Revenue and profit have both increased, and profitability continues to be strong. However, in the past three months, the stock price has been high and falling. When will Minshi Group (00425), the world's largest supplier of battery cases, stop falling?
The Zhitong Finance App learned that Minshi Group's 2026 semi-annual report shows that it achieved turnover of 13.408 billion yuan, up 9.1% year on year, gross profit of 3.84 billion yuan, up 10.57% year on year, shareholders' net profit of 1,434 billion yuan, up 12.3% year on year, gross margin and net shareholder interest rate of 28.64% and 10.7% respectively.
This time, both revenue and profit increased. Driven by diversified businesses, product businesses such as battery boxes, structural parts, and plastic parts maintained good growth, and the impressive performance of overseas markets. The American, Japanese, and South Korean markets grew driven by gradual mass production of new projects and increased customer demand. Furthermore, the company is actively exploring new tracks, including R&D and development in new fields such as artificial intelligence, robotics, and low-altitude economy, to create a second growth curve.
However, the company's market capitalization performance was not ideal. This year's decline was more than 20%. Among them, Q2 began to decline at an accelerated pace, and it almost fell short from its high point in the past three months. So why isn't Minshi Group favored?
Diversified products+overseas markets have strengthened, and revenue and profit have maintained double growth
The Zhitong Finance App learned that Minshi Group has two major businesses: auto parts and tooling molds. It has four major product lines: plastic parts, aluminum parts, metal and trim, and car body structure. The market layout is global, covering China, America, Europe, the Middle East and Africa. In the first half of 2026, the company's four major product lines were distributed fairly evenly, overall growth was steady, and overseas market performance was impressive, becoming the core growth engine.
In terms of products, revenue for car body structures, plastic parts, aluminum parts, metal and trim in the first half of the year was $4,513 billion, $3,331 billion, $2,399 billion and $2,739 million, respectively, up 25.96%, 12.73%, -2.8% and 3% year-on-year respectively, with revenue shares of 33.7%, 24.1%, 17.9% and 20.4% respectively. In addition, the company's revenue from other products was 1.72 billion yuan, up 3% year-on-year, and the revenue share was 12.8%. Clearly, the company has formed a balanced and diverse product matrix.
On the market side, although affected by demand, the Chinese market was resilient in the first half of the year. Revenue share was 31.9%, overseas market revenue increased 14.36%, and revenue share 68.1%. It is worth noting that the three major markets of China, America, Europe, the Middle East and Africa have a stable structure, contributing 94.4% of total revenue. The Japanese and Korean markets contributed less to revenue, but are developing rapidly, with revenue growth of 48.9%, and revenue share rising to 5%.
Data source: Company financial report
Minshi Group's customers cover almost all car companies, including overseas brands such as Volkswagen, Toyota and Mercedes-Benz, as well as domestic brands such as BYD, Geely, Changan, Great Wall and Zero Sport. At the same time, it adjusts business strategies through localization models in response to the differentiated performance of various OEMs in different markets.
In the first half of the year, the company obtained battery box and chassis structural parts business from Toyota's Shanghai factory, breaking through the Mercedes-Benz anti-collision beam business and Honda's hybrid battery case business for the first time. Furthermore, the company successfully obtained an order for battery cases for Hyundai Kia's best-selling models in Europe, becoming its largest supplier of battery cases in the European market. In the new business of smart exteriors and traditional products, we have achieved first-order breakthroughs for many customers. Among them, we have continued to receive orders for smart interior and exterior products from customers such as SAIC Volkswagen, SAIC-GM, Geely, Great Wall, and Hongmeng Zhixing.
Strong profitability, with cash in hand of $4.525 billion
Minshi Group maintained steady profitability. In the first half of 2026, the gross profit margin was 28.6%, up 0.3 percentage points from the previous year, and the overall cost ratio was stable. Among them, the sales expense ratio decreased by 2 percentage points to 4%, and the financial expenses ratio decreased by 0.2 percentage points to 1.2%, offset by an increase in the administrative expenses ratio of 0.2 percentage points to 6.7%, and an increase of 0.2 percentage points to 6.1% in the R&D expenses ratio. The net interest rate for shareholders during the period was 10.7%, an increase of 0.3 percentage points over the previous year.
Looking at the profit margins of the business segment, the profit margins of the four major businesses of vehicle body structure, plastic parts, aluminum parts, metal and trim were stable, with profit margins of 22.1%, 29.2%, 32.8% and 31.2%, respectively. The overall segment profit margin was 28.6%, up 0.4 percentage points from the previous year. The profits of the above segments contributed 26%, 24.5%, 20.5% and 22.3%. The balanced revenue structure and profit structure brought stable and abundant cash flow to the company.
