Summary of Conference Call on Construction Machinery Industry Company/Industry Involved - The conference call focuses on the construction machinery industry, specifically discussing the performance and outlook of major companies such as SANY, XCMG, Zoomlion, and LiuGong. Core Points and Arguments Domestic Market Outlook - The construction machinery market in China is expected to see a positive trend, with excavator sales projected to turn positive starting March 2024, continuing to rise thereafter. Other machinery types like cranes and concrete equipment are also expected to follow this upward trend [1][2]. - The domestic market is characterized as having a "bottoming out" phase, driven by equipment replacement and the export of second-hand machinery, which provides space for domestic upgrades [2]. Overseas Market Potential - The overseas market is showing strong growth potential, particularly in regions such as South America, Africa, India, Indonesia, and Russia. North America and Europe are also expected to see positive trends, with North America projected to grow by around 20% starting June 2024 [2][3]. - Chinese manufacturers currently hold a 30% market share in non-U.S. markets, with significant potential for growth, especially in Indonesia where market share exceeds 65% [3]. Profitability and Market Dynamics - Concerns about declining profitability as market share increases are addressed. Examples from other industries (solar, lithium batteries, and new energy vehicles) indicate that Chinese companies can achieve high profitability in overseas markets, with leading firms in Indonesia achieving net profit margins above 16% [4]. - The profitability in overseas markets is expected to remain high due to the upward cycle and productivity improvements, with sustainable growth anticipated [4]. Profit Contribution Factors - The analysis emphasizes the importance of quantifying scale effects, operational leverage, and the impact of increasing overseas market share on profitability. It is suggested that profit elasticity will significantly exceed revenue elasticity due to the scale effects inherent in the construction machinery industry [5][6]. - Key factors contributing to profit include: - **Operational Leverage**: Cost increases (like depreciation) are expected to be lower than revenue increases, enhancing profit margins [6][7]. - **Employee Costs**: The need for additional hiring is minimized due to the use of local distributors in overseas markets [8]. - **Export Contribution**: Higher gross and net profit margins in overseas markets compared to domestic markets are expected to enhance overall profitability [8]. Financial Projections - For SANY, domestic revenue is projected to recover to two-thirds of 2020 levels, with overseas revenue expected to double, leading to a total revenue range of 500 billion to 1.6 trillion [15][16]. - Profit projections for SANY suggest a potential profit of around 250 billion, indicating a significant opportunity for investment [17]. - XCMG is also expected to see a doubling of revenue, with profit projections around 200 billion, aligning with its growth strategy in the mining machinery sector [19][20]. Market Valuation - SANY's market valuation could reach 3 trillion based on projected profits, while XCMG could also see substantial growth, with a target market cap of 3 trillion based on its performance in mining machinery [24][26]. - The overall sentiment is positive for the construction machinery sector, with expectations of sustained growth and profitability in the coming years [28]. Other Important but Possibly Overlooked Content - The cyclical nature of the construction machinery market is highlighted, with historical data showing that every year around March, there is a surge in performance due to earnings reports [28]. - The call concludes with a strong recommendation for investment in companies with solid earnings, particularly in the construction machinery sector, as both domestic and international markets are expected to experience upward trends in the coming years [28].

Core Viewpoint - The sales of excavators and loaders in January 2026 show significant growth, indicating a strong recovery in the domestic and international construction machinery market driven by major infrastructure projects and increasing demand for equipment upgrades [2][3][4]. Excavator Sales - In January 2026, a total of 18,708 excavators were sold, representing a year-on-year increase of 49.5%, with domestic sales reaching 8,723 units (up 61.4%) and exports totaling 9,985 units (up 40.5%) [2][3]. - The strong growth in domestic sales is attributed to a low base from the previous year due to the early Spring Festival, and upcoming projects in various sectors are expected to further boost demand [3]. - The export value of excavators in December 2025 was $1.277 billion, a month-on-month increase of 39.28%, and a year-on-year increase of 75.17% compared to December 2024 [3]. Loader Sales - In January 2026, a total of 11,759 loaders were sold, marking a year-on-year increase of 48.5%, with domestic sales of 5,293 units (up 42.8%) and exports of 6,466 units (up 53.4%) [2][4]. - The growth in domestic loader sales is driven by the commencement of major projects, such as the Yaxia Hydropower Station and the New Tibet Railway, which have increased demand for earth-moving equipment [4]. - The sales of electric loaders reached 2,990 units, with an electric penetration rate of 25.43%, indicating a growing acceptance of electric machinery in the market [4]. Company Performance - Liugong (000528) is projected to achieve a net profit of 1.526 billion to 1.659 billion yuan for 2025, reflecting a year-on-year growth of 15-25%, driven by stable demand in the domestic construction machinery sector [4]. - The company's growth strategy focuses on comprehensive solutions, digitalization, and globalization, aiming to optimize business combinations and reduce costs across the value chain [4]. Investment Recommendations - The report suggests focusing on companies with strong brand recognition, comprehensive product matrices, efficient cost management, and robust R&D capabilities, such as SANY Heavy Industry (600031), Zoomlion (000157), Liugong, Shantui (000680), and Hengli Hydraulic (601100) [5].

