External broker reports(aggregated public sources), CMB International

CMB International

External broker reports(aggregated public sources)

Incorporated in Hong Kong, supported by the mainland and targeting in global market, CMB International Capital Corporation Limited (“CMBI”) is an integrated financial institution providing comprehensive and professional services. As a wholly-owned subsidiary of China Merchants Bank ("CMB"), by leveraging on the Group’s synergy and coordination in domestic and overseas markets, as well as CMB’s strong resources and outstanding social reputation, CMBI and its subsidiaries have been actively implementing diversified business strategies and set up an overall layout of main business segments including Corporate Finance, Asset Management, Wealth Management, Global Markets and Structured Finance, etc. Adhering to the philosophy of “being clients oriented and increasing our own values by the way of creating value for clients”, CMBI endeavors to provide quality and integrated financial services to institutional, corporate and individual customers both domestic and overseas including Hong Kong IPO sponsorship and underwriting, share placement and rights issue for listed companies, financial advisors, bonds issuance services, asset management, direct investment, wealth management, equity sales and trading, etc.

Equity Bottom-Up

Jiangsu Hengli Highpressure Oil Cylinder / Equity Bottom-Up

<ul><li>Hengli’s net profit in 2023 was +7% YoY to RMB2.5bn, which is -5%/+3% versus our/consensus estimates.</li><li>Net profit in 1Q24 dropped 4% YoY to RMB602mn, due to weak demand for excavators’ hydraulic components and an increased expense ratio.</li><li>We trim our earnings forecast in 2024E/25E by 13%/15%, mainly due to lower volume assumptions for excavator-related products. </li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Hengli’s net profit in 2023 was +7% YoY to RMB2.5bn, which is -5%/+3% versus our/consensus estimates.Net profit in 1Q24 dropped 4% YoY to RMB602mn, due to weak demand for excavators’ hydraulic components and an increased expense ratio.We trim our earnings forecast in 2024E/25E by 13%/15%, mainly due to lower volume assumptions for excavator-related products. Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Jiangsu Hengli (601100 CH) - 4Q23 & 1Q24 Earnings Not Exciting

<ul><li>Hengli’s net profit in 2Q23 grew 24% YoY to RMB653mn, with growth accelerated from 18% in 1Q23.</li><li>That said, we do not see this as high quality growth as it was largely driven by FX gain that offset a surprisingly decline in gross margin (-4 ppt YoY).</li><li>While the overall hydraulic components demand remained weak in Jul and Aug, we expect the gross margin to recover from 2Q as we understand that Hengli reduced the discount offered to customers. </li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Hengli’s net profit in 2Q23 grew 24% YoY to RMB653mn, with growth accelerated from 18% in 1Q23.That said, we do not see this as high quality growth as it was largely driven by FX gain that offset a surprisingly decline in gross margin (-4 ppt YoY).While the overall hydraulic components demand remained weak in Jul and Aug, we expect the gross margin to recover from 2Q as we understand that Hengli reduced the discount offered to customers. Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Jiangsu Hengli (601100 CH) – 2Q23 Earnings +24%

Thematic (Sector/Industry)

<ul><li>Both excavators and wheel loaders, the two major earthmoving machinery, saw double-digit growth in China market in May.</li><li>According to China Construction Machinery Association (CCMA), domestic sales of excavators grew 29% YoY to 8.5k units in May, with growth rate accelerating from 9%/13% in Mar/Apr.</li><li>We believe the growth in May was driven by small-size excavators as a result of utilities and municipal projects. </li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Both excavators and wheel loaders, the two major earthmoving machinery, saw double-digit growth in China market in May.According to China Construction Machinery Association (CCMA), domestic sales of excavators grew 29% YoY to 8.5k units in May, with growth rate accelerating from 9%/13% in Mar/Apr.We believe the growth in May was driven by small-size excavators as a result of utilities and municipal projects. Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Capital Goods - Domestic excavator sales +29% YoY in May

