Core Viewpoint - The report from Shenwan Hongyuan indicates a positive trend in the excavator market, with a projected sales increase of 13.9% year-on-year in November 2025, totaling 20,027 units sold, including 9,842 units domestically and 10,185 units for export [1] Domestic Market - Domestic excavator sales are expected to approach 120,000 units this year, showing significant growth potential compared to 290,000 units sold in 2020 [2] - The domestic sales in November 2025 reached 9,842 units, marking a year-on-year increase of 9.11% [1] - For the period from January to November 2025, total excavator sales amounted to 212,162 units, reflecting a year-on-year growth of 16.7% [1] Export Market - November 2025 saw monthly excavator sales exceed 10,000 units, with annual exports projected to surpass 110,000 units, potentially setting a historical record [2] - The export volume in November 2025 was 10,185 units, representing an 18.8% year-on-year increase [1] Construction Activity - The average working hours for major construction machinery in November 2025 were 84.2 hours, showing a year-on-year decline of 13% but a month-on-month increase of 4.08% [3] - The working rate for major construction machinery was 56.5%, down 12.1 percentage points year-on-year but up 1.5 percentage points month-on-month, indicating a less optimistic construction intensity [3] Infrastructure Investment - Infrastructure investment in China from January to October 2025 saw a slight decline of 0.1% year-on-year, with specific sectors like pipeline transportation and water transportation showing growth [4] - Real estate fixed asset investment totaled 7.36 trillion yuan, down 14.7% year-on-year, with new construction area declining by 19.8% [4] - However, there are signs of recovery in construction demand, as indicated by an increase in the utilization rate of tower cranes [4] Global Market Outlook - According to Off-Highway Research, a 2% decline in global construction machinery is expected in 2025, followed by a return to growth in 2026 [5] - The overseas market is anticipated to expand, driven by mining and infrastructure demand, supported by a declining interest rate environment and high mineral prices [5] Investment Recommendations - The engineering machinery sector is viewed positively for 2026, with key manufacturers to watch including SANY Heavy Industry, XCMG, Zoomlion, LiuGong, and Shantui [6] - In the components segment, companies like Hengli Hydraulic, Aidi Precision, Fushite, and Weiman Sealing are highlighted as important players [6]

Group 1: Robotics Industry - The U.S. government is focusing on the development of robotics, indicating that robotics technology is becoming a key frontier in U.S.-China competition, with potential for continued resonance between the two countries' industries [1] - The Trump administration's actions suggest a strategic elevation of the U.S. robotics industry, with domestic policies expected to follow suit [1] - U.S. companies are actively investing in the robotics sector, creating a closed loop of "model-simulation-hardware," while China's supply chain is accelerating the implementation of robotics in various scenarios [1] Group 2: Construction Machinery - In November, domestic excavator sales exceeded expectations, and exports maintained high growth rates despite a high base, indicating a strong overall fundamental outlook for the sector [2] - The upward trend in both domestic and international sales of construction machinery has been validated, with a focus on overseas markets where profits from exports account for about 70% of many companies [2] - The performance of companies in the construction machinery sector remains strong, with non-excavator domestic sales also showing significant growth [2] Group 3: Lithium Battery Equipment - The electrification of ships is expanding the application of lithium batteries into new scenarios, with a positive outlook for lithium battery equipment in the upcoming year [3] - The demand for lithium batteries is expected to increase as new technologies like solid-state and sodium-ion batteries emerge, enhancing the electrification rate across various sectors [3] - The mid-term acceptance of solid-state batteries is anticipated to be completed by the end of the year, leading to a new round of order tenders from leading battery manufacturers and vehicle manufacturers [3] Group 4: PCB Equipment - The PCB industry is experiencing a resurgence, characterized by high-end product development and factory establishment in Southeast Asia, which is driving the demand for PCB equipment upgrades [4] - Key segments of PCB equipment, such as drilling and plating, hold significant value and are critical for circuit board performance [4] - The industry is evolving towards higher layer counts and more precise wiring due to AI-driven advancements, necessitating improvements in processing technology [4] Group 5: Forklifts & Mobile Robots - Sales of large forklifts are maintaining growth, with domestic sales increasing by 5% to 16% and exports growing by 8% to 23% from July to October [5] - The industry is optimistic about the upward trend in demand for smart logistics and unmanned forklifts, with major companies launching intelligent logistics products in Q4 [5] Group 6: Recommended Companies in Machinery Sector - Key companies recommended include Hengli Hydraulic, Aibin Technology, LiuGong, XCMG, Jereh, Naipu Mining, SANY Heavy Industry, Zoomlion, Anhui Heli, Hangcha Group, Huace Testing, Shoucheng Holdings, Xian Dao Intelligent, Bozhong Precision, Haitai International, Yizhiming, Puyuan Precision Electronics, Zhongji United, and Maiwei Shares [6]

