Loncin Motor has reported 1H26 revenue of RMB9,775mn, up 0.24% YoY, attributable net profit of RMB991mn, down 7.73% YoY, and recurring net profit of RMB983mn, down 5.05% YoY. In 2Q26, revenue was RMB5,253mn, up 2.88% YoY/16.15% QoQ, attributable net profit was RMB520mn, down 8.37% YoY but up 10.30% QoQ, and recurring net profit was RMB514mn, down 6.83% YoY but up 9.62% QoQ. The YoY profit decline reflected FX swings and lower other income. We expect continued incremental contributions from VOGE new product ramp-up, overseas channel expansion, and all-terrain vehicle premiumization. If the asset swap completes smoothly, we expect it to strengthen synergy in the motorcycle and engine core business. The company’s ample cash flow and a high payout ratio could also reinforce shareholder returns, in our view. Maintain BUY.
Factoring in raw material costs, FX swings, and the decline in OEM revenue, we lower our forecasts. We now project 2026/27/28 revenue of RMB22.6/26.0/29.4bn (-6.48/-9.84/-13.32% from previous), and attributable net profit of RMB2,102/2,540/2,958mn (-10.51/-11.18/-14.41% from previous). Comparable companies trade at an average 2026E PE of c. 20.7x on iFinD consensus. We apply 20.7x 2026E PE (previous: 19.2x), and derive a target price of RMB21.15 (previous: RMB21.89). Maintain BUY.