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Nexteer Automotive Group
(1316)
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Rating:72Outperform
Price Target:
HK$4.50
▼(-12.45% Downside)
Action:Upgraded
Date:08/19/26
The score is driven primarily by solid financial stability (especially a very low-debt balance sheet) and steady revenue growth, complemented by a positive earnings update pointing to record revenue, margin expansion, and improved free cash flow. The main offsets are thin underlying margins, uneven cash-flow conversion, and technical overextension (RSI ~79) alongside macro/pricing and cost headwinds noted on the call.
Positive Factors
Steer-by-Wire growth and bookings
The sizable bookings pipeline supports future platform revenue, while Steer-by-Wire has progressed from awards into commercial production. This combination strengthens Nexteer's technology position, broadens customer opportunities, and creates a durable avenue for growth as adoption increases.
Negative Factors
Thin profitability and uneven cash conversion
Thin net margins leave earnings sensitive to modest changes in pricing, costs, or production volumes. The decline in free cash flow and conversion below net income also indicate that accounting profit does not consistently translate into deployable cash, limiting financial quality despite positive cash generation.
Read all positive and negative factors
Positive Factors
Negative Factors
Steer-by-Wire growth and bookings
The sizable bookings pipeline supports future platform revenue, while Steer-by-Wire has progressed from awards into commercial production. This combination strengthens Nexteer's technology position, broadens customer opportunities, and creates a durable avenue for growth as adoption increases.
Read all positive factors
Nexteer Automotive Group (1316) vs. iShares MSCI Hong Kong ETF (EWH)
Market Cap
HK$10.65B
Dividend Yield3.36%
Average Volume (3M)4.07M
Price to Earnings (P/E)10.9
Beta (1Y)1.97
Revenue Growth5.98%
EPS Growth13.92%
CountryHK
Employees13,000
SectorConsumer Cyclical
Sector Strength84
IndustryAuto - Parts
Share Statistics
EPS (TTM)0.05
Shares Outstanding2,509,824,200
10 Day Avg. Volume3,168,788
30 Day Avg. Volume4,072,905
Financial Highlights & Ratios
PEG Ratio0.31
Price to Book (P/B)0.98
Price to Sales (P/S)0.45
P/FCF Ratio7.74
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
HK$7.77Price Target Upside51.08% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering12
EPS Forecast (FY)0.07
Revenue Forecast (FY)HK$4.79B
Nexteer Automotive Group Business Overview & Revenue Model
Company Description
Nexteer Automotive Group Limited, a motion control technology company, develops, manufactures, and supplies steering and driveline systems to original equipment manufacturer worldwide. It offers electric power steering (EPS) products, which includ...
How the Company Makes Money
Nexteer makes money primarily by supplying automotive components and systems to original equipment manufacturers (OEMs) under production supply contracts. Its largest revenue stream is selling steering systems—especially electric power steering (E...
Nexteer Automotive Group Earnings Call Summary
Earnings Call Date:Aug 12, 2026
(Q2-2026)
| % Change Since: |
Next Earnings Date:Mar 17, 2027
Earnings Call Sentiment Positive
The call emphasized multiple clear strengths: record first-half revenue, double-digit adjusted EBITDA growth, a strong free cash flow swing (3x prior year), robust $3.3B bookings pipeline toward a $6B target, successful commercialization of Steer-by-Wire with two production launches, and improved regional margins (notably EMEASA). At the same time, the company faces headwinds from APAC pricing pressure and China OEM contract structures, ongoing commodity cost inflation, unresolved recovery for prior EV program cancellations, a discrete production outage in Mexico, and sensitivity to favorable FX and one-time recoveries. Overall, the company communicated sustained operational momentum, strong balance sheet flexibility, and credible technology-driven growth prospects, while flagging manageable but meaningful near-term risks.Positive Updates
Record First-Half Revenue
Achieved record H1 revenue of $2.3 billion, up ~3.9% year-over-year, outperforming global vehicle production by ~180 basis points (adjusted growth 0.8% excluding FX and commodities).
Negative Updates
Market and Pricing Headwinds in APAC/China
APAC faced customer pricing pressure and lack of escalation on many China OEM contracts; management noted pricing headwinds in APAC and pricing pressures contributed to offsetting volume/launch benefits. APAC bookings contribution fell to ~34% in H1 (versus 45% for FY2025).
Read all updates
Q2-2026 Updates
Positive
Negative
Record First-Half Revenue
Achieved record H1 revenue of $2.3 billion, up ~3.9% year-over-year, outperforming global vehicle production by ~180 basis points (adjusted growth 0.8% excluding FX and commodities).
