HK Stock Market Move | Zhejiang Sanhua Intelligent Controls (02050) fell more than 4% after its results, with net profit attributable to shareholders for the first three quarters down 5.4% year-on-year; the company's gross margin improved somewhat.

Zhejiang Sanhua Intelligent Controls (02050) fell more than 4% after its results, down 4.31% as of press time to HK$22.18, with turnover of HK$135 million. On the news front, Zhejiang Sanhua Intelligent Controls announced that for the first three quarters of 2026, operating revenue was RMB25.2735 billion, up 5.18% year-on-year; net profit attributable to shareholders of the listed company was RMB3.067 billion, down 5.40% year-on-year; basic earnings per share were RMB0.73. CICC noted that Zhejiang Sanhua Intelligent Controls' 3Q26 results were in line with market expectations. The company's 3Q26 gross margin rose 0.9ppt year-on-year and 0.6ppt quarter-on-quarter to 28.9%, with the improvement mainly driven by product mix optimization and a higher share of products using aluminum instead of copper and stainless steel instead of copper. On the expense side, the selling, administrative and R&D expense ratio rose 0.8ppt year-on-year and 2.1ppt quarter-on-quarter to 13.1%, mainly due to exchange losses and increased R&D spending. Cash flow performance was solid, with operating cash flow up 23% year-on-year to RMB3.75 billion in 1-3Q26. Looking ahead, as scale effects on the expense side gradually become more prominent, the bank believes the company's profitability is expected to remain stable with upside.