Hengli Hydraulic's ball screw and linear guide orders may exceed expectations, with positive spillover from the humanoid robot supply chain

Overview

This report focuses on opportunities for Hengli Hydraulic (601100.SS) in ball screws, linear guides, and humanoid robot components. Citi believes tight supply from Japanese peers THK and NSK in the China market, combined with demand from China's semiconductor, high-precision manufacturing, injection molding machine, machine tool, AI, and humanoid robot sectors, could drive Hengli Hydraulic's related businesses to outperform current guidance.

Core views

The core views are: first, Hengli Hydraulic's year-to-date ball screw and linear guide orders are about Rmb500mn, already exceeding the company's 2026 revenue guidance of Rmb300mn, implying upside to guidance; second, the company benefits not only from semiconductor and high-precision manufacturing demand, but also more directly from import substitution in China's injection molding machine and machine tool sectors; third, CATL battery swap station construction may bring incremental demand, with management estimating ball screws and linear guides worth about Rmb50k per station; fourth, the high gross margin of Seenpin's linear actuators in the Tesla Optimus supply chain supports the view that Hengli Hydraulic's humanoid robot planetary roller screw business could deliver gross margins above the company's blended average.

Analysis framework

The report uses supply-chain read-through, peer supply-demand validation, comparison of orders versus revenue guidance, read-through from comparable business gross margins, and a P/E valuation framework. Industry evidence comes from tight supply at THK and NSK and disclosures in Seenpin's prospectus, while valuation is centered on 2027E earnings and the target P/E multiple.

Methodology notes

• Valuation methodsP/E valuation

  50x 2027E P/E

  The target price of Rmb160 is based on 50x 2027E P/E, which the report says equals the company's average P/E plus 0.5 standard deviations, to reflect a strong core business and increased humanoid robot exposure.

• Supply-chain validationPeer supply-demand read-through

  Tight supply at THK and NSK

  Japanese machinery analysts expect strong THK FY12/26 Q2 results and an upward revision to operating profit guidance. Meanwhile, THK and NSK face tight ball screw and linear guide supply in China, with lead times extended to about 9 months, supporting the view that Hengli Hydraulic benefits from supply spillover.

• Scenario analysisBull/Base/Bear

  62x, 50x, and 38x 2027E P/E scenarios

  The report discloses a bull-case scenario of re-rating to 62x 2027E P/E under strong product demand, a base-case scenario of 50x 2027E P/E, and a bear-case scenario of de-rating to 38x 2027E P/E under weaker demand.

• Margin read-throughSeenpin gross margin benchmarking

  Gross margin read-through for humanoid robot actuator business

  Seenpin's physical AI linear actuator gross margins were 62.4%/70.3%/59.5% in 2023/2024/2025, respectively. Based on this, the report infers that Hengli Hydraulic's humanoid robot planetary roller screw business may have gross margins above the company's blended gross margin.

Asset mapping & comparison

Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).

• Hengli Hydraulic (601100.SS)

  Core covered name

  Strengths

  Ball screw and linear guide orders have already exceeded 2026 revenue guidance; benefits from import substitution in China, machine tool demand, and humanoid robot demand; target price implies significant upside.

  Weaknesses

  Profitability of new businesses still depends on scaling production and delivering the product mix, and the report notes that the Mexico plant and the ball screw business may suffer from insufficient economies of scale.

  Comparison

  Compared with THK and NSK, Hengli Hydraulic is more leveraged to China's PIMM, machine tool, AI, and humanoid robot demand, as well as the domestic substitution trend.

  Risks

  Weaker-than-expected demand for construction machinery and non-construction machinery components, weaker-than-expected profitability in the ball screw business and Mexico plant, and lower-than-expected gross margin improvement from product mix enhancement.

• CATL (300750.SZ / 3750.HK)

  Potential source of demand

  Strengths

  China battery swap station construction may bring incremental demand for ball screws and linear guides.

  Weaknesses

  The report only provides management's estimate of value content per station, without actual order or revenue recognition data.

