Core Viewpoint - The announcement of the first batch of 15 leading smart factories marks a significant leap in China's manufacturing sector from digitization and networking to a new stage characterized by deep applications of artificial intelligence, representing the highest level of intelligent manufacturing in the country [1][3][21]. Group 1: Overview of Leading Smart Factories - The first batch of leading smart factories includes companies from key industries such as equipment manufacturing, raw materials, and electronic information, showcasing the breadth and depth of China's intelligent manufacturing development [1][19]. - The 15 selected factories are distributed across 10 provinces and regions, including Shanghai, Jiangsu, Zhejiang, Shandong, and Hubei, reflecting a "multi-point breakthrough and full coverage" layout [2][20]. Group 2: Characteristics of Leading Smart Factories - Leading smart factories integrate advanced manufacturing technologies, next-generation information technologies, and lean management concepts, taking on the responsibility of exploring future manufacturing models [3][21]. - To qualify as a leading smart factory, six key elements are required: industry leadership, AI technology application leadership, innovative smart manufacturing model leadership, performance leadership, replication leadership, and nurturing plan leadership [6][24]. Group 3: Case Studies of Selected Companies - Changfei Fiber Optic has become a benchmark in the electronic information sector by integrating AI algorithms throughout its production process, achieving a drawing speed of 3,500 meters per minute with micro-level precision control [9][27]. - Weichai Power has implemented a digital and intelligent management system that reduces customer maintenance costs by an average of 30% through remote diagnostics and alerts for every engine sold [30]. - Baosteel is innovating with an AI-driven predictive manufacturing model that anticipates market demand, optimizing the entire supply chain and production process, with plans to establish 1,200 AI scenarios and 25 benchmark production lines by 2027 [14][34]. Group 4: Future Directions and Strategic Goals - The development of leading smart factories aligns with national strategies to promote intelligent, green, and service-oriented manufacturing, aiming to enhance China's position in the global supply chain [34][35]. - The exploration of future manufacturing models focuses on achieving high customization, complex production, and maintaining high efficiency, low costs, and high quality [28][36].

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].

Core Viewpoint - The launch of the first customized China-Europe freight train by Zoomlion from Changsha marks a significant step in enhancing international logistics channels and supporting local high-end equipment manufacturing in the context of the "14th Five-Year Plan" [1][3]. Group 1: Logistics and Transportation - The China-Europe freight train (Changsha) is a response to the "14th Five-Year Plan" and aims to implement the strategies of "Manufacturing Power" and "Transportation Power" [3]. - The train provides a comprehensive "end-to-end, door-to-door" customized international logistics solution, including transportation organization, customs coordination, and overseas distribution [3]. - The train will transport high-end engineering machinery equipment over more than ten days and thousands of kilometers to its destination, enhancing the timeliness and stability of cross-border transport for major equipment [3][4]. Group 2: Collaboration and Support - The successful operation of the freight train is attributed to the collaboration among local government logistics offices, customs, and railway departments [3]. - Changsha Customs provides 24/7 customs clearance and emergency support services, guiding companies to use efficient declaration methods to expedite cargo passage [3]. - The coordinated efforts have optimized services, creating a "fast track" for customs clearance for Hunan manufacturing [3]. Group 3: Future Outlook - The China-Europe freight train (Changsha) aims to deepen cooperation with local manufacturing enterprises, expand its route network, and optimize service functions during the "14th Five-Year Plan" [4]. - By 2025, the freight train is expected to operate 1,037 trains, maintaining a scale of over 1,000 trains for five consecutive years, ranking among the top in the country [4].

