Estun Automation Earnings: Revenue Growth Decelerates Amid Gloomy Economic Outlook

As expected, Estun's third-quarter revenue growth slowed to 11% year on year from 35% in the first half. Estun attributes the slowdown to customers pushing back delivery to the fourth quarter, which we think reflects the gloomy economic outlook in China and Europe. We maintain our revenue forecast at CNY 4.9 billion but increase our 2023 net income estimate to CNY 263 million from CNY 234 million after reducing our operating expense assumptions. Our net income forecast for 2024 remains CNY 440 million. We keep our fair value estimate at CNY 17, about 7% below current share price.