  Comparison

  CATL is not the core covered name in this report, but rather a potential downstream scenario for Hengli Hydraulic.

  Risks

  If battery swap station construction pace or equipment configuration is below expectations, demand for related transmission components may fall short of expectations.

• THK (6481.HK) and NSK (6471.T)

  Peer supply-demand read-through

  Strengths

  Tight supply of ball screws and linear guides in China and longer lead times support the industry demand outlook.

  Weaknesses

  The report mainly uses them for supply-demand validation and does not directly elaborate on investment ratings.

  Comparison

  Japanese companies are more driven by China's semiconductor and high-precision manufacturing demand, while Hengli Hydraulic is more driven by PIMM, machine tools, and import substitution.

  Risks

  If tight supply-demand conditions at Japanese peers ease, the supply spillover thesis for Hengli Hydraulic may weaken.

• Seenpin (Xinjian Transmission)

  Humanoid robot margin read-through

  Strengths

  Its physical AI linear actuator gross margin stayed around 60% or above from 2023 to 2025, supporting the view of strong profitability in the humanoid robot actuator supply chain.

  Weaknesses

  Seenpin is a source for analogy and supply-chain read-through, not equivalent to Hengli Hydraulic having already achieved such gross margins itself.

  Comparison

  Seenpin is in the Tesla Optimus supply chain and provides a reference related to linear actuators; Hengli Hydraulic corresponds to planetary roller screw products for humanoid robot customers.

  Risks

  Gross margins across different products, customers, and mass-production stages may not be fully comparable.

Key data

• Current priceRmb107.420As of 15:00 on July 23, 2026.
• Target priceRmb160.000Based on 50x 2027E P/E.
• Expected share price return48.9%Expected share price return implied by the target price relative to the current price.
• Expected dividend yield0.6%Expected dividend yield disclosed in the table.
• Expected total return49.6%Share price return plus dividend yield.
• Market capitalizationRmb144,031M / US$21,266MDisclosed in the report table.
• Ball screw and linear guide ordersRmb500mn YTDManagement recently indicated that related orders have reached about Rmb500mn year to date.
• 2026 revenue guidanceRmb300mnThe report believes current guidance may be exceeded.
• Per-station value content for battery swap stations约Rmb50kManagement's estimate of ball screw and linear guide value content per CATL battery swap station.
• Seenpin physical AI linear actuator gross margin62.4% / 70.3% / 59.5%Corresponding to 2023/2024/2025, respectively.

Impact & implications

If the order and margin thesis plays out, Hengli Hydraulic's growth drivers will expand from its traditional core hydraulics business into precision transmission and humanoid robot components, and it may receive a higher valuation multiple. From an investment perspective, the report emphasizes that the market may be underestimating the revenue elasticity and gross margin contribution of the ball screw, linear guide, and planetary roller screw businesses.

Risks

• Weaker-than-expected demand for construction machinery and non-construction machinery components.
• Profitability in the ball screw business and the Mexico plant may be weaker than expected due to insufficient production economies of scale.
• Gross margin improvement from favorable product mix changes may be lower than expected.
• Humanoid robot-related demand, customer volume ramp, or product certification progress may fall short of market expectations.
• The supply-chain read-through is based on peer and Seenpin disclosures; if external supply-demand or gross margin references become invalid, the valuation re-rating thesis may weaken.

What to watch

• Whether 2026 revenue for ball screws and linear guides is revised up and exceeds the Rmb300mn guidance.
• The pace and gross margin of converting the Rmb500mn YTD orders into recognized revenue.
• Whether THK's FY2026 Q2 results and operating profit guidance are revised upward as expected.
• Whether delivery lead times for ball screws and linear guides in China remain tight.
• CATL battery swap station construction pace and realization of per-station transmission component value content.
• Progress in Hengli Hydraulic launching non-magnetic, highly corrosion-resistant, or high-speed ball screw/linear guide products for the semiconductor industry in 2027.
• Planetary roller screw orders, mass-production progress, and gross margin performance from humanoid robot customers.