Core Insights - The sales of excavators in January 2026 are projected to reach 18,700 units, representing a year-on-year increase of 49.5% [1] - Domestic sales are expected to be 8,723 units, up 61.4% year-on-year, while exports are anticipated to be 9,985 units, reflecting a 40.5% increase [1] - The export volume of used machinery from October to December 2025 has shown significant growth, with increases of 69%, 80%, and 99% respectively, indicating effective clearance of existing equipment [1] Industry Outlook - According to Huatai Securities, the continuous rise in global copper prices is likely to boost demand for overseas mining machinery, supporting the growth of domestic leading manufacturers and component companies [1] - The engineering machinery sector is expected to experience a dual upward trend driven by both domestic and international factors, with key infrastructure projects and a potential recovery in real estate providing support for domestic demand [1] - Guotai Junan Securities highlights the strong performance of overseas markets during the current engineering machinery boom, with domestic companies focusing on Southeast Asia, Europe, and South America, indicating positive industry growth prospects [1] Related Companies - Key companies in the engineering machinery sector include China Longgong (03339), Sany Heavy Industry (600031), Sany International (00631), Zoomlion Heavy Industry (000157), and Zhongchuang Zhiling (601717) [2]

Core Viewpoint - The engineering machinery industry is experiencing significant growth, with a notable increase in both domestic and export sales of excavators, driven by strong demand and favorable market conditions [1]. Group 1: Sales Performance - In January 2026, excavator sales reached 18,700 units, representing a year-on-year increase of 49.5% [1] - Domestic sales accounted for 8,723 units, up 61.4% year-on-year [1] - Export volume was 9,985 units, showing a year-on-year growth of 40.5% [1] Group 2: Market Dynamics - Data from the General Administration of Customs indicates that second-hand machinery exports saw significant growth in Q4 2025, with increases of 69%, 80%, and 99% in October, November, and December respectively, indicating effective clearance of existing equipment [1] - Huatai Securities reports that rising global copper prices are expected to boost demand for overseas mining machinery, supporting the outlook for leading domestic manufacturers and component suppliers [1] - The engineering machinery sector is anticipated to benefit from the commencement of key infrastructure projects and a potential recovery in the real estate market, providing support for domestic demand [1] Group 3: Industry Outlook - Guotai Junan Securities highlights that the current cycle of engineering machinery is showing strong overseas performance, with domestic companies expanding their presence in Southeast Asia, Europe, and South America, indicating positive growth prospects for the industry [1]

海外監管公告 本公告乃根據香港聯合交易所有限公司證券上市規則第13.10B條而做出。 茲載列三一重工股份有限公司於上海證券交易所網站( www.sse.com.cn )刊登的公 告如下，僅供參閱。 承董事會命 三一重工股份有限公司 執行董事兼董事長 向文波 中國香港，2026年2月9日 於本公告日期，董事會包括(i)執行董事向文波先生及俞宏福先生；(ii)非執行董事 梁穩根先生、梁在中先生及劉道君先生及(iii)獨立非執行董事伍中信先生、席卿 女士及藍玉權先生。 香港交易及結算所有限公司及香港聯合交易所有限公司對本公告的內容概不負責，對其準確性 或完整性亦不發表任何聲明，並明確表示，概不對因本公告全部或任何部份內容而產生或因倚 賴該等內容而引致的任何損失承擔任何責任。 SANY HEAVY INDUSTRY CO., LTD. 三一重工股份有限公司 （於中華人民共和國註冊成立的股份有限公司） （股份代號：6031） 注册资本：919500.4437 万元 类型：其他股份有限公司（上市） 成立日期：1994 年 11 月 22 日 证券代码：600031 证券简称：三一重工 公告编号：2026-004 三一重工 ...

