EBSCN·2026-01-22 05:12Investment 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].