Investment Rating - The investment rating for the company is "Buy" with a 6-month outlook maintained [6]. Core Views - The company has shown stable performance in its mid-year results for 2025, with revenue reaching 5.171 billion yuan, a year-on-year increase of 7%, and a net profit attributable to shareholders of 1.429 billion yuan, up 10.97% year-on-year [1]. - The company is expected to benefit from the linear actuator project, which is anticipated to become a new growth driver, entering mass production and contributing to performance incrementally [3]. - The company is actively expanding its international presence, with its largest overseas production base in Mexico now operational, which is expected to contribute to new revenue streams [4]. Financial Performance Summary - For the first half of 2025, the company achieved a gross margin of 41.85%, an increase of 0.33 percentage points year-on-year, and a net profit margin of 27.7%, up 1.01 percentage points year-on-year [1]. - The company sold 308,300 hydraulic cylinders for excavators, representing a year-on-year growth of over 15%, while non-excavator hydraulic pump and valve products saw sales growth exceeding 30% [2]. - The company forecasts net profits attributable to shareholders for 2025, 2026, and 2027 to be 2.783 billion yuan, 3.202 billion yuan, and 3.882 billion yuan respectively, with corresponding PE ratios of 41.0, 35.7, and 29.4 [4].

Core Viewpoint - Hengli Hydraulic (601100) reported a positive performance in the first half of the year, with significant growth in revenue and net profit, reflecting a recovery in the engineering machinery industry driven by macroeconomic policies [1][2]. Financial Performance - The company achieved operating revenue of 5.17 billion yuan, a year-on-year increase of 7.00% [2]. - Net profit attributable to shareholders reached 1.43 billion yuan, up 10.97% compared to the previous year [2]. - The net profit after deducting non-recurring gains and losses was 1.45 billion yuan, representing a growth of 16.90% year-on-year [1][2]. - The total profit for the period was approximately 1.61 billion yuan, reflecting a 10.22% increase from the previous year [2]. - The net cash flow from operating activities was 618.51 million yuan, an increase of 13.25% [2]. Market and Product Performance - The engineering machinery industry showed signs of recovery, with significant growth in both domestic and international sales [2]. - The company sold 308,300 hydraulic cylinders for excavators, marking a year-on-year increase of over 15% [2]. - Sales of hydraulic pumps and valves for excavators in medium and large models continued to grow, with an increase in market share [2]. - Non-excavator hydraulic pump and valve products saw sales growth exceeding 30% [2]. Customer and Market Expansion - The company expanded its customer base significantly, adding nearly 300 new clients during the reporting period [3]. - A combination of direct sales and distribution channels was employed to enhance market presence [3]. - The company’s largest overseas production base in Mexico has commenced operations, contributing to international market penetration [3]. - Future projects will focus on linear actuators, emphasizing technological innovation and quality to enhance the company's leadership in electric and hydraulic transmission sectors [3].