Last week, Deutsche Bank (DB) visited Shanghai Fanuc, an industrial robotics JV between Shanghai Electric Group (SHA:601727, HKG:2727) and Fanuc in Japan. Shanghai Fanuc contributed approximately 4% to Shanghai Electric's earnings in financial year 2011 and industrial robotics is a fast-growing business in China, DB stated in its research report. For 2012, management expects revenue to grow by about 40% year on year, to approximately RMB2.8 billion. Assuming similar margins, the JV’s earnings contribution should be up to 5%.

DB raised earnings forecast in financial year 2012 by 4.1% and cut earnings in financial year by 3.2%. The brokerage also reiterated Buy on Shanghai Electric and raised target price from HK$4.7 to HK$4.9.