Soochow Securities·2025-08-31 05:34Investment Rating - The report maintains a "Buy" rating for the mechanical equipment industry, particularly highlighting investment opportunities in PCB equipment and undervalued high-growth engineering machinery [1]. Core Insights - The PCB equipment sector is expected to benefit significantly from the increasing demand for high-end HDI boards driven by AI computing server needs, with a projected market value growth of 33% year-on-year in 2024 [2][3]. - The engineering machinery sector is poised for sustained performance due to a cyclical upturn, with domestic excavator sales increasing by 22.3% year-on-year in the first half of 2025 [4]. - The oil service equipment market is entering a performance realization phase, driven by high demand in the Middle East, with projected revenue growth for leading companies like Jerry and Neway [5]. Summary by Sections PCB Equipment - Major PCB manufacturers are planning significant expansions in high-end HDI production capacity, with investments exceeding 60 billion yuan from companies like Shenghong Technology and Huadian [2]. - The global HDI board market is expected to grow at a rate of 18.8% in 2024, significantly outpacing the overall PCB industry growth of 5.8% [2][3]. - Key equipment segments to watch include drilling, exposure, and plating, with specific companies like Dazhu CNC and Xinqi Microelectronics highlighted for their roles in these areas [3][20]. Engineering Machinery - The domestic market is expected to maintain a 2-3 year upturn, with significant sales growth in excavators and loaders, supported by improved funding and replacement logic [4]. - The performance of leading companies such as Sany Heavy Industry and XCMG is expected to continue improving, with notable revenue and profit growth reported [4]. - The upcoming large-scale infrastructure projects, such as the Yarlung Tsangpo River project, are anticipated to further boost demand for engineering machinery [25][26]. Oil Service Equipment - The oil service equipment sector is experiencing a boom due to high demand in the Middle East, with significant investments projected in energy projects [5][38]. - Companies like Jerry and Neway are expected to see substantial revenue growth, with Jerry's revenue growth projected at 49% in Q2 2025 [5]. - The market for oil service equipment in the Middle East is expected to reach a scale of over 100 billion USD, indicating significant growth potential for Chinese companies [5][38].