恒立液压：1Q26E预计销售强劲但利润疲软；新业务蓬勃发展

Forecast Change China Manufacturing Strong sales but soft profits to continuefor 1Q26E; New businesses flourishingHengli Hydraulicreported4Q25resultsintheeveningof20April2026andhostedan Iris Zheng,CFA Research Analyst+852-2203-5884 analyst call in themorningof21April.TheCompanywill release1Q26result intheeveningof27April. we estimate Hengli's underlying netprofit remained healthy in 4Q25.However,giventhecontinuationofFxlossesduetoRMBappreciation,weexpectHenglito report another quarter of strong sales but subdued profits in 1Q26E.Nevertheless,Hengli remainsoneofoursectortoppicksfor2026.WereiterateourBUYrecommendation,basedon:(1)therecoveringconstructionmachinerymarketbothinChina and overseas,withadditionalupsidefrompotentialreconstructiondemandintheMiddleEast;(2)Hengli'sconfirmedpositionwithinthe humanoid robot supply chain; and (3)the high-growth potential from bionicrobots and aerospace applications. We slightly reduce our target price toRMB125fromRMB129.Furthermore,asaread-across,wenotethatcompanieswithsignificantoverseasexposure,suchasSanhuaIntelligentControls,couldexperiencesimilarFXlossesin4Q25Eand1Q26E. 4Q25results:Salesaheadbutprofitbelow;Marginsweighedbyhighercosts,FXheadwindsandimpairments,someofwhichwereone-offsIn4Q25,HengliachievedstrongsalesofRMB3.15bnwithgrowthacceleratingto +28%YoY,exceedingmarketexpectation,drivenbyrobustgrowthacrosshydraulic pump(+37%YoY)and hydraulic cylinder(+20%).Net profit, however,missedmarketexpectationatRMB647mn(-10%YoY)duetoheadwindsincluding: Increasing capitalised fixed assets amid the ramp-up of the precisionmachinery business and the Mexicofactory,and the allocationof someR&DexpensetoCOGS.ThetwofactorsdraggedGPMby-6pptYoYand-1pptQoQto 40.6%in4Q25;2.FXlossofoverRMB200mnduetotheappreciationofRMB;3.Inventory impairment of~RMB100mn which management believes willreverse in 2026;4.OverRMB20mnlossfromthefireattheMexicofactoryrecordedin4Q25. ManufacturingHengli Hydraulic havebeenhealthyatoverRMB900mnwithover30%YoYgrowth.Operatingcashflow declined-35%YoYtoRMB752mn in4Q25due to the timing of bill factoring.whichmanagementguidedto improvein1Q26E. RMB10bn mark for the first time in history.Net profit hit RMB2.7bn (+9%YoY). For1Q26E,managementpointstocontinuedstrongsalesmomentumbasedonhealthy production plans. The order visibility on hand provides good visibility ofrobust sales growththroughouttoAugustand September.Profitability,however,could remain underpressure as theFX loss is guided tocontinue(DBe RMB100-200mnlossin1Q26EagainstRMB160mngainin1Q25)andweestimateGPMtoremain subdued at39.2% (-0.2ppt YoY and-1.4% QoQ). YoY)for1Q26E.Adjusted fortheFXloss,net profitwouldhavegrown healthilybyover 30% YoY. Byregion,managementisseeingfastgrowthfromEuropeand India,20-30%fromChina and single digit growth from Americas. 2026Eoutlook:Confidentaboutgrowth;FounderisfullybackManagementremainoptimistic about2026Eandtargets20%+sales andnetprofit growth with at least stableGPM.By segment, management expects20%+salesgrowth for the Hydraulic Cylinder business and 30%+ sales growth for theHydraulic Pumpbusiness. Afterthedetainmentin March,theFounderandChairmanWANG Lipinghasbeenreleased.Management confirms thatthere is no lingerimpact. WenotethatVolvohasprovided itsoutlookfortheconstructionmachinerymarketgrowth at the mid-point for Europe and China (Figure 15), which bodes well fortheoutlookfor Hengli,inourview.We awaitmore2026Etargetstobe announced byconstructionmachinerycompaniesinChina andoverseas inthecomingweeks. Humanoidrobot:Firmlyinthesupplywithproductionramp-upplannedfromlate2Q26 Management confirmed that Henglitakesthemajorshare tosupplybodyscrewsforaleading international humanoid robot manufacturer.Hengli is preparing forthe production ramp-up from late 2Q26.Hengli will use both their sites in Mexicoand China, with the Mexico site taking a higher share. Wenotethat Hengli's product portfolio includes screws forboth body and hands,as well as linearactuators.Basedonthe company's strongknow-howinprecisionmachining, we think it is possible for Hengli to expand into reducers and rotaryactuators inthefuture.In ourvaluation,wediscount 35%marketshareforHengliinbodyscrews,5%inlinearactuatorsand10%inhandscrewsby2030E humanoid robots to bionic robotics legs and arms,thanks to similarities in their ManufacturingHengli Hydraulic AccordingtoChina NationalSpaceAdministration,rocketlaunches reached92in 2025,of which commercial launches accounted for50%(link).We note thatAerospace&Space is mentionedas oneofthe"Emerging Industries"inChina'sFive-YearPlanfor2026-30,pointingtoroomforexponentialgrowth,inourview(linkto our report on China's Five-Year Plan). separators and launch pads. As a leading supplier for hydraulic systems in China,years. The Industrial Precision business (linear guides, screws and electric cylinders) generated revenueofRMB80mnin2025,upfromRMB4mnin2024,andisguidedtofurthergrowtoRMB200-300mnin2026E.Becauseofthe small size,thebusinessrecordedatanetlossofRMB150