Investment Rating - The industry investment rating is "Positive" (maintained) [6] Core Views - In November 2025, total excavator sales reached 20,027 units, a year-on-year increase of 14%, with domestic sales up by 9% and exports up by 19% [2][3] - The total excavator sales from January to November 2025 amounted to 212,162 units, reflecting a 17% year-on-year growth, with domestic sales increasing by 19% and exports by 15% [2] - Loader sales in November 2025 totaled 11,419 units, marking a 32.1% year-on-year increase, with domestic sales rising by 29.4% and exports by 34.8% [3] - The recovery of the engineering machinery industry is characterized by three phases: increasing export market share, improving domestic demand, and the initiation of a replacement cycle [3][4] Summary by Sections Excavator Sales - November 2025 excavator sales were 20,027 units, up 14% year-on-year, with domestic sales at 9,842 units (up 9.1%) and exports at 10,185 units (up 18.8%) [2][3] - From January to November 2025, total excavator sales reached 212,162 units, a 17% increase year-on-year, with domestic sales at 108,187 units (up 19%) and exports at 103,975 units (up 15%) [2] Loader Sales - November 2025 loader sales were 11,419 units, a 32.1% year-on-year increase, with domestic sales at 5,671 units (up 29.4%) and exports at 5,748 units (up 34.8%) [3] - From January to November 2025, total loader sales reached 115,831 units, reflecting a 17.2% year-on-year growth, with domestic sales at 61,039 units (up 22.5%) and exports at 54,792 units (up 11.9%) [3] Market Dynamics - The engineering machinery industry is experiencing an increase in overseas market share, driven by the "Belt and Road" initiative and domestic demand for infrastructure and real estate [2][3] - The domestic replacement cycle is expected to gradually initiate, with projections indicating that 2025 will mark the start of this cycle, benefiting from demand in agriculture, forestry, and municipal projects [4][5] Company Developments - Major engineering machinery manufacturers are planning to list on the Hong Kong Stock Exchange, which will enhance their international brand influence and provide efficient financing channels [5] - Sany Heavy Industry's recent H-share listing raised approximately 13.3 billion HKD, indicating strong market interest [5]

Core Insights - The mining equipment industry is essential for the extraction and processing of solid raw materials, serving key sectors such as metallurgy, coal, construction, and chemical industries [5][9] - The global mining equipment market is projected to grow to 736.8 billion yuan in 2024, with excavating equipment accounting for 49.14%, transportation equipment for 30.72%, and auxiliary machinery for 20.14% [5][9] - By 2025, the market is expected to reach 775.9 billion yuan, with a slight shift in the share of equipment types [5][9] Market Size and Growth - The global mining equipment market is anticipated to grow significantly, with 2024 estimates at 736.8 billion yuan and 2025 estimates at 775.9 billion yuan [5][9] - In 2024, the North American market is expected to be 189.4 billion yuan, Europe at 145.7 billion yuan, and Asia at 289.4 billion yuan, with China contributing 16.69% [7][9] - By 2025, North America is projected to reach 197.3 billion yuan, Europe 151.7 billion yuan, and Asia 306.8 billion yuan, with China's share slightly increasing to 16.72% [7][9] Equipment Classification - Mining equipment can be categorized into three main types: excavating equipment (including mining excavators and drills), transportation equipment (such as dump trucks and conveyor systems), and auxiliary equipment (including drilling and crushing machinery) [3][5] Industry Trends - The demand for mining equipment is expected to rise due to advancements in mining technology and the implementation of "green" and "smart" mining strategies in China [9] - The increasing depth of mining operations necessitates more advanced equipment, indicating a growing market for mining machinery [9] Key Companies - Notable companies in the mining equipment sector include SANY Heavy Industry, Shandong Mining Machinery, and Caterpillar Inc., among others [5][9]

