JS Global Lifestyle's 1H26 revenue was USD741mn (-4.3% YoY), net profit (NP) was USD13mn (vs a loss in 1H25), attributable NP was USD9.42mn (vs a loss in 1H25), and adjusted NP was USD15mn (+9.6% YoY). The company turned profitable, we which attribute to: 1) YoY declines in expense ratios under tight control; 2) lower share-based compensation expenses; and 3) rising efficiency and profitability of the SharkNinja APAC segment. We believe the company is in a strategic investment phase of trading expenses for market share, with emerging markets offering a substantial growth runway. In the medium to long term, we expect the SharkNinja APAC segment to enhance its profitability on the back of economies of scale, and the Joyoung segment to translate end-market demand rebounds into profit upside. Maintain BUY.
Joyoung: Revenue declined on soft demand at home
For the Joyoung segment, 1H26 revenue from sales to third-party customers fell by 4.7% YoY to USD467mn, of which Joyoung brand revenue declined by 4.5% YoY to USD463mn. By product, weaker sales performance of blenders, rice cookers, and water kettles dragged down revenue, while sales of soy milk makers and cookware grew YoY. The 1H26 GPM for the Joyoung segment contracted by 3.3pp YoY to 26.2%, due to product mix changes, the cancellation of government subsidies, and higher freight costs following an increased DTC proportion. Demand for domestic small kitchen appliances remained under pressure in 1H26. According to AVC data, 1H26 omni-channel retail sales of domestic small kitchen appliances fell by 4.8% YoY to RMB30.26bn. Joyoung rolled out differentiated products such as the K7 Pro soy milk maker to enhance its brand positioning. In addition, it is integrating online and offline sales networks. We expect the Joyoung segment to deliver profit upside and improved profitability, supported by a potential recovery in domestic small home appliance demand.
Earnings forecasts and valuation
As the Joyoung segment wrestles with demand weakness and Shark comes under market pressure while undergoing business transformation, we lower our 2026/ 2027/2028 revenue and GPM forecasts. We now project 2026/2027/2028 attributable NP of USD41/44/48mn (previous: USD66/88/108mn, revised down by 38.7/50.3/55.9%). We value the stock at 20x 2026E PE, above its peers' average of 19x on Bloomberg and Wind consensus, to price in its pending profit upside. Our target price is HKD1.83 (USD1 = HKD7.84; previous: HKD2.38, based on 16x 2026E PE). Maintain BUY.
Risks: intensifying competition, rising raw material prices, overseas demand fluctuations.