In our 2026 sector outlook published today (link), we highlight large-size miningmachinery in overseas as well as emerging markets as key growth areas in2026E. In China, we see an early stage of recovery for crane machinery andan ongoing upcycle for earth-moving machinery. We believe Zoomlion will fullybenefit from all these themes given its full range of product offerings, emergingmarket focus and expansion of global capacity. Moreover, Zoomlion hasalready launched 3 types of humanoid robots (currently performing tasks infactories) and is on track to achieve mass production. We revise up our 2025E-27E earnings forecast by 12-15%, to reflect our new industry salesassumptions (but humanoid robots not modelled yet). Our TP for Zoomlion A/His revised up to RMB12.0/HK$9.2, based on 2026E target P/E multiple of 18.6xfor A-share and 30% discount for H-share. Reiterate BUY.

Valuation for Zoomlion-A. We roll over our target valuation to 2026E,based on 18.6x P/E, to reach our new TP for A-share of RMB12 (previouslyRMB9.9). Our target P/E (previously 19.5x) is based on the five-yearaverage historical P/E of 13.7x plus 1SD. Our above-average targetmultiple is to reflect Zoomlion’s emerging market expansion story with fullrange of product offerings.

Valuation for Zoomlion-H. Our new TP for H-share (HK$9.2) is based ona 30% H/A discount (based on historical average).

Key risks: (1) lack of sustainable recovery of non-earth-moving machinerydemand in China; (2) slowdown of overseas demand; (3) decline in miningcapex.