Group 1 - JPMorgan Chase & Co. reduced its stake in Sany Heavy Industry (06031.HK) by selling 457,500 shares at an average price of HKD 24.2006 per share, amounting to approximately HKD 11.072 million [2] - Following the reduction, JPMorgan's total holdings in Sany Heavy Industry decreased to 79,245,999 shares, representing a reduction in ownership from 11.06% to 10.99% [2]

Group 1 - JPMorgan Chase & Co. reduced its holdings in SANY Heavy Industry (06031.HK) by 457,492 shares at an average price of HKD 24.2006 per share, amounting to approximately HKD 11.072 million [1] - After the reduction, JPMorgan's total holdings in SANY Heavy Industry are now 79,245,999 shares, representing a decrease in ownership percentage from 11.06% to 10.99% [1][3]

Group 1 - JPMorgan Chase & Co. reduced its stake in SANY Heavy Industry (06031.HK) by selling 457,492 shares at an average price of HKD 24.2006 per share, amounting to approximately HKD 11.072 million [1] - Following the sale, JPMorgan's total holdings in SANY Heavy Industry decreased to 79,245,999 shares, representing a reduction in ownership from 11.06% to 10.99% [1][2]

Core Viewpoint - Sany Heavy Industry Co., Ltd. has won a procurement project from Hudong Zhonghua Shipbuilding (Group) Co., Ltd. with a bid amount of 3.04 million yuan, as announced on January 19, 2026 [1][2] Financial Performance - In 2024, Sany Heavy Industry's operating revenue is projected to be 78.383 billion yuan, with a revenue growth rate of 5.90% and a net profit attributable to the parent company of 5.975 billion yuan, reflecting a net profit growth rate of 31.98% and a return on equity of 8.54% [1][2] - For the first half of 2025, the company reported an operating revenue of 44.780 billion yuan, with a revenue growth rate of 14.64% and a net profit attributable to the parent company of 5.216 billion yuan, indicating a net profit growth rate of 46.00% [1][2] Industry and Product Composition - The company operates in the industrial sector, primarily focusing on heavy construction machinery [1][2] - The main product composition for 2024 includes: excavators (38.75%), others (18.93%), concrete machinery (18.33%), cranes (16.73%), road machinery (3.83%), pile machinery (2.65%), and other businesses (0.78%) [1][2]

Core Viewpoint - The escalating trade tensions between the US and EU, particularly regarding tariffs on goods, are destabilizing global supply chains and creating opportunities for the Chinese construction machinery industry [1][9]. Group 1: Impact on European and American Markets - European manufacturers are facing direct impacts, with a projected 19% drop in sales for 2024, and the US being their largest export market, accounting for over 25% of their exports [4][11]. - The imposition of US tariffs could lead to a cost increase of 15% to 50% for European products, significantly reducing their competitiveness [4][11]. - Conversely, the EU's countermeasures will also raise sales and operational costs for American brands in Europe, indicating a mutual weakening of both markets [12]. Group 2: Opportunities for Chinese Construction Machinery - Chinese construction machinery is well-positioned with three key advantages: 1. Exceptional cost-performance ratio, particularly in the electrification sector, making it an attractive option for budget-conscious European customers [5][13]. 2. A robust compliance system that has been tested through multiple trade disputes, allowing Chinese firms to navigate regulatory challenges effectively [5][13]. 3. A deep localization strategy, with leading companies like XCMG and SANY establishing comprehensive value chains overseas, enhancing their responsiveness to local markets [5][13]. Group 3: Strategic Approaches - In Europe, the focus should be on targeting small to medium-sized rental companies and contractors most affected by the tariff conflict, while aligning with the EU's green infrastructure investment plans [6][14]. - In the US, opportunities may arise from market segments vacated by European brands due to rising costs, as well as from the potential for supply chain replacements, leveraging China's efficient component supply chains [6][14]. - Establishing a strong foothold in South America, particularly through Brazil's significant investment plans, is crucial for mitigating fluctuations in the US and European markets [6][14]. Group 4: Overall Market Dynamics - The current geopolitical tensions are not merely a chance for opportunistic gains but serve as a stress test for the global competitiveness and strategic resilience of the Chinese construction machinery sector [7][15]. - The market's vulnerabilities will favor well-prepared and capable entrants, as Chinese equipment with unmatched cost-performance and integrated service ecosystems can become the optimal solution for clients facing challenges [7][15].

Core Viewpoint - JPMorgan has reduced its stake in Sany Heavy Industry (600031) by selling 457,492 shares at an average price of HKD 24.2006 per share, totaling approximately HKD 11.0716 million, resulting in a new holding of about 79.246 million shares, representing 10.99% of the company [1] Group 1 - JPMorgan sold 457,492 shares of Sany Heavy Industry on January 14 [1] - The average selling price was HKD 24.2006 per share [1] - The total amount from the sale was approximately HKD 11.0716 million [1] Group 2 - After the reduction, JPMorgan's remaining shares in Sany Heavy Industry are approximately 79.246 million [1] - The new holding percentage is 10.99% [1]

Group 1 - The core point of the article is that JPMorgan has reduced its stake in Sany Heavy Industry by selling 457,492 shares at an average price of 24.2006 HKD per share, totaling approximately 11.0716 million HKD [1] - After the reduction, JPMorgan's remaining shareholding in Sany Heavy Industry is approximately 79.246 million shares, representing a holding percentage of 10.99% [1]

