Jiangsu Hengli Hydraulic - A (601100.SS): 3Q26 briefing: FA/robotics ramp and global supply chain drive next phase, margin headwinds ease; stay OW

We attended Hengli's 3Q26 results briefing on 27 October, where management delivered a more constructive outlook across both core and new businesses. Management emphasized that the traditional machinery and hydraulic business remains a solid foundation, with stable growth in cylinders, pumps, valves and motors, and continued strong demand from both domestic and overseas markets. Management highlighted robust order growth from major North American OEMs, including CAT and Deere, and noted that overseas customers are increasingly recognizing the value of Hengli's global supply chain and local production in Mexico and Indonesia. At the same time, management confirmed that the FA/ball screw gross margin turned positive in 3Q26 and is on track to exceed the full-year Rmb300MM revenue target, while robotics is entering mass production for a major US-led humanoid robot program. These developments support the view that new business lines are beginning to contribute more visibly to group results