Core Viewpoint - The article highlights the exceptional performance of value fund manager Lan Xiaokang, who has achieved significant returns and increased management scale, positioning him among the top fund managers in the market [4][6]. Fund Performance - As of the end of Q4 2025, Lan Xiaokang's management scale reached 30.2 billion yuan, marking him as a leading figure in the value investment style [4]. - The fund "Zhongou Hongli Youxiang Flexible Allocation Mixed A" (004814.OF) managed by Lan achieved a net value growth rate of 46.7% in 2025, outperforming its benchmark by approximately 32 percentage points [4]. - In Q4 2025, the fund recorded a net value growth of 6.68%, following an 18.3% return in Q3, leading to a total return of 200.1% since Lan took over the fund [6][8]. Investment Strategy - Lan Xiaokang's investment style is characterized as "cyclical value," demonstrating stability with a maximum drawdown of about 19.5% since 2020, which is significantly lower than the average for equity funds [8]. - In 2025, the fund's allocation included 26.6% in both non-ferrous metals and non-bank financials, with additional holdings in banks (10.3%) and machinery (7%) [10][11]. Portfolio Adjustments - In Q4 2025, Lan Xiaokang made a notable shift in his portfolio, reducing exposure to non-ferrous metals and increasing investments in the financial sector, particularly insurance stocks [10][14]. - The top three holdings at the end of Q4 were all insurance companies: China Ping An, China Life, and New China Life, indicating a strategic pivot towards high-dividend, low-valuation stocks [12][14]. Market Outlook - Lan Xiaokang expressed a cautious outlook for 2026, emphasizing the importance of monitoring domestic economic recovery and potential risks from discrepancies in economic performance and market pricing in developed countries [21]. - The shift from resource stocks to financial dividends reflects a belief that the valuation of resource stocks may have peaked, while insurance stocks offer better value due to improving asset conditions [21].

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 significant increase in sales of excavators and loaders in January 2026, with excavator sales reaching 18,708 units, a year-on-year increase of 49.5%, and loader sales at 11,759 units, up 48.5% [6]. - Domestic excavator sales grew by 61.4% year-on-year, driven by low base effects from the previous year and upcoming large-scale projects in sectors like mining and water conservancy [6]. - Export sales of excavators also showed strong growth, with a 40.5% increase year-on-year, reflecting a growing global demand for Chinese machinery [6]. - The report anticipates a continued recovery in the excavator industry, supported by government policies promoting the replacement of old equipment and increasing domestic demand [6]. - The loader market is also expected to benefit from major domestic projects, with a notable increase in both domestic and export sales [6]. - The report suggests focusing on leading companies with strong brand recognition and efficient cost structures, such as SANY Heavy Industry, Zoomlion, LiuGong, and others [6]. Summary by Sections Sales Performance - In January 2026, excavator sales reached 18,708 units, a 49.5% increase year-on-year, with domestic sales at 8,723 units (up 61.4%) and exports at 9,985 units (up 40.5%) [6]. - Loader sales totaled 11,759 units, marking a 48.5% increase, with domestic sales at 5,293 units (up 42.8%) and exports at 6,466 units (up 53.4%) [6]. Market Trends - The report notes that the strong sales growth in excavators is partly due to a low base from the previous year and the upcoming launch of significant infrastructure projects [6]. - The demand for loaders is also expected to rise due to the commencement of major projects, which will increase the need for earth-moving equipment [6]. Company Performance - LiuGong is projected to achieve a net profit of between 1.526 billion and 1.659 billion yuan for 2025, reflecting a growth of 15-25% year-on-year, driven by stable demand in the domestic market [6]. - The company is implementing a "three-full" strategy focusing on comprehensive solutions, digitalization, and globalization to enhance its market position [6].

Market Performance - The Hang Seng Technology Index increased by 1.34%, while the Hang Seng Index rose by 1.76% [1] - The Hong Kong Stock Connect ETF from Yinhua (159318) gained 1.64%, and the Technology ETF from Penghua (159751) increased by 1.79% [1] Sector Performance - The insurance and communication equipment sectors showed the highest gains, while the energy equipment and services sector experienced the largest declines [1] Individual Stock Movements - Lanke Technology surged over 63%, followed by Zhipu with a 36.22% increase, and MINIMAX-WP rising by 11.71% [1] - Notable gainers also included: - Zhaoyi Innovation (603986) up 11.43% - China Duty Free (601888) up 8.31% - Innovent Biologics up 7.42% - SANY Heavy Industry (600031) up 7.12% [1] - Other significant increases were seen in: - Laopu Gold up 6.35% - Fast Retailing up 6.26% - Pop Mart up 5.76% - Zijin Mining (601899) up 5.58% - Weichai Power (000338) up 5.23% - Minmetals Resources up 5.0% - Ping An Insurance up 4.88% - Swire Properties up 4.71% - Zhaojin Mining up 4.21% - China National Heavy Duty Truck (000951) up 4.17% - SMIC up 4.07% [1] - On the downside, Xixiangfeng Group fell by 5.88%, and Weilu Group dropped by 15.47% [1] - Noteworthy gainers included Changfei Optical Fiber (601869) with a 15.31% increase and Dongfang Electric (600875) up 14.34% [1]