Data source: Company financial report
As of June 2026, the company had $4.525 billion in cash and equivalents, an increase of $773 million compared to the end of 2025, which means more than half of the profits were converted into cash flow. More importantly, accounts receivable and inventory increased by 319 million yuan and 629 million yuan respectively in the first half of the year, further supporting the company's strong repayment capacity. Of the 5.587 billion yuan receivables, the balance within three months was 5,016 billion yuan, accounting for nearly 90%.
Due to the increase in revenue and profit, Minshi Group's shareholder return was stable. On a semi-annual basis, the ROE for the first half of 2024-2026 was 5.52%, 5.84%, and 6.09%, respectively, and the annualized ROE was over 10%. In addition, the company will distribute a final dividend every year. In 2024 and 2025, it will distribute HK$0.435 and HK$0.764 per share, accounting for 18.43% and 27.46% of earnings per share, showing an upward trend. According to the 2025 final dividend, the dividend ratio is over 3%.
Open up a second growth curve, and the investment bank's target price premium exceeds 70%
From an industry perspective, Minshi Group's market is concentrated in Europe, America and China, benefiting from the rapid development of new energy sources, bringing structural development opportunities. According to data, in the first half of the year, the number of pure electric vehicle registrations in 17 European countries reached 1.241 million, an increase of 33.7% over the previous year. The penetration rate in most countries reached 30%. Among them, France and Finland had penetration rates of 29.6% and 48.9% respectively; China's NEV sales growth rate has slowed, but the penetration rate has reached 50%.
As one of the world's largest battery box suppliers, the company actively grasps opportunities and attaches great importance to R&D to stabilize its leading position in the market. The company drives technological breakthroughs in technology through independent innovation and deep cooperation with customers such as traditional automobile manufacturers, new car builders, battery manufacturers, etc. The direction includes products such as battery boxes, chassis structural parts, and intelligent integrated exterior. At the same time, it also provides multi-material and lightweight product solutions, continuously enriches a diverse product matrix, and drives performance growth in a balanced manner.
It is worth mentioning that Minshi Group focuses on R&D and development in new fields such as AI infrastructure, intelligent robots, low-altitude economy, and commercial aerospace, anchoring segments with high value and high barriers, and accelerating the development of the second growth curve. The company focuses on R&D and development of related products such as AI server liquid cooling systems, solid oxide fuel cell systems, and solid state transformer systems.
Among them, the AI server liquid cooling system covers a full range of core supporting products such as liquid cooling plate modules, intelligent water dividers, liquid cooling distribution units, and immersion liquid coolers, etc., which have received orders from Taiwanese customers and were mass-produced and delivered on a large scale during the review period; in the SOFC field, self-developed connectors, supports, battery frames and other products have achieved project breakthroughs in the Chinese market and completed small-batch delivery; in the field of low-altitude economy, it has cooperated deeply with many leading Chinese flying vehicle electric/vertical take-off and landing aircraft (eVTOL) OEMs to participate in simultaneous airworthiness design and airworthiness of many airworthy models Certification work, already Achieve product delivery for multiple models.
Furthermore, based on trillion-level racetrack embodied intelligence development and policy trends, the company actively lays out the field of intelligent robots, focusing on developing robot parts, robot OEM, and secondary development. In the field of robot parts, the company has established good cooperative relationships with major robot machine customers in China, and has completed batch supply to many major customers in China. Among them, self-developed mask products received a mask order from a mainstream robot customer in North America in July 2026. The new business progressed steadily, and the company's second growth curve took shape at an accelerated pace.
Overall, Minshi Group's performance has grown steadily, and revenue and profit have continued to increase. Thanks to diversified product drivers and the continuous development of overseas markets, as well as structural opportunities brought about by the rapid development of new energy vehicles, the company invested in R&D to continuously enrich its product matrix, and its leading position in the industry was stable. Furthermore, the company's profitability has been steadily improving, its cash repayment capacity is strong, and its accounts receivable age are short, boosting shareholder return (ROE) and return on cash.
Since this year, the company's stock price performance has been poor, mainly dragged down by the auto parts sector. The sector has fallen by more than 20%, and it is difficult for high-quality products to stand alone. However, as far as long-term trends are concerned, the market value of Minshi has more than doubled in the past three years, and the company was favored by most investment banks after the results were released.
For example, CMB International believes that the company's revenue in the first half of the year bucked the trend. Overseas revenue growth was 14.9 percentage points higher than domestic revenue, and the net interest rate hit a new high since the second half of 2021, giving a target price of HK$42; Jefferies Research is optimistic about the company's new business, and ODM production of its integrated robot will also begin in June. It is expected to contribute about 300 million yuan in revenue in the second half of the year, giving a target price of HK$47.7. Currently, the target price premiums of the two major investment banks have exceeded 70%.