Investment Rating - The investment rating for the company is "Buy" (maintained) [7] Core Views - The report emphasizes that "A New Era, New SANY" is set to begin, with the engineering machinery industry experiencing upward resonance both domestically and internationally, positioning the leading Chinese engineering machinery company for global expansion [1] - The company is identified as one of the most elastic stocks in terms of performance during the excavator cycle, with a significant portion of its revenue derived from excavators [4][11] - The report highlights the ongoing globalization strategy of the company, with international revenue and gross profit showing substantial growth [4][11] Industry Overview - The engineering machinery industry is experiencing a cyclical reversal, with both domestic and international markets showing positive trends. The global market size for engineering machinery is projected to reach $213.5 billion in 2024 and $296.1 billion by 2030, with a CAGR of 6% from 2024 to 2030 [2] - The domestic excavator market is expected to see a gradual recovery, driven by demand from agriculture, forestry, and municipal projects, with total excavator sales projected to reach 235,257 units in 2025, a 17% increase year-on-year [2][18] - The company is benefiting from increased market share overseas, particularly in emerging markets in Asia, Africa, and Latin America, which are experiencing industrialization and urbanization [3][11] Company Performance - The company’s excavator revenue accounted for 39% of its total revenue in the first half of 2025, indicating strong potential for performance elasticity as the excavator industry enters an upward cycle [4][27] - The company’s international revenue and gross profit represented 60% and 68% of its main business revenue and gross profit, respectively, in the first half of 2025, with year-on-year growth of 12% and 10% [4][28] - The successful listing of H-shares is expected to further advance the company's globalization strategy, with net proceeds from the offering allocated to expanding global sales and service networks, enhancing R&D capabilities, and optimizing production efficiency [5][23] Financial Forecast - The company is projected to achieve a net profit attributable to shareholders of 8.51 billion, 11.04 billion, and 14.12 billion yuan for the years 2025, 2026, and 2027, respectively, representing year-on-year growth rates of 42%, 30%, and 28% [13][15]

Group 1 - The heavy machinery stocks in Hong Kong experienced a significant rise, with Senson International increasing by over 9% and Sany Heavy Industry reaching a new high with a 2.2% increase [1] - The engineering machinery industry is expected to maintain stable orders until mid-January 2026, with clear market expectations for a sales peak after the Spring Festival [1] - Leading manufacturers such as XCMG, Sany Heavy Industry, Zoomlion, and LiuGong are prioritizing overseas market capacity expansion as a core task for the coming year [1] Group 2 - Since 2025, the domestic engineering machinery sector has entered an upward cycle, driven by equipment renewal demand and construction progress, leading to increased excavator sales and continued positive growth in non-excavator products [1] - Analysts suggest that in the context of global loose fiscal and monetary policies, the theme of going overseas is likely to become a popular annual trend, with the engineering machinery sector benefiting significantly from this logic [1] - Currently, leading companies in the engineering machinery sector have an overseas profit contribution ratio of over 70%, and the sector is expected to benefit from potential catalysts such as future interest rate cuts by the Federal Reserve [1]

港股重型机械股拉升上扬，其中，森松国际大涨超9%，三一重工涨2.2%盘中刷新上市新高价，中联重 科、三一国际涨约2%。 本文源自：金融界AI电报 ...

Group 1 - Heavy machinery stocks in Hong Kong have surged, with Senson International rising over 9% and Sany Heavy Industry increasing by 2.2%, reaching a new high during trading [1] - The engineering machinery industry has maintained stable orders in the first half of January 2026, with expectations for a sales peak after the Spring Festival [1] - Leading manufacturers such as XCMG, Sany Heavy Industry, Zoomlion, and LiuGong are prioritizing overseas market capacity expansion as a core task for next year [1] Group 2 - Since 2025, a domestic upcycle in engineering machinery has begun, driven by equipment renewal demand and construction progress, leading to increased excavator sales and continued positive growth in non-excavator products [1] - Analysts suggest that under the backdrop of global loose fiscal and monetary policies, the theme of going overseas is expected to become a popular annual trend, with engineering machinery benefiting significantly from this logic [1] - Currently, leading companies in the sector have an overseas profit contribution ratio of over 70%, and the engineering machinery sector is likely to benefit from potential catalysts such as future interest rate cuts by the Federal Reserve [1]

