HTSC·2025-03-03 02:35Investment Rating - The report maintains an "Overweight" rating for the engineering machinery industry [6]. Core Insights - The excavator sales in January 2025 showed resilience during the traditionally slow season, with domestic sales of 5,405 units and exports of 7,107 units, reflecting a year-on-year growth of 0% and 2% respectively [2]. - The report highlights a positive trend in domestic demand for excavators, particularly small excavators, driven by the aging workforce and the need for machinery to replace labor [3]. - The rapid growth of second-hand excavator exports is expected to support domestic demand for new machines, as seen in the historical context of Japan's machinery market [4]. Summary by Sections Section 1: Market Performance - In January 2025, excavator domestic sales were stable compared to the same period in 2024, while loaders and cranes saw declines of 20% and 18% respectively [2]. - The operating hours for Komatsu China showed a year-on-year increase in late 2024, indicating a recovery in equipment utilization rates [2]. Section 2: Small Excavator Growth - Small excavators accounted for 75,000 units sold in 2024, marking a 21% increase year-on-year, while larger excavators saw declines [3]. - Price adjustments for small excavators have been noted, with several manufacturers increasing prices, indicating a potential easing of price competition in the future [3]. Section 3: Recommendations - The report recommends leading manufacturers with a higher proportion of excavator sales, specifically SANY Heavy Industry, XCMG, and LiuGong, as key investment opportunities [5]. - The expected recovery in domestic demand for engineering machinery is anticipated to benefit these companies significantly [5]. Section 4: Target Prices and Valuations - Target prices for recommended stocks are set as follows: SANY Heavy Industry at 19.49 CNY, XCMG at 9.42 CNY, and LiuGong at 15.30 CNY, all with a "Buy" rating [9][21].