Core Viewpoint - The report from Daiwa suggests that due to the ongoing Middle East conflict and frequent policy changes by related leaders, the overall market has experienced significant volatility. Investors are advised to avoid stocks affected by the Middle East tensions, such as shipping and airline stocks, and instead consider buying undervalued stocks [1] Group 1: Investment Recommendations - Recommended stocks include BYD Company Limited (002594), Weichai Power Co., Ltd. (000338), Minth Group Limited (00425), JD Logistics, Inc. (02618), and Zoomlion Heavy Industry Science and Technology Co., Ltd. (000157) [1]

Core Viewpoint - The report from Daiwa highlights significant market volatility due to the Middle East conflict and frequent policy changes by related leaders, suggesting investors avoid stocks affected by this tension and instead focus on undervalued stocks [1] Group 1: Market Conditions - The overall market has experienced severe fluctuations recently due to the ongoing Middle East war [1] - Investors are advised to steer clear of stocks impacted by the Middle East tensions, particularly in the shipping and airline sectors [1] Group 2: Investment Recommendations - Daiwa recommends taking advantage of the current situation to buy undervalued stocks [1] - Specific stock recommendations include BYD, Weichai Power, Minth Group, JD Logistics, and Zoomlion [1]

Investment Rating - The report maintains an "Outperform" rating for the machinery equipment industry [1]. Core Insights - The machinery equipment industry is experiencing sustained growth, with February exports exceeding expectations. The main drivers are the "replacement cycle and external demand" [1][6]. - Domestic sales of excavators slightly decreased in January-February 2026, while exports continued to grow significantly. The overall upward trend for the year remains unchanged despite short-term fluctuations due to the Spring Festival [6]. Summary by Sections Market Review - In February 2026, the Shenwan Machinery Index rose approximately 7.35%, outperforming the Shanghai Composite Index by 6.26 percentage points and the CSI 300 by 7.26 percentage points [13]. - The performance of different segments includes: - Complete machine manufacturing for earthmoving/concrete/lifting machinery: -1.7% - Complete machine manufacturing for others: 2.5% - Components: 20.7% [13]. Industry Tracking - Excavator sales in January-February 2026 totaled 35,934 units, a year-on-year increase of 13.10%. Domestic sales were 15,478 units, down 9.19%, while exports reached 20,456 units, up 38.8% [18]. - Loader sales for the same period were 21,299 units, a year-on-year increase of 27.9%. Domestic sales were 9,156 units, up 11.5%, and exports were 12,143 units, up 43.9% [18]. Macro Dynamics - In February 2026, the manufacturing PMI fell to 49.0%, indicating a seasonal decline. However, high-tech manufacturing PMI remains in the expansion zone at 51.5% [48]. - The government has clarified its fiscal strategy, planning to issue 4.4 trillion yuan in special bonds and 800 billion yuan in ultra-long-term special bonds to support large-scale equipment updates [48]. Key Targets - Recommended leading manufacturers include: - Zoomlion Heavy Industry (000157) - Sany Heavy Industry (600031) - XCMG (000425) - LiuGong (000528) [6]. - Core component manufacturers to focus on: - Hengli Hydraulic (601100) - Aidi Precision (603638) - Fushite (301446) [6].

Core Insights - The visit of Volvo Group's senior vice president Redha Messaoui and his team to SANY Heavy Truck aims to explore high-quality development paths for new energy heavy trucks and contribute to global green transportation transformation [1][5]. Group 1: Collaboration and Innovation - The meeting involved discussions on research and development innovation, supply chain management, and China's innovation ecosystem, emphasizing mutual learning and collaboration [1]. - Volvo executives recognized SANY's achievements in smart manufacturing, low-carbon initiatives, and digitalization during their visit to the SANY Intelligent Heavy Truck Industrial Park [3]. - SANY Heavy Truck has been a pioneer in the electrification of heavy trucks since launching its electrification strategy in 2021, marking four years of low-carbon innovation [9]. Group 2: Industry Trends and Insights - Redha Messaoui highlighted Volvo's focus on cutting-edge technologies such as batteries and hydrogen fuel, noting that China is at the forefront of these fields [5]. - The discussions included key topics like shortening R&D cycles, optimizing critical components, and leveraging supply chain advantages, showcasing the integration of various strengths contributing to "China speed" [9]. - The president of Volvo Trucks China, Cen Jiahui, stated that understanding Chinese enterprises and deepening industry exchanges are crucial for Volvo's strategy [8].

