UBS: Lower NEXTEER's (01316) target price to 7.6 Hong Kong dollars, SbW project progressing well.

UBS has released a research report stating that NEXTEER (01316) management revealed at the 2026 Asia Investment Conference that they have already launched two Steer-by-Wire (SbW) projects this year. Management expects to receive more SbW and Electronic Mechanical Braking (EMB) orders in 2026, with plans to start production of the Rear Wheel Steer (RWS) project in the second half of this year. The bank maintains a "Buy" rating on NEXTEER but has lowered the target price from HK$8.6 to HK$7.6. Management anticipates stable year-on-year revenue growth for the 2026 fiscal year, but notes that rising commodity prices may put pressure on profit growth, especially in the Chinese business. The company is increasing efforts in cost and capacity optimization to enhance profitability. In the first quarter of this year, NEXTEER secured $1.6 billion in new orders, further expanding its REPS business with North American customers and maintaining strong core product orders momentum in China. NEXTEER's SbW orders have already been launched for the Ideall9 Livis and Tesla Cybercab, and management has observed an increasing willingness among automakers to adopt SbW technology, with SbW now penetrating models priced at 300,000 RMB. It is expected that by 2030, the penetration rate of SbW in China may exceed 20%. UBS believes that the development of SbW and NEXTEER's further acquisition of SbW orders could serve as a catalyst for the stock price.