Investment Rating - The report maintains a "Recommended" rating for the mechanical industry, with a focus on mining equipment, AI devices, and consumables [1]. Core Insights - The mechanical industry is expected to enter a new recovery cycle driven by monetary and fiscal policies, with significant capital expenditure anticipated in mining due to rising prices of non-ferrous metals [6][8]. - The AI sector is experiencing rapid growth, leading to increased demand for high-performance servers, GPUs, and advanced PCBs, which are critical for AI applications [6][20]. - The report highlights key companies in various segments, including industrial control, robotics, machine tools, and testing industries, suggesting a broad range of investment opportunities [6][8]. Summary by Sections Industry Overview - The mechanical industry comprises 636 listed companies with a total market capitalization of approximately 70,956.73 billion yuan and a circulating market value of about 58,998.75 billion yuan [3]. Company Profit Forecasts and Valuations - Several companies are highlighted with strong profit forecasts and investment ratings, including: - Huichuan Technology (300124.SZ): EPS forecasted at 2.11 yuan for 2025, with a strong buy rating [2]. - Falan Technology (603966.SH): EPS forecasted at 0.60 yuan for 2025, with a strong buy rating [2]. - Xinjie Electric (603416.SH): EPS forecasted at 1.83 yuan for 2025, with a strong buy rating [2]. - Other notable mentions include companies like Anhui Heli (600761.SH) and Sany Heavy Industry (600031.SH), both receiving strong buy ratings [2]. Market Performance - The mechanical sector has shown a positive performance with a 1.4% increase in the index, while the overall market performance varied across different indices [10][13]. - The 3C equipment segment experienced the highest growth at 14.4%, indicating strong demand in this area [11]. Investment Recommendations - The report suggests focusing on companies that are well-positioned to benefit from the AI wave, such as: - Dingtai High-Tech and Zhongtung High-Tech in the consumables sector [20][21]. - Dazhu CNC and Xinqi Micro-Assembly in the equipment sector [20]. - The report emphasizes the importance of high-end equipment and consumables in the PCB market, projecting significant growth in this area [20][21]. Key Data Tracking - The report includes macroeconomic indicators and industry-specific data, such as the manufacturing PMI and fixed asset investment growth rates, which are crucial for understanding the industry's health [32][36].

Investment Rating - The SW Machinery Equipment Index increased by 1.91% during the week of January 12-16, 2026, ranking 5th among 31 primary industry categories [3][13]. - Year-to-date, the SW Machinery Equipment Index has risen by 7.40%, ranking 7th among the same categories, while the CSI 300 Index increased by 2.20% [16]. Core Insights - Emphasis on the potential of SpaceX's chain and 3D printing in rocket technology, with a significant increase in satellite frequency resource applications in China [5][23]. - The engineering machinery sector is expected to experience a major upward cycle, with December sales figures exceeding expectations for both domestic and export markets [5][24]. - The AI upgrade potential in CNC systems is highlighted, particularly with the domestic leader Huazhong CNC, which is positioned to leverage AI for performance improvements [5][24]. Summary by Sections Market Review - The SW Machinery Equipment Index's performance during the week and year-to-date is noted, with specific rankings against the CSI 300 Index [3][16]. Core Insights Update - The report discusses the advancements in 3D printing technology in the aerospace sector, the robust demand for engineering machinery, and the growth potential of AI in CNC systems [5][24]. Key Data Tracking - General machinery sector remains under pressure, while engineering machinery shows accelerated growth, and railway equipment maintains steady growth [25][35][45]. - The shipbuilding sector is experiencing a slowdown, while oil service equipment is stabilizing at the bottom [49][51]. Industry Dynamics - The report outlines significant developments in various sectors, including the successful launch of new technologies and projects in the general machinery and robotics fields [60][62][64].

Investment Rating - The report maintains an "Overweight" rating for the mechanical equipment industry [1] Core Insights - The report highlights three major investment opportunities in the mechanical equipment sector: the Belt and Road Initiative, demand recovery in Europe and the US, and the transition from capacity to technology export in high-end manufacturing [2][18] - Solid-state battery technology is accelerating, benefiting equipment manufacturers, with significant investments from leading companies like BYD and Gotion [3][20] - The humanoid robot sector is poised for growth with Tesla's Optimus V3 nearing mass production, indicating strong market potential for core suppliers [4][41] Summary by Sections Investment Recommendations - Recommended companies include: Northern Huachuang, Sany Heavy Industry, Zhongwei Company, Hengli Hydraulic, CIMC, Tuojing Technology, Haitai International, Bichu Electronics, Jingsheng Mechanical, and others [1][15] Mechanical Equipment Export - China’s foreign investment is growing rapidly, with a focus on the Belt and Road Initiative, which is driving demand for domestic equipment in resource-rich countries [2][18] - The report emphasizes the importance of high-quality targets with significant exposure to European and American markets, particularly in hand tools and forklifts [19] Lithium Battery Equipment - The solid-state battery industry is experiencing rapid industrialization, with key players accelerating their production capabilities [3][20] - Recommended companies in this sector include: Xian Dao Intelligent, Lian Ying Laser, and Hangke Technology [3][20] Humanoid Robots - The report notes that the release and mass production of Tesla's Optimus V3 will be a significant event for the industry, with a focus on core suppliers with high production certainty [4][41] - Recommended companies include: Hengli Hydraulic, Sanhua Intelligent Control, and Top Group [4][41] Forklift Industry - The report indicates a decline in domestic forklift sales but anticipates a recovery in 2026 due to low base effects and improving overseas market conditions [5][19] - Recommended companies include: Hangcha Group, Anhui Heli, and Zhongli [5][19] High-end Manufacturing Export - The report highlights the shift from capacity export to technology export, with a focus on light module equipment and lithium battery equipment [2][18] - Recommended companies include: certain HJT equipment leaders and Aotewei [20][39] Data Center and Liquid Cooling - The report discusses the emergence of liquid cooling technology as essential for data centers, driven by increasing power density and cooling demands [45] - Recommended companies in this sector include: Yingwei Technology and others [34][45]