杭州制氧机：海外扩张进展顺利

EquitiesMachinery China ◆2025 net profit missed our estimatesdue toa lower-than-expectedgross margin amidsluggishdomestic retail gas prices MAINTAIN BUY TARGET PRICE(CNY)PREVIOUS TARGET(CNY)34.0037.50SHARE PRICE(CNY)UPSIDE/DOWNSIDE28.09+21.0%(as of13 Apr 2026) ◆Solid equipment order momentum y-t-d;we remain positiveon the outlook for overseas equipment growth ◆Maintain Buy and cut TP to RMB34.00 from RMB37.50 Overseas sales are picking up.Hangyangreported2025netprofitofRMB949m,up3%y-o-ybutbelowourestimates,duetolower-than-expectedgrossmarginandinterestincomeandhigher-than-expectedassetimpairmentlosses.Bysegment,industrialgasrevenueincreased14%y-o-y,drivenbythecommencementoflong-termcontractprojects,withtotaloxygengeneratingcapacityof3.6mNm³/hatend-2025,up36%y-o-y,whileretailgassalesdeclinedy-o-yamidlukewarmgasprices.Intheequipmentsegment,exportrevenuewasstrong,rising30%y-o-y,butairseparationunit(ASU)newordervaluedeclined12%y-o-yduetoweakerdemandforsmallASUs,partlyoffsetbylarge-scaleASUsfromtheenergyandpetrochemicalend-markets.In2026y-t-d,thecompany’sequipmentordermomentumhasimproved(Exhibit1),representing55%of2025totalnewordersintermsofoxygencapacity.Inparticular,thecompanywillbuildASUsforHuayouColbalt(603799CH,notrated)inIndonesia.WethinkthisisgoodprogressafterthecompanysetupsubsidiariesinSingaporeandMalaysiainAugust2025(Astrongoxygengaspricebodeswellfor3Qgrowth,30Sep2025).WeremainconfidentinHangyang’sabilitytocaptureequipmentordersfromemergingmarkets,givenitsstrongcompetitivenessinmanufacturinglarge-scaleASUs,whichispositiveforitsequipmentrevenueoutlook. Earningsrevision.WereviseupourASUsegment2026-27revenueforecastsby3-4%inviewofbetter-than-expectedordermomentumy-o-yandgrowingoverseasbusiness.Forheliumgas,salesvolumeincreased129%y-o-yin2025pertheannualreport,butrevenueexposureremainstoosmalltomateriallyaffectthebottomline.Overall,wecutour2026-27netprofitestimatesby15.3%and14.0%duetoalowergrossmargin,highersellingexpensesfromoverseasexpansioneffortsandhigherassetimpairmentlossesasaresultofweakgasprices.Weintroduce2028netprofitestimatesofRMB1,405m. Amy Hu* (Reg. No.S1700520090001)Analyst, A-share Industrials & Renewables ResearchHSBC Qianhai Securities Limitedruo.lin.hu@hsbcqh.com.cn+86 755 8898 3408 * Employed by a non-US affiliate of HSBC Securities (USA) Inc, and isnot registered/ qualified pursuant to FINRA regulations MaintainBuyratingandcutTPtoRMB34.00fromRMB37.50.WecutourtargetPBmultipleto3.1x(10%abovethehistoricalaverageof2.7xin2010-25)from3.2x(15%abovethehistoricalaverageof2.7xin2010-25).WebelieveourtargetPBisjustifiedgivenour2026-27averageROEestimateof11.8%(previously13.1%)isabovethe2010-25averageROEof11%.Applyingthistargetmultipletoour2026-27averageBVPSestimateofRMB10.96(previouslyRMB11.60),wederiveourtargetpriceofRMB34.00(fromRMB37.50).Ourtargetpriceimpliesc21%upsidefromcurrentlevels.WemaintainourBuyratingonthestock.Seepage6forkeydownsiderisks. HSBC Global Investment Summit 14 to 16 April 2026 Find out more Issuer of report:HSBC Qianhai Securities Limited Disclosures & DisclaimerThis report must be read with the disclosures and the analyst certifications in the Disclosure appendix, and with the Disclaimer, which forms part of it. View HSBCQianhai Securitiesat:https://www.research.hsbc.com Financials&valuation:HangzhouOxygenPlant Keycharts Source:Wind,HSBCQianhaiSecurities Changestoourestimates Wefactorin2025results.WereviseupourASUsegment2026-27revenueforecastsby3-4%inviewofbetter-than-expectedordermomentumy-t-dandgrowingoverseasbusiness.Wealsoliftthesegmentgrossmarginforecastby6.8-7.5pptinthesameperiodduetobetter-than-expected2025marginsandhigherproductionutilisation.Werevisedownourindustrialgasgrossmarginforecastby4.6-5.2pptinthesameperiodasweoverestimatedtheretailgassalesrecovery.Forheliumgas,salesvolumeincreased129%y-o-yin2025pertheannualreport,benefitingfromheliumsupplydisruption,butrevenueexposuretoosmalltomateriallyaffectthebottomline. Therefore,weliftour2026revenueestimateby0.5%buttrimour2027revenueby0.5%.Wecut2026-27netprofitestimatesby15.3%and14.0%duetoalowergrossmargin,highersellingexpensesfromoverseasexpansioneffortsandhigherassetimpairmentlossesasaresultofweakgasprices.Weintroduce2028estimatesinthisreport. Our2026-28estimatesarebroadlyinlinewithWindconsensus. Valuationandrisks WecutourtargetPBmultipleto3.1x(10%abovethehistoricalaverageof2.7xin2010-25)from3.2x(15%abovethehistoricalaverageof2.7xin2010-25).WebelieveourtargetPBisjustifiedgivenour2026-27averageROEestimateof11.8%(previously13.1%)isabovethe2010-25averageROEof11%.Applyingthistargetmultipletoour2026-27averageBVPSestimateofRMB10.96(previouslyRMB11.60),wederiveourtargetpriceofRMB34.00(fromRMB37.50).Ourtargetpriceimpliesc21%upsidefromcurrentlevels.WemaintainourBuyratingonthestock. Hangyangtradesat2.6x/2.5x2026/27ePBwith11.3%/12.3%2026/27eROE.A-shareindustrialgaspeerstradeat4.1x/3.8x2026/27ePBwith9.5%/10.6%2026/27eROE(Bloombergconsensus).Hangyang’svaluationlooksmoreattractivethanlocalpeers. Keydowns