Report Industry Investment Rating No relevant content provided. Core Viewpoints of the Report - The Yaxia Hydropower Project, with an expected investment of over RMB 2 trillion, will significantly boost the demand for high - end and large - scale construction machinery, serving as a key investment catalyst for the construction machinery industry [1][5][7] - The 14th Five - Year Plan sets the tone for the industry, promoting original innovation and the development of strategic emerging industries. The equipment replacement demand in the machinery industry is expected to be gradually released, benefiting cyclical sectors such as construction machinery [1][12] - China's construction machinery export data has been growing rapidly. The Chinese market is at a cyclical inflection point, and exports are expected to rise from $234 billion in 2024 to $570 billion in 2030. Domestic companies' overseas revenue has increased significantly [1][17][22] - The CSI Construction Machinery Theme Index allows for one - click allocation of core construction machinery assets. It has high long - term returns, high volatility, and significant event - driven characteristics. The performance of its constituent stocks is expected to continue to improve [1][34][56] - The Huaxia CSI Construction Machinery ETF closely tracks the CSI Construction Machinery Theme Index, aiming to minimize tracking deviation and error [1][68] Summary by Directory 1. The 14th Five - Year Plan Sets the Tone for the Industry, and Domestic Brands Accelerate Overseas Expansion 1.1 The Yaxia Hydropower Project Starts, and Trillion - Dollar Investment Creates a Century - Long Project - The Yaxia Hydropower Project officially started in 2025. Its construction plan can be traced back to 2007, and it entered the implementation phase in 2024 [5] - Compared with the Three Gorges Project, the Yaxia Hydropower Project may have a dynamic investment of over RMB 2 trillion, and most of the investment will be used for power station construction and power transmission projects [7][9] 1.2 The 14th Five - Year Plan Sets the Tone for the Industry, and the Domestic and Overseas Sales of Excavators Continue to Improve Synchronously - The 14th Five - Year Plan emphasizes original innovation and the development of strategic emerging industries. The equipment replacement demand in the machinery industry is expected to be released, benefiting cyclical sectors [12] - In November 2025, the sales of various excavators reached 20,027 units, a year - on - year increase of 13.90%. Domestic sales increased by 9.11% year - on - year, and exports increased by 18.84% year - on - year, indicating the recovery of the industry [13] 1.3 The Global Construction Machinery Market is Vast, and China's Export Data Shows High Growth - The global construction machinery market is expected to grow from $213.5 billion in 2024 to $296.1 billion in 2030. The Chinese market is at a cyclical inflection point, expected to rise from $234 billion in 2024 to $570 billion in 2030 [17] - The global excavator market is expected to reach $92.8 billion in 2030. In China, excavators will lead the industry recovery with a growth rate of 16.8% [17] - Overseas markets account for nearly 90% of the global construction machinery market. China's construction machinery export volume has increased from $18.894 billion in 2020 to $52.829 billion in 2024, with a CAGR of 29.33% [22] 1.4 The Construction Machinery Cycle Reaches the Bottom and Rebounds, and Domestic Brands Accelerate Overseas Expansion - The excavator industry has experienced two cycles and is now in a new upward cycle. In 2024, the annual sales volume increased by 3.1% year - on - year, and from January to November 2025, the growth rate expanded to 16.7% [24] - The overseas revenue of the four major domestic construction machinery manufacturers has increased significantly. In 2024, the overseas revenue ratios of Sany Heavy Industry and Zoomlion exceeded 50% [27] - International giants still dominate the global market. Chinese construction machinery manufacturers such as XCMG, Sany Heavy Industry, and Zoomlion still have room for improvement in global market share [29] 2. The CSI Construction Machinery Theme Index: One - Click Allocation of Core Construction Machinery Assets 2.1 Index Compilation: Selecting Core Leaders in the Construction Machinery Industry - The CSI Construction Machinery Theme Index was released on September 27, 2021, with a base date of June 30, 2016. It selects 50 representative listed companies in the construction machinery field as samples to reflect the overall performance of construction machinery - related stocks [34] - The index samples are adjusted semi - annually, on the next trading day after the second Friday of June and December each year [36] 2.2 Industry Market Value Characteristics: High Concentration in the Construction Machinery Sector, with Market Value Structure Dominated by Leading Companies - As of January 6, 2026, the index has 50 constituent stocks, with an average total market value of RMB 28.131 billion. Five stocks have a market value of over RMB 100 billion [37] - The top ten constituent stocks of the index account for 72.55% of the total weight. The top three stocks by weight are XCMG, Sany Heavy Industry, and Weichai Power [43] - The index focuses on the construction machinery, auto parts, and special equipment sectors, with a combined proportion of over 87%. The construction machinery industry has the highest weight, at 61.99% [46] 2.3 High Elasticity, Offensive Nature, and Long - Term Allocation Value - In the rising market, the CSI Construction Machinery Index has strong explosive power. For example, from January 31 to April 19, 2019, its cumulative return was 44.07%, significantly higher than that of broad - based indices [50] - Since the base date, the cumulative return of the index has reached 153.95%, and the annualized return is 10.60%, far exceeding that of major broad - based indices. It has high volatility and a large maximum drawdown, indicating its high - elasticity offensive characteristics [56] - The index shows a pattern of leading in the up - cycle and adjusting in the down - cycle. In 2019 and 2025, its annual returns were significantly higher than those of broad - based indices [62] 2.4 High - Level Operation Supported by Positive Expectations, Highlighting the Attention of Sector Allocation - As of January 5, 2026, the P/E ratio of the CSI Construction Machinery Index was 24.13, with a historical quantile of 79.59%, and the P/B ratio was 2.26, with a historical quantile of 94.49%. The valuation is at a relatively high level [65] - The market's positive expectations for the industry have been reflected in the valuation, highlighting the long - term certainty of sector allocation [65] 3. Huaxia CSI Construction Machinery ETF - The Huaxia CSI Construction Machinery ETF (fund code: 515970) closely tracks the CSI Construction Machinery Theme Index, aiming to minimize tracking deviation and error. It started raising funds on January 19, 2026, and ended on January 30, 2026, with Wang Xinwei as the fund manager [68]

