Summary of Leader Drive (688017.SS) Conference Call Company Overview - **Company Name**: Leader Drive (LD) - **Industry**: Robotics and Automation - **Specialization**: Production and sale of precision reducers, including harmonic reducers and mechatronic actuators for various sectors such as industrial robots, service robots, CNC machine tools, aerospace, and medical equipment [22][23] Key Points and Arguments Humanoid Robot Market Potential - **Market Position**: Leader Drive is positioned as a key beneficiary in the humanoid robot and physical AI era, with expectations of mass production and commercialization of humanoid robots [1] - **Growth Forecast**: Management indicated that humanoid robot shipments could at least double in 2026, leading to a significant increase in revenue contribution from humanoid robots, projected to rise from approximately 20% in 9M25 to 40-50% in 2026 [4][1] Financial Performance and Projections - **Earnings Forecast**: For 4Q25E, Leader Drive is expected to report a net profit of Rmb27 million, an increase of 11.2 times year-over-year from a net loss of Rmb3 million in 4Q24, driven by humanoid robot contributions and market share gains in industrial robots [3] - **Revised Earnings Estimates**: Earnings forecasts for 2025, 2026, and 2027 have been raised by 1%, 1%, and 2% respectively, reflecting a more positive outlook on the humanoid robot business [1] - **Target Price Adjustment**: The target price has been increased by approximately 25% to Rmb233, based on a revised P/E ratio of 233x for 2026E [1][5] Valuation Metrics - **Valuation Ratios**: The new target price reflects a P/E ratio of 233x for 2026E, adjusted from 281x for 2025E, indicating a more conservative approach due to gross profit margin pressures on the industrial robot side [5] - **Market Capitalization**: As of January 7, 2026, Leader Drive's market cap is Rmb34,994 million (approximately US$5,011 million) [7] Competitive Landscape - **Comparison with Competitors**: While Leader Drive has a higher exposure to humanoid robot revenues, Hengli Hydraulic is preferred due to its cheaper valuation despite Leader Drive's stronger growth potential in humanoid robots [1][4] Risks and Challenges - **Downside Risks**: Key risks include slower growth in the automation market, increased competition, higher raw material costs affecting gross profit margins, and lower contributions from humanoid robots and other emerging applications [25] Financial Summary - **Projected Financials**: - **2025E Net Profit**: Rmb122 million - **2026E Net Profit**: Rmb184 million - **2027E Net Profit**: Rmb248 million - **2026E EPS**: Rmb1.006, with a growth rate of 50.7% [6][12] Additional Insights - **NVIDIA's Role**: NVIDIA's open-source platforms are expected to accelerate the development and deployment of humanoid robots, enhancing Leader Drive's market position [2] - **Capacity Expansion**: Leader Drive is expanding its production capacity from 40,000 units per month to 80,000 units per month to meet the anticipated demand for humanoid robots [4] This summary encapsulates the critical insights from the conference call regarding Leader Drive's strategic positioning, financial outlook, and market dynamics in the robotics industry.

Ac t i o n | 18 Dec 2025 11:38:03 ET │ 15 pages Hengli Hydraulic (601100.SS) Raise TP to Rmb135 on Stronger Core Business Guidance and Humanoid Robot Rerating CITI'S TAKE We increase our 2025/26/27E earnings forecasts by 2%/7%/11% as mgmt. turned more bullish than before on 2026 outlook due to recent strong order wins on components for both excavator and non-excavator such as agricultural machinery. For excavator components, the orders are mainly from Chinese OEM's overseas sales and the leading US excavato ...

Investment Rating - The report maintains a "Buy" rating for Hengli Hydraulic, anticipating a sequential business recovery driven by improving excavator component demand and potential growth in the humanoid robot sector [3][25]. Core Views - The report highlights that Hengli's earnings growth is expected to accelerate to 17% year-over-year (YoY) in 2Q25, up from only 3% YoY in 1Q25, primarily due to stronger demand for excavator components from Chinese OEMs and foreign customers [1][19]. - Revenue growth for Hengli is forecasted at 13% YoY in 2Q25, driven by the excavator component business, which is outpacing the overall growth of China's excavator industry [2][19]. - The report emphasizes that the market has not fully accounted for Hengli's potential to outgrow the Chinese excavator industry due to increased exports and restocking by foreign OEMs [2][19]. Financial Summary - Hengli's estimated net profit for 2Q25 is projected to be Rmb800 million, reflecting a 17% YoY increase and a 30% quarter-over-quarter (QoQ) increase [2][8]. - The target price for Hengli is set at Rmb85.0, based on a price-to-earnings (P/E) ratio of 40x for 2025E, which aligns with its historical average [26][7]. - The expected total return for Hengli's shares is 22.1%, comprising a 21.1% price return and a 1.0% dividend yield [4][7]. Market Position and Strategy - Hengli Hydraulic is recognized as China's leading hydraulic parts supplier, focusing on the research, development, and manufacturing of hydraulic components [24]. - The company is preparing to produce up to 100,000 planetary roller screws for humanoid robot clients by 2026, despite uncertainties in demand from clients [25]. - The report notes that losses from Hengli's Mexico and ball screw & linear guide plants are expected to decrease as production ramps up [25].