这绝非一次简单的经贸之旅，而是在国家加快构建新发展格局的宏伟战略下，一座长江中游地区中心城 市主动抓住向上发展"关键变量"的战略行动，旨在将香港这一国际顶级枢纽的变量效应，全面转化为长 沙高质量发展的增量与胜势。 长沙晚报全媒体评论员 山丘 2026年的发展画卷徐徐展开，1月20日至22日，省委常委、市委书记吴桂英率长沙市代表团以香港为"十 五五"开局出访首站，开展招商引资与招才引智活动。 顺应时势的区域协同 长沙与香港隔山望海，但情谊深远。历经岁月沉淀的互信与共赢，为此次新年首访奠定了坚实基础。 香港不仅是长沙"走出去"与"引进来"的超级桥梁，更是休戚与共的发展合伙人。数据显示，香港是长沙 最重要的经贸伙伴，全市港资企业达679家，占外资企业总量的46.6%。从耸立星城的九龙仓国金中 心，到联通全球的玉湖冷链，港资项目已成为长沙名片；而中联重科、蓝思科技等长沙龙头企业，也借 助香港平台成功扬帆远航。近30万在港湘籍乡亲和校友，更是两地割舍不断的血脉纽带。 此次出访统筹推进招商引资与招才引智，既有合作成果的巩固，更是顺应时势，使香港从"重要伙伴"升 维为能够系统性助力长沙突破内陆局限的"战略支点"。 城市跃升 ...

Core Viewpoint - The report highlights the significant inflow of main capital into various stocks, with specific companies showing remarkable performance in terms of net capital inflow and stock price changes [1][2]. Group 1: Main Capital Inflow - A total of 88 stocks have experienced a net inflow of main capital for five consecutive days or more, indicating strong investor interest [1]. - Hangzhou Bank leads with 16 consecutive days of net inflow, followed by Yunnan Baiyao with 14 days [1]. - Midea Group has the highest total net inflow amounting to 1.582 billion yuan over seven days, while Hangzhou Bank follows closely with 1.489 billion yuan over 16 days [1]. Group 2: Performance Metrics - The stock with the highest net inflow ratio relative to trading volume is Fenglong Co., which has surged by 359.76% over the past 16 days [1]. - Other notable stocks include Guotai Junan Securities with a net inflow of 1.109 billion yuan over 11 days and China Ping An with 1.074 billion yuan over six days, although their stock prices have seen declines of 2.46% and 3.28% respectively [1]. - The report includes a detailed table of stocks with their respective net inflow amounts, inflow ratios, and cumulative price changes, providing a comprehensive overview of market trends [1][2].