Read all positive updates
Company Guidance
Management guided that despite a softer vehicle production outlook (H1 volumes ~1% below prior year and H2 volumes expected ~3% YoY decline), Nexteer remains on track for another year of record revenue (H1 revenue $2.3B, +3.9% YoY) and to outgrow the market by 200–300 basis points for the full year (vs. 180 bps outperformance in H1); they reiterated a full‑year bookings target of $6.0B after $3.3B of H1 bookings and said additional Steer‑by‑Wire program launches are expected in H2. Financially, management expects continued margin expansion and operating momentum after H1 adjusted EBITDA of $263M (11.3% margin, +100 bps YoY), strong cash conversion (H1 free cash flow $109M, cash from operations $262M), and a solid balance sheet/liquidity position ($597M cash, $51M gross debt, $516M net cash, $968M total liquidity). They also guided a full‑year effective tax rate slightly below 25% (long‑term rate in the high‑teens), noted $8M of tariff recoveries in H1, and said negotiations on North America EV program recoveries are ongoing with no definitive recovery amount provided.Nexteer Automotive Group Financial Statement Overview
Summary
Income Statement
62
Positive
Balance Sheet
82
Very Positive
Cash Flow
58
Neutral
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 4.67B | 4.58B | 4.28B | 4.21B | 3.84B | 3.36B |
| Gross Profit | 537.47M | 529.32M | 481.42M | 368.59M | 367.15M | 363.43M |
| EBITDA | 501.25M | 488.22M | 451.03M | 357.48M | 362.74M | 370.10M |
| Net Income | 124.12M | 102.00M | 61.72M | 36.74M | 58.01M | 118.44M |
Balance Sheet | ||||||
| Total Assets | 3.93B | 3.77B | 3.48B | 3.40B | 3.34B | 3.21B |
| Cash, Cash Equivalents and Short-Term Investments | 596.53M | 520.75M | 422.28M | 311.74M | 245.93M | 326.52M |
| Total Debt | 80.95M | 87.02M | 91.59M | 100.39M | 110.71M | 146.76M |
| Total Liabilities | 1.72B | 1.61B | 1.45B | 1.39B | 1.36B | 1.20B |
| Stockholders Equity | 2.15B | 2.11B | 1.98B | 1.96B | 1.93B | 1.95B |
Cash Flow | ||||||
| Free Cash Flow | 361.78M | 267.18M | 164.89M | 91.91M | 173.41M | 145.78M |
| Operating Cash Flow | 533.05M | 405.53M | 446.23M | 404.12M | 293.76M | 287.38M |
| Investing Cash Flow | -333.05M | -281.41M | -279.79M | -299.15M | -263.47M | -285.66M |
| Financing Cash Flow | -66.02M | -61.61M | -43.16M | -38.40M | -85.18M | -215.45M |
Nexteer Automotive Group Technical Analysis
Negative
5.14
Price Trends
4.70
Negative
4.46
Negative
5.16
Negative
Market Momentum
-0.11
Positive
40.47
Neutral
46.82
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For HK:1316, the sentiment is Negative. The current price of 5.14 is above the 20-day moving average (MA) of 4.40, above the 50-day MA of 4.70, and below the 200-day MA of 5.16, indicating a bearish trend. The MACD of -0.11 indicates Positive momentum. The RSI at 40.47 is Neutral, neither overbought nor oversold. The STOCH value of 46.82 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for HK:1316.
Nexteer Automotive Group Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
72 Outperform | HK$10.65B | 10.89 | 5.82% | 3.36% | 5.98% | 13.92% | |
70 Outperform | HK$25.94B | 7.69 | 12.11% | 6.90% | 14.21% | 14.88% | |
68 Neutral | HK$12.64B | 8.15 | 7.18% | 4.46% | 0.22% | -23.29% | |
67 Neutral | HK$156.91B | 16.86 | 21.68% | 4.98% | 13.06% | -0.41% | |
62 Neutral | HK$16.10B | 25.37 | 5.59% | ― | 38.53% | 341.50% | |
61 Neutral | $18.38B | 12.79 | -2.54% | 3.03% | 1.52% | -15.83% | |
47 Neutral | HK$5.34B | -89.12 | -5.52% | 5.59% | -2.65% | 69.13% |
* Consumer Cyclical Sector Average
HK:1316
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Nexteer Automotive Group Corporate Events
Nexteer Automotive Delivers Stronger Interim Profit on Higher Revenue
Aug 12, 2026
Nexteer Automotive posted unaudited interim results for the six months ended June 30, 2026, showing revenue of US$2.33 billion, up from US$2.24 billion a year earlier. Profit for the period rose to US$90.32 million from US$69.01 million, with earn...
Nexteer Schedules Board Meeting to Approve 2026 Interim Results
Jul 31, 2026
Nexteer Automotive Group has scheduled a board meeting for August 12, 2026 to review and approve its interim results for the six months ended June 30, 2026 and to consider the declaration of an interim dividend. The board session, led by Chairman ...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.