Summary of Key Points from the Conference Call Industry Overview - The conference call focuses on the **excavator industry** in China and its performance in both domestic and overseas markets, particularly looking ahead to **2026** [1][5][12]. Core Insights and Arguments - **Domestic Excavator Sales**: By the end of 2023, domestic excavator sales exceeded expectations with an actual growth rate of nearly **20%**. This surge is attributed to year-end rush work, improved funding availability, and inventory pressure from certain manufacturers [1][2][3]. - **Overseas Market Performance**: The overseas market also showed strong demand, with actual growth close to **20%**, surpassing initial forecasts of around **10%**. This was driven by similar factors as the domestic market [2][3]. - **Future Sales Projections**: For **2026**, domestic excavator sales are expected to continue growing, with small excavators projected to increase by **15%-20%** and medium to large excavators expected to achieve over **10%** growth, supported by central government special bonds for water conservancy projects [5][12]. - **International Market Dynamics**: The overseas market is anticipated to benefit from the U.S. interest rate cut cycle, which is expected to enhance economic activity. Regions like Africa, South America, and the Middle East are expected to see increased demand for mining equipment due to rich mineral resources and a favorable exchange rate for the dollar [6][8]. Additional Important Insights - **Market Share of Chinese Brands**: In 2024, major Chinese engineering machinery companies are projected to hold a market share of approximately **17%** in key categories like excavators and loaders. The new excavator market share is estimated to be between **25%-30%**, although revenue share is lower due to lower pricing compared to Western brands [3][9]. - **Impact of Used Equipment**: The used equipment market significantly influences the new machine market, especially in Africa where used machines account for **70%** of actual demand. This dynamic suggests that the real market share for new machines in Africa may only be around **10%** [10][11]. - **Competitive Landscape**: The competition among Chinese brands can be assessed by tracking the gross margin changes of second-tier brands like LiuGong, which have seen margins rise from **27%-28%** to **33%-34%** by Q3 2025. This indicates a competitive environment that could impact market share [11]. - **Valuation of Companies**: The engineering machinery sector is currently undervalued, with companies like SANY Heavy Industry trading at around **16 times** earnings, while others like LiuGong and XCMG are around **12 times**. This presents a significant investment opportunity given the expected market rebound [12][14]. Recommendations - **Investment Recommendations**: The preferred investment order includes SANY Heavy Industry and XCMG due to their high elasticity in an upward cycle. LiuGong and Zoomlion are also recommended, with specific attributes appealing to different investor strategies [14].

Group 1 - The core viewpoint of the articles highlights the collaboration between China Unicom and SANY Heavy Industry to leverage 5G and UWB technologies for enhancing manufacturing efficiency and precision in the heavy machinery sector [1][3][5] - The partnership aims to create a 5G+UWB integrated positioning system that enables visual management of personnel, vehicles, and materials within the factory, thereby improving production processes [1][3] - The implementation of AI-driven models for material utilization and automated scheduling in production processes is expected to optimize resource management and enhance operational efficiency [5][7] Group 2 - The strategic cooperation between China Unicom and SANY has evolved since 2019, with significant milestones including the establishment of a 5G industrial internet innovation center and the successful deployment of a 5G private network at SANY's Beijing facility [3][7] - The 5G+UWB positioning technology is noted for its high precision and cost-effectiveness, making it suitable for various industrial environments, thus addressing specific production challenges faced by SANY [3][5] - Future plans include expanding the collaboration to encompass AI model development and further integration of digital transformation strategies, aiming to set new benchmarks in the manufacturing and telecommunications sectors [7]