Core Viewpoint - Zhonglian Heavy Industry (000157) is set to enter the humanoid robot industry starting in 2024, leveraging its technological expertise in industrial internet, artificial intelligence, IoT, and robotics [1] Company Summary - The company has developed full-stack self-research capabilities in both hardware and software for humanoid robots, launching multiple self-developed prototypes [1] - Zhonglian Heavy Industry has released the "Cloud Valley Embodied Intelligent Model" and associated toolchain [1] - Key components for the robots, such as planetary joint modules, cycloidal joint modules, reducers, controllers, and motors, are developed in-house [1] - The company has established a training ground for humanoid robots [1] - Several self-developed robot products have undergone multiple iterations, with dozens of robots currently validating and collecting data in various scenarios, including pre-assembly of engineering machinery, goods sorting, palletizing, scanning for loading, assembly of medium-sized components, and quality inspection [1] Industry Summary - The robotics sector is considered a cutting-edge technology and a key national strategic industry [1] - The overall research and application within the industry is still in the early investment stage, and achieving large-scale profitability will require more time [1]

Investment Rating - The industry rating is "Positive" [4] - The companies recommended for "Increase" rating are Zoomlion (000157), Hengli Hydraulic (601100), Jiechang Drive (603583), and Haomai Technology (002595) [4] Core Insights - The national construction machinery operating rate for 2025 is projected to be 44.89%, with 18 provinces exceeding 50% [14] - The sales volume of excavators for the entire year of 2025 is expected to reach 235,300 units, with domestic sales of 118,500 units, reflecting a year-on-year growth of 17.9% [33] - The domestic humanoid robot industry remains highly prosperous, with several companies initiating IPO processes, indicating significant investment opportunities in the sector [33] - The Ministry of Industry and Information Technology and other departments have issued guidelines for the construction of zero-carbon factories, aiming to enhance energy efficiency and promote green transformation in key industries [14][15] Industry News - The construction machinery operating rate in 2025 is 44.89%, with leading provinces including Anhui, Zhejiang, and Jiangxi [14] - The port equipment operating rate has shown continuous growth from July to December 2025, indicating a shift in foreign trade dynamics [14] - The guidelines for zero-carbon factory construction emphasize systematic advancement and innovation-driven approaches to reduce carbon emissions in various industries [15] Company Announcements - Tianjin Jinrong Tianyu Precision Machinery Co., Ltd. announced an investment in an industrial fund to enhance its strategic development and market insight [23] - Guangzhou Dayilong Packaging Machinery Co., Ltd. forecasts a net profit growth of 51.88% to 86.27% for 2025, driven by market expansion and operational efficiency improvements [24] Market Review - From January 14 to January 20, 2026, the Shanghai and Shenzhen 300 Index fell by 0.89%, while the Shenwan Machinery Equipment Industry rose by 1.23%, outperforming the index by 2.11 percentage points [25] - As of January 20, 2026, the price-to-earnings ratio (PE) for the Shenwan Machinery Equipment Industry is 50.55, with a valuation premium of 254.64% compared to the Shanghai and Shenzhen 300 Index [26]