<ul><li>We expect the rally of the construction machinery sector to continue, given more policy details released earlier by the Ministry of Housing and Urban-Rural Development to support the replacement and upgrade of machinery.</li><li>Besides, the NDRC mentioned in a press conference yesterday (17 Apr) that the authority has completed the preliminary screening for the local government special bond projects.</li><li>We believe all these will gradually help improve the domestic machinery demand. Our short-term pecking order in the construction machinery space is Zhejiang Dingli (603338 CH, BUY), Zoomlion (1157 HK/000157 CH, HOLD), Jiangsu Hengli (601100 CH, BUY) and SANY Heavy (600031 CH, HOLD).</li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

We expect the rally of the construction machinery sector to continue, given more policy details released earlier by the Ministry of Housing and Urban-Rural Development to support the replacement and upgrade of machinery.Besides, the NDRC mentioned in a press conference yesterday (17 Apr) that the authority has completed the preliminary screening for the local government special bond projects.We believe all these will gradually help improve the domestic machinery demand. Our short-term pecking order in the construction machinery space is Zhejiang Dingli (603338 CH, BUY), Zoomlion (1157 HK/000157 CH, HOLD), Jiangsu Hengli (601100 CH, BUY) and SANY Heavy (600031 CH, HOLD).Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

China Construction Machinery - More Policies to Support Domestic Machinery Demand

<ul><li>What is new? The European Commission announced yesterday (13 Nov) that it will initiate an anti-dumping proceeding concerning imports of mobile access equipment (MAE, or AWP) from China.</li><li>While this looks negative to the Chinese AWP manufacturers at first glance, we think the estimated investigation time of 13-14 months will provide the Chinese manufacturers with time to take measures to mitigate the potential impact.</li><li>For instance, they can localize their AWP production overseas to avoid the potential duties. Besides, given that different tariffs may be applied, manufacturers with more experience in dealing with the investigation will have the chance to fight for lower tariffs.</li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

What is new? The European Commission announced yesterday (13 Nov) that it will initiate an anti-dumping proceeding concerning imports of mobile access equipment (MAE, or AWP) from China.While this looks negative to the Chinese AWP manufacturers at first glance, we think the estimated investigation time of 13-14 months will provide the Chinese manufacturers with time to take measures to mitigate the potential impact.For instance, they can localize their AWP production overseas to avoid the potential duties. Besides, given that different tariffs may be applied, manufacturers with more experience in dealing with the investigation will have the chance to fight for lower tariffs.Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

China

Jiangsu Hengli Hydraulic Co Ltd develops, manufactures and sells high pressure tank, hydraulic components and hydraulic systems. The Company's main products include fuel tanks and non-standard cylinders for heavy equipment.

Jiangsu Hengli Highpressure Oil Cylinder (601100 CH)

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Jiangsu Hengli Highpressure Oil Cylinder (601100 CH)

Jiangsu Hengli (601100 CH) - 4Q23 & 1Q24 Earnings Not Exciting

Hengli’s net profit in 2023 was +7% YoY to RMB2.5bn, which is -5%/+3% versus our/consensus estimates. Net profit in 1Q24 dropped 4% YoY to RMB602mn

CMB International

Jiangsu Hengli (601100 CH) – 2Q23 Earnings +24%

Hengli’s net profit in 2Q23 grew 24% YoY to RMB653mn, with growth accelerated from 18% in 1Q23. That said, we do not see this as high quality...

CMB International

Capital Goods - Domestic excavator sales +29% YoY in May

According to China Construction Machinery Association (CCMA), domestic sales of excavators grew 29% YoY to 8.5k units in May, with growth rate...

CMB International

China Construction Machinery - More Policies to Support Domestic Machinery Demand

We expect the rally of the construction machinery sector to continue, given more policy details released earlier by the Ministry of Housing and...

CMB International

China Construction Machinery

The European Commission announced yesterday (13 Nov) that it will initiate an anti-dumping proceeding concerning imports of mobile access equipment...

CMB International

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52-week Range

Market Cap (USDm)

P/E

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