Investment Rating - The industry investment rating is "Overweight," indicating a positive outlook for the engineering machinery sector [4]. Core Insights - The report highlights strong domestic and export sales of excavators, with November 2025 sales reaching 20,027 units, a year-on-year increase of 13.9%. Domestic sales were 9,842 units (up 9.11%), while exports were 10,185 units (up 18.8%) [1]. - For the first eleven months of 2025, total excavator sales reached 212,162 units, reflecting a 16.7% year-on-year growth, with domestic sales at 108,187 units (up 18.6%) and exports at 103,975 units (up 14.9%) [1]. - The report notes that the construction intensity in China remains weak, with average working hours for major construction machinery at 84.2 hours in November, down 13% year-on-year [4]. - Infrastructure investment in China has shown stability, with a slight decline of 0.1% year-on-year from January to October 2025, while real estate fixed asset investment decreased by 14.7% [4]. - The report anticipates a rebound in construction demand, as indicated by an increase in the utilization rate of construction cranes in November [4]. - The global engineering machinery market is expected to expand, supported by a decline in interest rates and sustained high mineral prices, with a projected 2% decline in 2025 followed by positive growth in 2026 [4]. - The report identifies key companies to watch in the sector, including SANY Heavy Industry, XCMG, Zoomlion, LiuGong, and Shantui, as well as component manufacturers like Hengli Hydraulic and Aidi Precision [4]. Summary by Sections Domestic Sales - Excavator sales in November 2025 reached 9,842 units, a 9.11% increase year-on-year, contributing to a total of 108,187 units sold domestically from January to November, marking an 18.6% increase [1]. Export Sales - November 2025 saw exports of excavators exceed 10,000 units for the month, with a total of 103,975 units exported from January to November, reflecting a 14.9% increase [1]. Construction Activity - The average working hours for major construction machinery were reported at 84.2 hours in November, a decrease of 13% year-on-year, indicating weak construction activity [4]. Infrastructure Investment - Infrastructure investment in China showed a slight decline of 0.1% year-on-year from January to October 2025, with specific sectors like pipeline transportation and water transportation showing growth [4]. Market Outlook - The global engineering machinery market is projected to face a 2% decline in 2025, with expectations of recovery in 2026, driven by mining and infrastructure demand [4]. Key Companies - The report highlights several key players in the engineering machinery sector, including SANY Heavy Industry, XCMG, and Zoomlion, as well as component manufacturers like Hengli Hydraulic and Aidi Precision [4].

Investment Rating - The report maintains an "Overweight" rating for the engineering machinery industry, indicating a positive outlook for the sector [1]. Core Insights - November sales of excavators reached 20,027 units, a year-on-year increase of 13.9%, with domestic sales at 9,842 units (up 9.11%) and exports at 10,185 units (up 18.8%) [1]. - For the first eleven months of 2025, total excavator sales were 212,162 units, reflecting a 16.7% year-on-year growth, with domestic sales at 108,187 units (up 18.6%) and exports at 103,975 units (up 14.9%) [1]. - The average working hours for major engineering machinery products in November 2025 were 84.2 hours, a decrease of 13% year-on-year, while the operating rate was 56.5%, down 12.1 percentage points year-on-year [4]. - Infrastructure investment in China showed stability, with a slight decline of 0.1% year-on-year from January to October 2025, while real estate fixed asset investment dropped by 14.7% [4]. - The global engineering machinery market is expected to see a rebound in 2026, supported by a decline in interest rates and sustained high mineral prices [4]. - Key companies to watch in the sector include SANY Heavy Industry, XCMG, Zoomlion, LiuGong, and Shantui, with component manufacturers like Hengli Hydraulic and Aidi Precision also highlighted [4]. Summary by Sections Sales Performance - November excavator sales reached 20,027 units, with domestic and export sales showing significant growth [1]. - Year-to-date sales for 2025 indicate a strong upward trend in the market [1]. Market Conditions - Domestic construction activity remains subdued, as indicated by lower working hours and operating rates for machinery [4]. - Infrastructure investment is stable, while real estate construction demand shows signs of bottoming out [4]. Future Outlook - The engineering machinery sector is expected to benefit from a favorable global market environment in 2026 [4]. - Key players in the industry are positioned for growth, with specific companies identified for potential investment opportunities [4].

