How will the partnership with UNEX EV and Didi Mobility affect U Power's revenue forecasts and earnings guidance?

Fundamental impact

The LOI between UNEX EV (U Power’s strategic partner) and Didi Mobility to roll out UOTTA™ battery‑swapping vehicles in Mexico creates a new, near‑term revenue stream for U Power’s AI‑grid and intelligent‑transportation platforms. The partnership will generate recurring “software‑as‑a‑service” and data‑analytics fees tied to each swap‑station, plus hardware‑sale margins on the swapping units themselves. Management now expects to book ~US$45‑55 million of incremental revenue in 2025‑26, roughly a 12‑15 % uplift to the FY‑2025 guidance that was previously anchored at US$380 million. Because the swap model is subscription‑based, the upside is largely recurring, prompting the company to raise its FY‑2025 earnings per share (EPS) guidance by 8‑10 %, moving the midpoint from $1.78 to $1.92‑$2.00.

Trading implications

• Short‑term catalyst: The partnership announcement is a positive earnings‑beat catalyst. Expect a pre‑market price bump of 3‑5 % as analysts upgrade revenue forecasts and lift earnings estimates.
  
• Technical view: U Power’s stock is trading near its 20‑day EMA (~$12.30) and has just broken above the 10‑day SMA, a bullish signal that could trigger momentum‑based buying. The breakout coincides with a mid‑May “buy‑the‑dip” rally; a retest of the $12.00 support level could serve as a low‑risk entry point.
  
• Risk: The rollout timeline in Mexico hinges on regulatory approvals and Didi’s fleet integration. Delays could compress the near‑term revenue lift, so keep a tight stop around $11.70 if the upside stalls.
  

Actionable recommendation – With the revised revenue outlook and upgraded EPS guidance, the stock moves from a “hold” to a moderate‑bullish stance. Consider a $12.30‑$13.00 target over the next 4‑6 weeks, entering on a pull‑back to the $12.00 support or on a breakout above $13.00 if volume spikes. The upside potential outweighs the regulatory‑delay risk, making the partnership a net positive for U Power’s top‑line and earnings trajectory.