SCS(SH:601555) 智通财经网·2025-12-09 02:03Core Viewpoint - The engineering machinery sector is currently at the beginning of an upward cycle, with expected profit growth of over 20% in the next 2-3 years, and core targets showing a profit valuation of only 10-16X by 2026 [1] Group 1: Domestic Market Outlook - The engineering machinery sector is expected to fully recover domestically in 2025, with a gradual acceleration in revenue [1] - From January to October 2025, domestic excavator sales increased by 19.6% year-on-year, indicating a significant improvement compared to 2024 [1] - The overall revenue of the engineering machinery sector is projected to grow by 12% year-on-year in the first three quarters of 2025 [1] Group 2: Profitability and Cost Reduction - The sector's profitability is improving due to scale effects and ongoing cost reduction initiatives [2] - As demand recovers, the capacity utilization rate is expected to rise, positively impacting profits [2] - In the first three quarters of 2025, the net profit margins for major companies like Sany Heavy Industry, XCMG, and Zoomlion increased by 2.4, 0.1, and 0.8 percentage points respectively [2] Group 3: 2026 Outlook - Domestic excavator demand is projected to grow at an average annual rate of over 30% from 2025 to 2028, with peak sales expected to reach 250,000 units by 2028 [3] - The current cycle is characterized by a lower slope but a longer duration, with a moderate recovery trend anticipated [3] - The overseas excavator market is expected to enter a new upward cycle in 2026, coinciding with the Federal Reserve's interest rate cuts, creating a resonance effect with the domestic market [3]