Investment Rating - The report maintains a "Buy" rating for the machinery industry, indicating a positive outlook for investment returns over the next 6-12 months [1]. Core Insights - The domestic sales of excavators continued to grow in December 2025, with a significant recovery in non-excavator categories. The total excavator sales (including exports) reached 23,095 units, a year-on-year increase of 19.2%, with domestic sales at 10,331 units, up 10.9% [3][4]. - The report highlights a robust recovery in the demand for construction machinery driven by ongoing infrastructure investments and the replacement cycle of machinery, projecting a compound growth rate of around 30% for replacement demand in the coming years [4][5]. - The export of excavators also showed strong growth, with December 2025 exports reaching 12,764 units, a 26.9% increase year-on-year, and total export value for the year at $64.2 billion, up 27.2% [6][10]. Summary by Sections Domestic Sales Performance - In December 2025, excavator sales reached 23,095 units, with domestic sales at 10,331 units, reflecting a 19.2% and 10.9% year-on-year growth respectively. For the entire year, total excavator sales were 235,257 units, up 17.0%, and domestic sales were 118,518 units, up 17.9% [3][14]. - Non-excavator machinery categories also saw significant growth, with loader sales increasing by 30.0% and motor grader sales by 14.0% in December 2025 [14]. Export Performance - The report notes that excavator exports in December 2025 reached 12,764 units, marking a 26.9% increase year-on-year, with total annual exports at 116,739 units, up 16.1% [6][14]. - The total export value of construction machinery for December 2025 was $64.2 billion, a 27.2% increase, with the annual total at $601.7 billion, up 13.8% [6]. Future Demand Drivers - The report emphasizes that active fiscal policies are expected to stimulate infrastructure investment, ensuring sustained demand for construction machinery in the medium term [5]. - The commencement of the Yaxia Hydropower Project, with an estimated investment of approximately 1.2 trillion yuan, is projected to significantly boost machinery demand, with equipment needs potentially reaching 120 to 180 billion yuan [9][10]. Electric and Intelligent Machinery Trends - Electric loader sales surged by 218.7% in December 2025, with an electricization rate of 22.2%, indicating a strong trend towards electrification in the machinery sector [7]. - The report also highlights the growth potential in the forklift market, driven by advancements in robotics and artificial intelligence, with a projected 39.3% increase in sales of unmanned forklifts in 2025 [8]. Investment Recommendations - The report recommends several leading manufacturers, including SANY Heavy Industry, XCMG, and Zoomlion, as well as component suppliers like Hengli Hydraulic, indicating a favorable long-term outlook for these companies [10].

Summary of China Industrials 2026 Outlook Industry Overview - **Industry**: China Industrials - **Core Themes**: AI technology diffusion, industrial upgrades, and globalization are central to the industrial sector's recovery in 2026. The government is focused on enhancing productivity through equipment upgrades, particularly in high-end equipment [1][4]. Key Insights - **Industrial Cycle**: The industrial cycle is characterized by strong global demand for capital goods, driven by AI technology applications and supply chain security concerns. China's trend of localizing high-end equipment remains strong, with specific sectors like data centers, electronics, and robotics expected to show growth, while processing markets may experience muted demand [3][10]. - **AI Applications**: 2026 is anticipated to mark the beginning of significant capital expenditure on physical AI, which will benefit automation and robotics companies. The government is supporting this through initiatives aimed at increasing the deployment of AI-powered robotics [4][11][12]. - **Localization and Supply Chain**: The localization rates for automation and industrial robots are projected to rise, with expectations of reaching 60-70% by 2030. This trend is expected to benefit companies involved in automation and precision components [21][22][23]. Market Dynamics - **Overseas Expansion**: Equipment exports from China have grown significantly, outpacing overall export growth. Companies are motivated to expand into international markets to capture larger total addressable markets (TAM) and improve margins [24][25]. - **Margin Expansion**: The overall net margin for China's industrials is expected to increase from approximately 13.0% in 2025 to around 14.6% in 2027, driven by overseas growth and advancements in AI technology [26][27]. Stock Recommendations - **Preferred Stocks**: The report highlights several stocks that are expected to benefit from cyclical strength and structural tailwinds, including: - **Geekplus (2590.HK)**: OW - **Sany Heavy (600031.SS)**: OW - **Leaderdrive (688017.SS)**: OW - **Han's Laser (002008.SZ)**: OW - **Inovance (300124.SZ)**: OW - **Hengli (601100.SS)**: OW - **Wuxi Lead (300450.SZ)**: OW - **Envicool (002837.SZ)**: OW - **Underweight Stocks**: Stocks such as **CSCEC (601668.SS)**, **CRRC-H (1766.HK)**, and **Maxwell (300751.SZ)** are rated as underweight due to various market challenges [5][8][46]. Additional Considerations - **Geopolitical Factors**: The geopolitical landscape is influencing supply chain security, which is a critical factor for capital goods demand globally [3]. - **Investment in AI**: The anticipated investment in AI infrastructure is expected to redefine smart manufacturing and create new opportunities within the industrial sector [10][11]. - **Sector Performance**: The report indicates that most industrial stocks are trading at or above their historical five-year average P/E ratios, reflecting a positive outlook for continuous upgrades and AI-related demand [26][38]. This comprehensive analysis provides insights into the expected recovery and growth opportunities within the China Industrials sector for 2026, highlighting key themes, market dynamics, and stock recommendations.