Core Viewpoint - The company, Zoomlion, has no business operations in Venezuela but is actively expanding its presence in South America through localized operations and product adaptation [1] Group 1: Business Expansion - The company is a leading engineering machinery enterprise in China and is enhancing its market influence in South America and Latin America [1] - It has established sales and service networks in major economies such as Brazil, Chile, Argentina, Peru, and Colombia, with Brazil being the strategic core market [1] Group 2: Local Operations and Product Adaptation - The company has set up a factory in Brazil to produce cranes, concrete machinery, and other equipment, serving the South American market [1] - It offers machinery tailored to local conditions, including cranes, earthmoving machinery, concrete machinery, mining machinery, and aerial work platforms [1] Group 3: Future Outlook - The company aims to further expand its business in the region by increasing localization efforts, driving technological innovation, and integrating the supply chain [1]

Market Overview - The engineering machinery sector increased by 0.24% on January 20, with Shantui leading the gains [1] - The Shanghai Composite Index closed at 4113.65, down 0.01%, while the Shenzhen Component Index closed at 14155.63, down 0.97% [1] Top Performers - Shantui (000680) closed at 12.85, up 3.21% with a trading volume of 369,800 shares and a turnover of 470 million yuan [1] - Yichang Heavy Industry (600031) closed at 22.55, up 2.04% with a trading volume of 1,004,500 shares and a turnover of 2.252 billion yuan [1] - LiuGong (000528) closed at 11.76, up 1.64% with a trading volume of 439,400 shares and a turnover of 513 million yuan [1] Underperformers - Tietuo Machinery (920706) closed at 31.02, down 5.94% with a trading volume of 84,500 shares and a turnover of 269 million yuan [2] - Hailun Zhe (300201) closed at 7.48, down 5.67% with a trading volume of 683,600 shares and a turnover of 516 million yuan [2] - Shaoyang Hydraulic (301079) closed at 46.05, down 5.38% with a trading volume of 124,300 shares and a turnover of 579 million yuan [2] Capital Flow - The engineering machinery sector experienced a net outflow of 19.0863 million yuan from institutional investors, while retail investors saw a net outflow of 312 million yuan [2] - Speculative funds had a net inflow of 331 million yuan into the sector [2] Individual Stock Capital Flow - Yichang Heavy Industry (600031) had a net inflow of 210 million yuan from institutional investors, accounting for 9.33% of its total [3] - Zhonglian Heavy Industry (000157) saw a net inflow of 115 million yuan from institutional investors, representing 16.48% [3] - Xugong Machinery (000425) had a net inflow of 55.5787 million yuan from institutional investors, making up 5.89% [3]

Group 1 - The company has not participated in the recyclable rocket business [1] - The company does not produce or sell storage chips [1]

Group 1 - The core point of the article is that Zoomlion Heavy Industry Science & Technology Co., Ltd. has obtained a patent for a control method and system related to shot blasting technology, indicating innovation in specialized equipment manufacturing [1] - The patent, titled "Control Method for Shot Blasting System, Shot Blasting System, Controller, and Storage Medium," was granted with the announcement number CN117564942B, and the application date was October 2023 [1] - Zoomlion Heavy Industry Science & Technology Co., Ltd. was established in 2019, located in Changsha, with a registered capital of 3.8 billion RMB, and has engaged in 176 bidding projects and holds 641 patents [1] Group 2 - Shaanxi Zoomlion Western Heavy Machinery Co., Ltd., established in 2020 in Weinan, has a registered capital of 1.35 billion RMB, participated in 127 bidding projects, and holds 566 patents [1] - The company has also obtained 145 administrative licenses, indicating a strong regulatory compliance and operational capability [1] - The data from Tianyancha shows that both companies are actively involved in the specialized equipment manufacturing sector, highlighting their growth and investment activities [1]