Group 1: Bilibili - Digital Media - The company reported Q4 2025 revenue of 8.32 billion yuan, representing a year-over-year increase of 8% and a quarter-over-quarter increase of 8% [3] - Monthly Active Users (MAU) grew by 8% year-over-year to 366 million, while Daily Active Users (DAU) increased by 10% to 113 million, indicating improved user engagement [4] - The advertising revenue for Q4 2025 reached 3.04 billion yuan, a 27% year-over-year growth, with AI-related advertising revenue increasing by 180% [6] - The mobile gaming segment generated 1.54 billion yuan in revenue for Q4 2025, showing a year-over-year decline of 14%, but the total game revenue for the year was 6.39 billion yuan, up 14% [5] - The company expects revenues of 32.8 billion yuan and 36.4 billion yuan for 2026 and 2027, respectively, with a target market capitalization of 100.3 billion yuan for 2026 [7] Group 2: Zoomlion - Engineering Machinery - The company operates in three major markets: engineering machinery, agricultural machinery, and mining machinery, with a focus on domestic recovery and overseas expansion [9] - The global engineering machinery market is projected to reach 238 billion USD by 2024, with a favorable industry beta reflecting a weak domestic recovery and stable export demand [10] - The company’s overseas revenue accounted for 55.6% of total revenue as of H1 2025, with a gross margin of 31.4%, indicating strong international growth potential [11] - The company is developing new business segments in earthmoving machinery, agricultural machinery, and mining machinery, which are expected to contribute to future growth [12] - Revenue forecasts for 2025-2027 are 501 billion, 580 billion, and 678 billion yuan, respectively, with net profit estimates of 48 billion, 59 billion, and 73 billion yuan [12] Group 3: Domestic Large Aircraft - The domestic large aircraft has been included in the "14th Five-Year Plan" as a significant engineering project, indicating strong government support for its development [13] - The C919 aircraft is now in regular commercial operation with major domestic airlines, reflecting a positive growth trend in the domestic aviation market [15] - The demand for commercial aircraft in China is expected to grow, with a projected 25% increase in aircraft deliveries in 2025 [14] - The C919 is also making progress in obtaining international certifications, which could enhance its competitiveness against Boeing and Airbus [16] Group 4: OpenClaw - Industry Dynamics - OpenClaw has become the fastest-growing open-source software project on GitHub, indicating significant interest and potential in the AI automation space [18] - The platform is designed to automate tasks using natural language processing, which could redefine human-computer interaction [19] - OpenClaw's deployment is expected to increase demand for cloud computing and highlight the importance of cybersecurity [22] - The cost advantage of Chinese models in the token market is expected to accelerate the export of AI models and computing power [23]

Investment Rating - The industry investment rating is "Overweight" indicating that the industry index is expected to outperform the CSI 300 index by 10% or more over the next six months [7]. Core Insights - The report highlights a positive trend in excavator exports, with a year-on-year increase of 37.2% in February 2026, despite a domestic sales decline of 42% due to the Chinese New Year holiday affecting workdays [6]. - The domestic demand for excavators is anticipated to recover gradually, supported by major projects in sectors such as mining and water conservancy, which are expected to release demand dividends [6]. - The loader segment also shows growth, with domestic sales increasing by 11.5% in January-February 2026, driven by the commencement of significant domestic projects [6]. - The report emphasizes the importance of companies like Zoomlion, which raised RMB 60 billion through convertible bonds to support global expansion and innovation in technology [6]. - The report suggests focusing on leading companies with strong brand recognition and efficient cost structures, such as Sany Heavy Industry, Zoomlion, LiuGong, Shantui, and Hengli Hydraulic, as they are well-positioned for growth in both domestic and international markets [6]. Summary by Sections Excavator Market - In February 2026, a total of 17,226 excavators were sold, a decrease of 10.6% year-on-year, with domestic sales at 6,755 units, down 42% [6]. - Year-to-date (January-February) domestic sales were 15,478 units, down 9.19%, while exports reached 20,456 units, up 38.8% [6]. Loader Market - In February 2026, 9,540 loaders were sold, marking a year-on-year increase of 9.28%, with domestic sales at 3,863 units, down 14.3%, and exports at 5,677 units, up 34.4% [6]. - Year-to-date (January-February) domestic sales were 9,156 units, up 11.5%, and exports were 12,143 units, up 43.9% [6]. Company Developments - Zoomlion's issuance of convertible bonds aims to enhance its global competitiveness and support innovation in new technologies, with 50% of the funds allocated for global development and the other 50% for high-quality development strategies [6].

