1Q26 EBIT +34% YoY above expectation; net profit dragged by FX loss

　　恒立液压(601100)

　　Hengli’s 1Q26 net profit came in at RMB653mn, which increased only 6% YoYlargely due to the recognition of net finance expense (RMB162mn vs net financeincome of RMB199mn in 1Q25) as a result of the appreciation of RMB. EBITgrew 34% YoY to RMB775mn, driven by an impressive revenue growth of 33%YoY. Meanwhile, operating cash inflow in 1Q26 surged 9x YoY from a low baseto RMB518mn. We see these as a set of decent operating results. We think FXvolatility is normal and believe it should not affect the core valuation of Hengli.Maintain BUY with an unchanged TP of RMB109, based on 42x 2026E P/E(+1SD above the historical average unchanged, to reflect the machinery upcycleand humanoid robot components growth).

　　Risk factors: (1) Slowdown of demand for hydraulic components; (2)slower-than-expected new business development.