Investment Rating - The investment rating for the engineering machinery industry is "Recommended" (maintained) [5] Core Viewpoints - The report highlights significant structural growth characteristics, with high-end products and exports being the core driving forces for the machine tool sector [4] - In November 2025, excavator sales reached 20,027 units, a year-on-year increase of 13.9%, with domestic sales at 9,842 units (up 9.11%) and exports at 10,185 units (up 18.8%) [8] - For the period from January to November 2025, a total of 212,162 excavators were sold, marking a 16.7% year-on-year increase, with domestic sales at 108,187 units (up 18.6%) and exports at 103,975 units (up 14.9%) [8] - Loader sales in November 2025 reached 11,419 units, a year-on-year increase of 32.1%, with domestic sales at 5,671 units (up 29.4%) and exports at 5,748 units (up 34.8%) [8] - The report indicates a strong domestic replacement demand for engineering machinery, driven by equipment renewal policies, and a rapid growth in exports with an improving structure [8] - The "Belt and Road" initiative regions are experiencing industrialization and infrastructure growth, while the North American market is expected to recover due to a rate cut cycle and replenishment demand [8] - The European market shows signs of marginal improvement after two years of decline, and Chinese brands have significant growth potential in the European and American markets due to low penetration rates [8] - Electrification and intelligence are opening new growth curves, enhancing both volume and pricing, while also broadening application scenarios [8] - Leading companies are expected to continue increasing their market share overseas, supported by technological upgrades and global expansion strategies [8] Summary by Sections - **Excavator Sales Data**: November 2025 saw excavator sales of 20,027 units, with a 13.9% year-on-year increase. Year-to-date sales reached 212,162 units, up 16.7% [8] - **Loader Sales Data**: November 2025 loader sales were 11,419 units, a 32.1% increase year-on-year, with year-to-date sales at 115,831 units, up 17.2% [8] - **Investment Recommendations**: The report suggests focusing on leading companies with a well-established global presence, including XCMG (000425.SZ), SANY Heavy Industry (600031.SH), LiuGong (000528.SZ), Shantui (000680.SZ), Hengli Hydraulic (601100.SH), and Zhongji United (605305.SH) [8]

Investment Rating - The report maintains an investment rating of "Recommended" for the mechanical equipment industry [2][3]. Core Views - The mechanical equipment industry saw a 2.9% increase last week, ranking second among 31 primary industries. Sub-industries such as engineering machinery (+6%) and specialized equipment (+3.45%) showed strong performance, while rail transit equipment experienced a decline of 0.82% [3][14]. - The report suggests that with the completion of the third-quarter reports, market risk appetite is expected to improve. It recommends a balanced approach between technology growth and cyclical investments, focusing on sectors and stocks with performance support [3][4]. - Key areas of focus include humanoid robots, PCB equipment, semiconductor equipment, and cyclical recovery in engineering machinery and general equipment [3][4]. Summary by Sections 1. Recent Trends - In November 2025, excavator sales reached 20,027 units, a year-on-year increase of 13.9%. Domestic sales were 9,842 units (+9.11%), while exports were 10,185 units (+18.8%). Cumulatively, from January to November, 212,162 excavators were sold, marking a 16.7% increase year-on-year [5][44]. - The report highlights a structural recovery in the industry, driven by domestic demand from large projects and a new round of replacement cycles [5][44]. 2. Sub-Industry Performance - The engineering machinery sector is experiencing a significant recovery, with excavator sales showing strong growth. The report emphasizes the importance of technological upgrades and global expansion for leading companies [5][44]. - The industrial robot sector saw a production increase of 17.9% in October 2025, indicating potential investment opportunities as the industry adjusts to new demands [28][44]. 3. Key Companies and Recommendations - The report identifies several companies for investment consideration, including XCMG Machinery (000425.SZ), SANY Heavy Industry (600031.SH), and Huazhong CNC (688697.SH), which are expected to benefit from the ongoing recovery and technological advancements in the industry [7][44]. - The semiconductor equipment sector is highlighted as a critical area for investment, with companies like North Huachuang (002371.SZ) and Zhongwei Company (688012.SH) recommended due to their strong market positions and growth potential [4][7]. 4. Policy and Market Drivers - The report notes that government policies are strongly supporting the high-end machine tool sector, with initiatives aimed at accelerating domestic production and technological breakthroughs [5][46]. - The global demand for high-end manufacturing is recovering, as indicated by Japan's machine tool orders, which have seen continuous growth driven by exports [5][46].