Investment Rating - The report maintains a "Buy" rating for the company [1] Core Views - The company is positioned as a veteran in the engineering machinery sector, with a robust global layout and a focus on three major markets: engineering machinery, agricultural machinery, and mining machinery. The report highlights four key growth drivers: domestic recovery providing profit elasticity, overseas expansion ensuring growth certainty, emerging sectors creating a second growth curve, and advancements in embodied intelligence potentially enhancing company valuation [4][15] Summary by Sections Company Overview - The company has a history of over 60 years in engineering machinery, originating from the Ministry of Construction's research institute. It has established a global presence with over 30 primary business hubs and more than 430 secondary and tertiary outlets, enhancing its sales and service network [4][24] - The company’s core products include concrete machinery, lifting machinery, and earth-moving machinery, which maintain a strong market position domestically and are expanding internationally [28] Market Analysis - The global engineering machinery market is projected to reach USD 238 billion by 2024, with a significant recovery in domestic demand and stable export conditions. The agricultural machinery market is also expected to grow, driven by both domestic recovery and favorable overseas conditions. The mining machinery market is anticipated to exceed RMB 800 billion by 2026, benefiting from increased capital expenditure in the mining sector [5][48] Growth Drivers - Domestic recovery is expected to enhance profit elasticity, particularly in earth-moving equipment, while overseas revenue accounted for 55.6% of total revenue as of mid-2025, with a higher gross margin compared to domestic sales [6][7] - The company is actively developing emerging sectors such as earth-moving machinery, agricultural machinery, and mining machinery, which are expected to contribute significantly to future growth [38] - The company is investing in embodied intelligence, with plans to launch humanoid robots and develop a comprehensive self-research capability in this area, potentially creating a new growth curve [7][40] Financial Projections - Revenue is projected to grow from RMB 500 billion in 2025 to RMB 678 billion by 2027, with net profit expected to increase from RMB 48 billion to RMB 73 billion over the same period. The report anticipates a PE ratio decline from 17 to 11 over the forecast period [9]

Investment Rating - The industry investment rating is "Buy" [2] Core Viewpoints - The report highlights a strong post-holiday resumption of work in March, indicating a positive outlook for the engineering machinery industry [4] - Excavator sales in February 2026 were 17,226 units, down 10.6% year-on-year, with domestic sales at 6,755 units, down 42%, while exports increased by 37.2% [4] - The report anticipates that March excavator sales could be 1.5 to 1.8 times the combined sales of January and February, projecting a year-on-year growth of approximately 20% [4] - The export market remains robust, with a 5% month-on-month increase in excavator exports in February, driven by strong overseas demand [4] - Investment suggestions include focusing on hydraulic component manufacturers and major engineering machinery manufacturers, with specific recommendations for companies like Hengli Hydraulic, Sany Heavy Industry, XCMG, and Zoomlion [4] Summary by Sections Sales Performance - In January and February 2026, a total of 35,934 excavators were sold, reflecting a year-on-year increase of 13.1% [4] - Domestic sales for the same period were 15,478 units, down 9.19%, while exports reached 20,456 units, up 38.8% [4] Market Conditions - The report notes that the decline in domestic sales is primarily due to the impact of the Chinese New Year, with a significant drop in local government bond issuance in February [4] - The construction activity is improving, with a recovery rate of 23.5% for construction sites as of March 4, 2026, and a labor utilization rate of 29.7% [4] Future Outlook - The report expresses optimism for March, citing improved labor and funding conditions, particularly in high-speed rail, water conservancy, and housing projects [4] - The report emphasizes that the industry is approaching a phase of internal and external resonance, with a favorable outlook for both domestic and export markets [4]

