Sanhua Intelligent Controls' 2025 revenue first exceeds 30 billion yuan, with net profit growing by 30%. The robotics business faces delays, with little substantial progress.

Ask AI · Why has Sanhua Intelligent Controls’ robot business’s mass-production progress continued to lag?

Zhejiang Sanhua Intelligent Controls Co., Ltd. (hereinafter referred to as “Sanhua Intelligent Controls”) recently officially released its 2025 annual report. The report shows that in 2025, the company achieved operating revenue of RMB 31.01B, up 10.97% year over year; it achieved net profit attributable to shareholders of listed companies of RMB 4.06B, up significantly 31.10% year over year, demonstrating strong profitability and operating resilience. The company plans to distribute cash dividends of RMB 2.80 per 10 shares, for a total distribution of RMB 1.18B.

However, behind what appears to be a steady set of results, subtle changes in business structure and slow progress in strategic emerging businesses have also quietly emerged. The bio-mimetic robot electromechanical actuator business, which the market has high hopes for, still remains in the annual report at the wording of “research and development, prototype production, iteration, and sample delivery,” which is almost identical to that from half a year ago.

Revenue and Profit Both Grow, and Operating Quality Continues to Improve

In 2025, Sanhua Intelligent Controls achieved operating revenue of RMB 31.01B, breaking through the RMB 30 billion mark for the first time, up 10.97% year over year; net profit attributable to shareholders of listed companies was RMB 4.06B, up 31.10% year over year, with growth far outpacing revenue growth. The growth rate of attributable net profit exceeds that of revenue, mainly due to remarkably effective cost management; the combined gross margin increased by 1.31 percentage points year over year to 28.78%.

In terms of cash flow, the company demonstrated strong “self-generating” capabilities. Full-year net cash flow from operating activities reached RMB 5.09B, up 16.58%; by the end of the reporting period, the company’s cash and cash equivalents on hand were RMB 14.91B, up 184.12%. Total asset size reached RMB 49.41B, up 35.90% from the end of the prior year; shareholders’ equity attributable to shareholders of listed companies increased to RMB 31.75B, up 64.52%, indicating a significant optimization of the asset structure.

From the expense structure perspective, in 2025 the company’s total expenses (sales + administration + R&D + finance) totaled approximately RMB 4.14B, up about 5.22% year over year. It is noteworthy that finance costs increased sharply by 331.19% year over year to RMB 101 million, mainly because an exchange loss of RMB 210 million occurred during the period, whereas in 2024 there was an exchange gain of RMB 83 million. R&D expenses were RMB 1.37B, up 1.65%, accounting for about 4.43% of operating revenue.

Dual-Engine Drive Shows Divergence; New Energy Vehicle Thermal Management First Sees a Decline

Sanhua Intelligent Controls’ principal businesses are divided into two segments: refrigeration and air-conditioning appliance components and automotive components, with business and production capacity highly globalized. In 2025, the refrigeration and air-conditioning appliance components segment achieved operating revenue of RMB 18.59B, up 12.22%, and gross margin improved to 28.77%. Thanks to the global market share of core products such as electronic expansion valves and four-way reversing valves exceeding 50%, the company firmly holds key voice and influence along the industrial chain.

However, the performance of the automotive components segment reveals some concerns. That segment’s full-year revenue was RMB 12.43B, up 9.14% year over year; its growth rate was lower than the company’s overall revenue growth and also lower than the growth of the refrigeration business segment.

Of note is that in 2025, Sanhua Intelligent Controls’ new energy vehicle thermal management products saw both sales volume and production volume decline: sales were 63.7527 million units, down 8.30% year over year; production volume decreased 8.74% year over year to 63.8889 million units. Based on the production capacity of 91.2699 million units, capacity utilization was only around 70%. This is the first time in recent years that this business segment has experienced a year-over-year decline in both production and sales.

The annual report explains that in 2025, the global new energy vehicle industry entered a phase of structural adjustment. Although China’s new energy vehicle sales still grew 28.2% year over year, the pace of electrification transitions differed across various markets, and intensified competition brought short-term challenges to structural optimization.

The Robot Business’s Strategic Positioning Is Clear, but There Is No Substantive Progress

Leveraging advantages in motor manufacturing expertise, scalability, and cost control, Sanhua Intelligent Controls positions its bio-mimetic robot electromechanical actuator as a strategic emerging business. In 2025, the company focused on technical improvements for multiple key model products, working with customers to carry out key product research and development, prototype production, iteration, and sample delivery, receiving highly positive evaluations from customers.

Mass-production progress falling short of expectations is the primary challenge facing the robot business. In the 2025 annual report, the description of the robot business is “focus on technical improvements for multiple key model products, and work with customers on key product R&D, prototype production, iteration, and sample delivery,” which is almost word-for-word identical to that in the interim report from half a year earlier. In recent collective broker research and survey meetings, the company’s response remains the same.

The gap between these expectations and reality has already been reflected in the capital markets. International investment banks have also expressed cautious views on Sanhua Intelligent Controls’ valuation for the robot business. In a research report published by Goldman Sachs in November 2025, its rating on Sanhua Intelligent Controls’ A shares was downgraded from “Buy” to “Neutral.” A Goldman Sachs analyst pointed out that although the market is full of enthusiasm for humanoid robot business, Tesla has further postponed the release and mass-production timeline of its Optimus Gen3 robot, making near-term revenue contribution highly uncertain.

However, in the latest research report, CITIC Securities Co., Ltd. noted that the company has positioned itself strategically for humanoid robots and is expected to open up a third growth curve. The company focuses on electromechanical actuators and has already started the construction of production lines. It plans to invest in the Qiantang District to build a R&D and production base project for robot electromechanical actuators and domain controllers, with a total investment of no less than RMB 3.8 billion. It also establishes a joint venture with Green’s Harmonics in Mexico, mainly developing products related to harmonic reducers. Meanwhile, the group, together with Feng Qie, develops hollow-cup motor products, with the group controlling the venture. In 2025, the company focused on technical improvements for multiple key model products, worked with customers on key product research and development, prototype production, iteration, and sample delivery, received highly positive evaluations from customers, and achieved a series of innovation results around existing products, thereby improving the overall product strength.