China Automation and Machinery: What's New from China Industrial: SMID: Transport Conf 2026: Additional Color

In this note, we provide additional color from our conference (22-23 Sep), including data to support mgmt.'s thoughts, investors' feedback, and potential risks. Han's Laser (HL) and Han's CNC (HC) provided the most positive comments, and HC's significant increase in contract liability implies strong order book. For Inovance, investors are still concerned about automation order peak-out and NEV powertrain's margin pressure. The sentiment is most bearish on 1) construction machinery due to a) potential removal of export tax rebate, b) US antidumping and countervailing investigation on linear hydraulic cylinders imported from China, India, and Mexico, including cylinders equipped on construction machines, and c) China demand slowdown, and d) overseas demand impact from US rate hikes;