Investment Rating - The report assigns an "Accumulate" rating for the industry, indicating a positive outlook for investment opportunities [4]. Core Insights - The industry is experiencing a cyclical recovery domestically, with structural improvements in export demand. The gradual implementation of counter-cyclical fiscal policies is expected to sustain the industry's positive momentum [2]. - Domestic sales of excavators are projected to rebound as the industry cycle turns upward, with leading companies enhancing their overseas presence and entering a harvest phase. The operational leverage within the industry is anticipated to gradually release [4]. Summary by Sections Industry Fundamentals - In February 2026, a total of 17,226 excavators were sold, representing a year-on-year decline of 10.6%. Domestic sales accounted for 6,755 units (including 19 electric excavators), down 42% year-on-year, while exports reached 10,471 units (including 16 electric excavators), marking a year-on-year increase of 37.2% [4]. - For January to February 2026, a total of 35,934 excavators were sold, reflecting a year-on-year growth of 13.1%. Domestic sales were 15,478 units (including 43 electric excavators), down 9.19%, while exports totaled 20,456 units (including 27 electric excavators), up 38.8% [4]. - The share of domestic sales in total sales for February 2026 was 39%, while exports accounted for 61%. For January to February 2026, domestic sales represented 43% and exports 57% of total sales [4]. Operating Hours and Rates - The average working hours for major construction machinery products in February 2026 was 55 hours, showing a year-on-year increase of 18.6% but a month-on-month decrease of 24.1%. Specific working hours included excavators at 48.2 hours and loaders at 69.9 hours [4]. - The operating rate for major construction machinery products in February 2026 was 35.9%, down 8.63 percentage points year-on-year and 12.2 percentage points month-on-month. Excavators had an operating rate of 36.5% [4]. Company Recommendations - Recommended stocks include SANY Heavy Industry, Zoomlion Heavy Industry, XCMG, Liugong, and Hengli Hydraulic, all expected to benefit from the industry's recovery and growth [4].

Investment Rating - The industry investment rating is "Overweight" indicating a positive outlook for the engineering machinery sector [2][4]. Core Insights - The engineering machinery industry shows an upward trend in sales, with a total of 17,226 excavators sold in February 2026, a year-on-year decrease of 10.6%. However, the cumulative sales for January-February 2026 reached 35,934 units, reflecting a year-on-year increase of 13.1% [2][4]. - Exports have significantly exceeded market expectations, with excavator exports in February 2026 increasing by 37.2% year-on-year, and cumulative exports for January-February 2026 growing by 38.8%. Exports accounted for 60.8% of total sales in February, marking a historical high [2][4]. - Domestic sales saw a decline of 42% in February 2026, attributed to the timing of the Spring Festival, rather than a weakening demand. The actual demand remains resilient when adjusted for working days [4]. - The report anticipates a synchronization of domestic and international sales, with a potential surge in domestic demand as the traditional construction season begins in March 2026 [4]. - The report highlights key investment opportunities in the engineering machinery sector, focusing on major manufacturers such as SANY Heavy Industry, XCMG, Zoomlion, LiuGong, and Shantui, as well as component suppliers like Hengli Hydraulic, Aidi Precision, Fushite, and Weiman Sealing [4]. Summary by Sections Sales Performance - In February 2026, a total of 17,226 excavators were sold, down 10.6% year-on-year. Domestic sales were 6,755 units, down 42%, while exports reached 10,471 units, up 37.2% [2][4]. - Cumulative sales for January-February 2026 were 35,934 units, with domestic sales at 15,478 units (down 9.19%) and exports at 20,456 units (up 38.8%) [2][4]. Market Dynamics - The engineering machinery industry is experiencing a recovery trend, with strong export growth and resilient domestic demand expected to drive future performance [4]. - The report notes that the current domestic industry cycle resembles the upward phase of the 2017-2018 renewal cycle, suggesting a robust recovery ahead [4]. Investment Opportunities - The report identifies key companies for investment consideration, including SANY Heavy Industry, XCMG, Zoomlion, LiuGong, and Shantui for main machinery, and Hengli Hydraulic, Aidi Precision, Fushite, and Weiman Sealing for components [4].