have updated the revenue expectations for HARBIN ELECTRIC (01133) and increased their target price. They are giving the company a target valuation of 15.0 times the estimated PE for 2026, corresponding to a PE (TTM) of 19.80 times, and raising the target price to HK$26.35, representing an expected increase of 30.4% from the current price. They maintain a "buy" rating. The main points of Guoyuan International's analysis are as follows: The company is expected to achieve a net profit of 2.65 billion yuan in the 25th fiscal year; revenue expectations have been raised The company expects to achieve a net profit attributable to shareholders of 2.65 billion yuan in 2025, a year-on-year increase of about 57.2%, exceeding the bank's previous profit forecast of 2.5 billion yuan. The significant growth in net profit during this period is mainly due to the increase in operating income and further improvement in product profitability. This is consistent with the bank's previous judgment that the high-value orders obtained by the company earlier will gradually be released, and there is still room for improvement in the gross profit margin. At the same time, due to the expansion of the company's production scale and the significant enhancement of intelligent manufacturing capabilities, the company's economies of scale and operational efficiency have been greatly improved. The bank has updated their expected models and raised the company's future revenue expectations, with the main impacts including: In terms of revenue, the main increase is in the revenue growth rate of the company's hydropower, nuclear power, and modern manufacturing services for 2026-2027E, mainly because the company's hydropower and nuclear power have full order books, the industry's development momentum is good, and hydropower equipment is expected to open up export channels; orders for flexible transformation of thermal power are expected to be gradually released from the middle of the thirteenth five-year plan. In terms of profit, as the company's net profit for 2025 exceeded expectations, the bank has raised the forecasted gross profit margin for 2026-2027E to gradually align with the industry average.