Core Insights - Hubei Zhongli Machinery Co., Ltd. has experienced over 50% annual sales growth since its production began in 2023, with over 6,000 units of forklifts sold in the first half of the year, marking a 20% year-on-year increase [1][3]. Company Overview - The company specializes in electric forklifts, particularly the high-pressure heavy-duty lithium battery forklifts, which utilize a 600V high-voltage platform and a self-controlled system, achieving significant reductions in energy consumption and carbon emissions [3]. - Zhongli Machinery has established two core R&D platforms: the Hubei Complete Machine Research Institute and the New Equipment Research Institute, supported by a team of experienced experts [3]. Product Development - The company has launched a series of products including 16 to 35-ton high-pressure heavy-duty lithium battery forklifts, lithium battery off-road forklifts, and telescopic forklifts, filling a technological gap in the heavy-duty lithium battery equipment sector [3]. - In response to the national "dual carbon" strategy, Zhongli Machinery introduced a circular regenerative lithium battery forklift, targeting the existing market of over 4 million internal combustion forklifts in China, and has sold 2,000 units of this eco-friendly product this year [3].

Performance Review - Company reported 1Q25 financial data: revenue of 5.876 billion yuan, a year-on-year increase of 14.6%, gross profit of 1.428 billion yuan, a year-on-year increase of 11.8%, and net profit attributable to shareholders of 635 million yuan, a year-on-year increase of 23.2%, meeting expectations [1]. Development Trends Mining Equipment - Domestic demand remains resilient, with positive outlook for overseas expansion of mining trucks. Domestic coal prices are in a downward trend due to weak demand. Current demand for tunneling machines and wide-body trucks is strong, while hydraulic support prices are under intense competition. The company expects good growth for overseas wide-body trucks and large mining trucks, driven by product upgrades and reduced overall user costs, indicating significant long-term growth potential in large mining trucks and related aftermarket [1]. Logistics Equipment - Demand for port machinery is on the rise, with expansion of new products overseas. Starting in 2023, global demand for port equipment is recovering, with full orders for large port machinery and gradually strengthening order profitability. Exports of small port machinery products remain robust in Asia, Africa, and Latin America. Over the past three years, the company has aggressively expanded new products like telescopic forklifts in the European and American markets, currently producing in India to address tariff issues. The company is optimistic about the trend towards electrification of small port machinery and the continued expansion of new products overseas [1]. Oil and Gas Equipment - Demand and profitability are expected to recover. In 2024, revenue and profitability declined due to major clients' cost-cutting measures. The company anticipates marginal recovery in industry demand in 2025, with strengthened internal management to restore market share [2]. New Industries - Focus on cost reduction and efficiency improvement, expanding overseas application scenarios. In 2024, the company will enhance management reforms for new industries, readjusting businesses with intense competition and limited profitability. It is expected that operating losses in new industries will significantly narrow in 2025, optimizing the efficiency and return rate of existing assets [2]. Profit Forecast and Valuation - The company maintains the 2025 EPS forecast at 0.70 yuan and introduces the 2026 EPS forecast at 0.81 yuan. The current stock price corresponds to 7.9x/6.7x P/E for 2025/2026. Considering the improvement prospects in new industry profitability, the target price is raised by 25% to 7.10 HKD, corresponding to 9.5x/8.1x P/E for 2025/2026, indicating a 21% upside potential, maintaining an outperform rating [2].

Core Viewpoint - CICC maintains the EPS forecast for SANY International (00631) at 0.70 HKD for 2025 and introduces a new EPS forecast of 0.81 HKD for 2026, raising the target price by 25% to 7.10 HKD, indicating a 21% upside potential based on improved profitability in new industries [1] Financial Performance - The company reported Q1 2025 financial data with revenue of 5.876 billion HKD, a year-on-year increase of 14.6%, gross profit of 1.428 billion HKD, up 11.8%, and net profit attributable to shareholders of 635 million HKD, reflecting a 23.2% year-on-year growth, aligning with CICC's expectations [2] Mining Equipment - Domestic demand remains resilient, with strong demand for tunneling machines and wide-body trucks, despite weak coal prices. The company is expected to see good growth in overseas wide-body trucks and large mining trucks, supported by product upgrades and reduced overall user costs, indicating significant long-term growth potential [3] Logistics Equipment - Global demand for port equipment is recovering, with a full order book for large port machines and improving order profitability. The company has successfully expanded its small port machine exports in Asia, Africa, and Latin America, and has introduced new products like telescopic forklifts in the European and American markets, produced in India to mitigate tariff issues. The trend towards electrification of small port machines is viewed positively [4] Oil and Gas Equipment - In 2024, revenue and profitability are expected to decline due to cost-cutting measures from major clients. However, a marginal recovery in industry demand is anticipated in 2025, with the company focusing on internal management improvements to regain market share [5] New Industries - In 2024, the company is enhancing management reforms in new industries to improve efficiency and reduce costs. A significant narrowing of operational losses in new industries is expected in 2025, along with better utilization and return rates of existing assets [6]

Core Viewpoint - Hangzhou Advance Gearbox Group Co., Ltd. (referred to as "Hangzhou Advance") reported a revenue of 2.301 billion yuan for 2024, marking a year-on-year increase of 22.22%, and a net profit attributable to shareholders of 241 million yuan, up 13.88% year-on-year [1] Group 1: Business Performance - The company focuses on gear transmission device R&D and manufacturing, with products widely used in shipbuilding, wind power, and construction machinery sectors [1] - The core traditional business, marine gearboxes, generated revenue of 1.095 billion yuan in 2024, a decline of 4.22% year-on-year, yet the company continues to optimize product structure and upgrade technology [1] - Revenue from wind power products reached 1.177 billion yuan, showing a significant growth of 91.18% year-on-year, driven by the acceleration of large megawatt wind power market trends [2] - The engineering machinery segment achieved revenue of 354 million yuan, reflecting an 8.71% year-on-year increase, with new products like integrated excavators and telescopic forklifts being introduced [3] Group 2: Strategic Focus - The company is committed to a dual-driven strategy of "solid foundation + extended boundaries," enhancing its traditional advantages while expanding into high-end equipment and new energy applications [1] - In the wind power sector, the company is optimizing business collaboration with main engine manufacturers, leading to significant sales growth of gearboxes for 6.X megawatt and above models [2] - Continuous R&D investment is emphasized as a key to enhancing core competitiveness, allowing the company to meet market demands for high-end gear transmission devices [3]