Summary of Hengli Hydraulic Conference Call Company Overview - **Company**: Hengli Hydraulic (601100.SS) - **Industry**: Hydraulic components and systems Key Points Revenue and Earnings Forecast - Ball screw and linear guide revenue is projected to be between Rmb120 million and Rmb130 million in 2025, significantly lower than the previous guidance of Rmb250 million [1] - The estimated net loss for the ball screw and linear guide business is expected to widen from approximately Rmb50 million in 2024 to between Rmb60 million and Rmb80 million in 2025 [1] - Despite challenges in the ball screw segment, Hengli's overall earnings growth is anticipated to accelerate to double digits year-over-year in 2025, up from 0% in 2024, driven by strong performance in the excavator component business [1] Quarterly Performance Expectations - A slight quarter-over-quarter revenue decline is expected in 3Q25, attributed to strong growth in excavator components and recovery in non-excavator products [2] - Gross profit margin (GPM) for 3Q25 is estimated to be around 42%-45% [2] - Projected earnings growth for 3Q25 is estimated at 32% year-over-year, with revenue growth of 25% and a 2.0 percentage point GPM expansion [2] Humanoid Robot Business - Management is optimistic about penetrating the supply chain of a leading US NEV maker for humanoid robot components, citing competitive advantages in R&D and cost structure [2] - Plans to build humanoid robot product capacity in France and the US are in progress [2] Chairman's Share Disposal - The Chairman announced the disposal of up to 40.2 million shares (3% of total shares) between September 1, 2025, and November 30, 2025 [3] - As of the latest update, one-third of the announced shares have been sold, with proceeds intended for investment in humanoid robot-related businesses overseas [3] Mexico Plant Performance - Revenue from the Mexico plant is projected to reach Rmb100 million in 2025, with expectations to barely break even [7] Valuation and Market Outlook - The target price for Hengli is set at Rmb105.0, based on a 43x 2025E P/E ratio, which aligns with its historical average [16] - Current market capitalization is Rmb125.152 billion (approximately US$17.597 billion) [5] Risks - Key risks include weaker demand for excavator and non-excavator components, reduced profitability from the ball screw and Mexico plants, and lower-than-expected GPM due to unfavorable product mix changes [17] Investment Recommendation - The recommendation for Hengli is a "Buy" rating, with an expected share price return of 12.5% and a total return of 13.4% [5]

Investment Rating - The report maintains a "Buy" rating for Sanhua, Shuanghuan, and a "Neutral" rating for LeaderDrive, Best Precision, and Moons' Electric [1][42][45][46][49]. Core Insights - The humanoid robot industry is experiencing rapid product iterations and increased R&D focus across various players, indicating a strong long-term total addressable market (TAM) potential despite uncertainties in near-term technological breakthroughs [1]. - The report forecasts 20,000 units of humanoid robots to be shipped in 2025 and 1.4 million units globally by 2035 [1]. - Domestic players are accelerating commercialization efforts, with several auto OEMs like Tesla, XPENG, and Xiaomi testing humanoid robots in their factories, aiming for mass production by 2025-2026 [2]. - The shift in R&D focus from hardware to robotic AI development is evident, with startups introducing various AI models trained on real data to enhance performance [2]. Product Progress - A small scale of commercialization is expected in 2025, with domestic players speeding up public sales of humanoid robots [2]. - Companies like ENGINEAI have started selling humanoid robots at competitive prices, with some models priced below RMB 200,000 [2]. - Major players are establishing production lines with capacities ranging from 10,000 to 50,000 units annually, adjusting expansion based on actual customer orders [6]. Software Development - High-quality real data is crucial for training robotic AI models, with startups focusing on developing their own AI systems [2]. - UBTech is optimizing its training strategy by combining real and simulated data to improve efficiency and reduce costs [2]. Hardware Innovations - The report highlights the emergence of new players in the humanoid robot component market, focusing on product differentiation [7]. - Companies like LeaderDrive and Shuanghuan are developing new reducer products and enhancing their manufacturing capabilities [7][29][31]. Supply Chain Dynamics - The supply chain for humanoid robots is expanding, with various component manufacturers reporting progress in R&D and sample testing [10]. - Companies like Sanhua and Tuopu are preparing for mass production of actuators and other components, targeting significant market shares [26][27]. Market Outlook - The humanoid robot market is projected to grow significantly, with various companies aiming to capture substantial market shares in their respective segments [42][45][46]. - The report emphasizes the importance of continuous innovation and adaptation in the rapidly evolving humanoid robot industry [2][6].