Shenwan Hongyuan Research: Maintains a "buy" rating on Hengli Hydraulic, and the cycle of construction machinery is reversing.

Shenwan Hongyuan Research Report pointed out that Hengli Hydraulic's net profit attributable to mother in 2018 was 2.509 billion, an increase of 0.40% year-on-year; the net profit attributable to mother in the first quarter of 2019 was 0.618 billion, an increase of 2.61% year-on-year, and the performance was in line with our expectations. The demand for excavator industry has bottomed out, and pump valve products and overseas markets have performed better. New products and technologies continue to break through, and ball screw products have entered the mass production stage. Considering the reversal of the construction machinery cycle and the company's new products expected to open up long-term growth space, coupled with the company's valuation range, the "buy" rating is maintained.