Investment Rating - The report maintains a "Buy" rating for the mechanical equipment sector, indicating a positive outlook for the industry [6]. Core Insights - The low-altitude economy is experiencing significant growth, with the Guangdong-Hong Kong-Macao Greater Bay Area set to add 801 new low-altitude takeoff and landing points by 2025, and a logistics drone route network of 310 lines, showcasing a market potential of over one trillion yuan [3]. - The mechanical equipment sector shows strong competitive advantages for domestic leading companies, with forklift sales in December 2025 reaching 111,363 units, a slight year-on-year increase of 0.03%, while exports grew by 7.97% [3]. - The engineering machinery industry is expected to maintain steady growth, with total forklift sales in 2025 projected to be 1,451,768 units, a year-on-year increase of 12.9% [3]. Weekly Market Review - From January 11 to January 16, 2026, the Shanghai Composite Index fell by 0.45%, while the Shenzhen Component Index and the ChiNext Index rose by 1.14% and 1.00%, respectively. The Shenwan Mechanical Equipment Index increased by 1.91%, outperforming the CSI 300 Index by 2.48 percentage points, ranking fifth among 31 Shenwan first-level industries [2][11]. - Sub-sectors within mechanical equipment saw varied performance, with general equipment up by 3.11%, automation equipment up by 4.19%, while engineering machinery and rail transit equipment saw declines of 0.88% and 1.81%, respectively [11]. Key Sector Tracking - The low-altitude economy is supported by the timely establishment of safety standards, such as the Civil Unmanned Aerial Vehicle Parachute System Specification, which aims to enhance operational safety for drones in densely populated areas [3]. - The report highlights the competitive landscape for domestic leading companies in the mechanical equipment sector, emphasizing their strong position in both supply and demand [3]. Investment Recommendations - For the low-altitude economy, recommended companies include Deep City Transportation, Sujiao Science and Technology, and Huasheng Group, among others [4]. - In the mechanical equipment sector, recommended companies include Sany Heavy Industry, XCMG, and Anhui Heli for engineering machinery, and Juxing Technology and Quanfeng Holdings for the export chain [4].

Investment Rating - The report maintains a "Recommended" investment rating for the mechanical industry, indicating a positive outlook for the sector [6]. Core Insights - The low-altitude economy is experiencing significant growth, with the Guangdong-Hong Kong-Macao Greater Bay Area set to add 801 new low-altitude takeoff and landing points by 2025, and a logistics drone route network of 310 lines, showcasing a market potential of over one trillion [3]. - The mechanical equipment sector is expected to maintain steady growth, supported by strong competitive advantages of domestic leading enterprises in both supply and demand [3]. - In December 2025, forklift sales reached 111,363 units, a slight year-on-year increase of 0.03%, with exports growing by 7.97% to 47,556 units [3]. Weekly Market Review - From January 11 to January 16, 2026, the Shanghai Composite Index fell by 0.45%, while the Shenzhen Component Index and the ChiNext Index rose by 1.14% and 1.00%, respectively. The Shenwan Mechanical Equipment Index increased by 1.91%, outperforming the CSI 300 Index by 2.48 percentage points, ranking fifth among 31 Shenwan first-level industries [11]. - Sub-sectors such as general equipment and automation equipment saw increases of 3.11% and 4.19%, respectively, while engineering machinery and rail transit equipment experienced declines of 0.88% and 1.81% [11]. Key Sector Tracking - The report highlights the low-altitude economy's rapid development alongside the establishment of critical safety standards, which are essential for the sustainable growth of the sector [3]. - The mechanical equipment sector's export chain remains robust, with a year-on-year growth of 13.4% in exports for 2025, indicating a positive trend for future growth [3]. Investment Recommendations - For the low-altitude economy, recommended companies include Deep City Transportation, Sujiao Science and Technology, and Wan Feng Aowei [4]. - In the mechanical equipment sector, recommended companies include Sany Heavy Industry, XCMG, and Anhui Heli for engineering machinery, and Giant Star Technology and Quan Feng Holdings for the export chain [4].