Investment Rating - The report maintains a positive outlook on the machinery industry, indicating an "Overweight" rating, suggesting that the industry is expected to outperform the overall market [12]. Core Insights - The machinery industry is projected to experience steady performance with technological advancements driving value recovery. Key sectors such as space photovoltaics, machine tools, robotics, and laser technology are highlighted as areas of growth [3][6]. - The report forecasts significant revenue growth for 21 tracked machinery companies in Q4 2025, with notable performers including Zoomlion (183%), DingTai High-Tech (179%), and Wolong Electric Drive (82%) [3][4]. Summary by Sections Space Photovoltaics - The commercial space sector is entering a new phase characterized by large-scale deployment and capability upgrades, leading to increased demand for space photovoltaics. The upcoming decade is expected to see a super cycle in satellite manufacturing and launching, directly impacting the demand for satellite energy systems [3]. - Key equipment suppliers in this sector include Maiwei Co., Aotwei, and others, focusing on the transition from traditional energy solutions to advanced photovoltaic technologies [3]. Machine Tools & Cutting Tools - The machine tool sector is anticipated to shift towards high-end transformation and domestic substitution of core components. The production of metal cutting machine tools is expected to reach 868,300 units in 2025, a 9.7% increase year-on-year [3]. - The cutting tool market is also expected to benefit from rising prices of tungsten and increased domestic demand, with companies like DingTai High-Tech and Huari Precision being recommended for investment [3]. Robotics & Components - The human-shaped robot industry is progressing towards commercialization, with significant developments expected in 2025. Major players like Tesla and Huawei are entering the market, and various forms of robots are being tested in real-world applications [3]. - Companies such as Lide Harmony and Yujian Technology are highlighted as key players in this evolving market [3]. Laser Technology - General laser technology is experiencing rapid growth due to high power and new technology iterations, while specialized lasers are seeing increased demand from sectors like AI PCB drilling and photovoltaic battery production [6]. - Recommended companies in this field include Baichu Electronics and Dier Laser [6]. Engineering Machinery - The engineering machinery sector is expected to benefit from both domestic and international demand, with significant infrastructure projects and capital expenditures anticipated [6]. - Key companies to watch include Sany Heavy Industry and XCMG [6]. Forklifts - The forklift market is projected to grow, with total sales expected to reach 1.4518 million units in 2025, a 12.9% increase year-on-year. The trend towards automation and smart logistics is reshaping the industry [6]. - Recommended companies include Anhui Heli and Hangcha Group [6]. Rail Transit Equipment - The railway investment is expected to maintain high growth, with fixed asset investments projected to reach 901.5 billion yuan in 2025, a 6.0% increase year-on-year [6]. - Key players in this sector include CRRC Corporation and Siwei Control [6].

Core Insights - The article highlights the top and bottom AH premium rates for various stocks, indicating significant discrepancies between H-shares and A-shares [1] Group 1: Top AH Premium Rates - Northeast Electric (00042) has the highest AH premium rate at 831.03%, with H-share priced at 0.290 HKD and A-share at 2.25 CNY [1] - Zhejiang Shibao (01057) follows with a premium rate of 347.33%, H-share at 5.810 HKD and A-share at 21.7 CNY [1] - Sinopec Oilfield Service (01033) ranks third with a premium rate of 304.44%, H-share at 0.900 HKD and A-share at 3.04 CNY [1] Group 2: Bottom AH Premium Rates - Contemporary Amperex Technology (03750) has the lowest AH premium rate at -13.97%, with H-share priced at 513.500 HKD and A-share at 368.82 CNY [1] - China Merchants Bank (03968) has a premium rate of -3.80%, H-share at 49.220 HKD and A-share at 39.53 CNY [1] - Heng Rui Medicine (01276) shows a minimal premium rate of -0.35%, with H-share at 69.050 HKD and A-share at 57.45 CNY [1] Group 3: Top Deviation Values - Sinopec Oilfield Service (01033) leads in deviation value at 26.29%, indicating a significant difference from its average premium rate [1] - Beijing Jingcheng Machinery Electric (00187) has a deviation value of 22.66% [1] - Longpan Technology (02465) ranks third with a deviation value of 19.24% [1] Group 4: Bottom Deviation Values - Junda Co., Ltd. (02865) has the lowest deviation value at -66.46%, indicating a substantial drop from its average premium rate [1] - Zhejiang Shibao (01057) follows with a deviation value of -42.67% [1] - Yangtze Optical Fibre and Cable (06869) shows a deviation value of -33.26% [1]