Investment Rating - The report does not explicitly state an investment rating for the industry, but it suggests a positive outlook for specific companies such as Yituo Co., Ltd. and Yingliu Co., Ltd. based on their performance and market conditions [11][25]. Core Insights - The SW Machinery Equipment Index increased by 4.07% over the last week, ranking 12th among 31 primary industry categories, while the Shanghai and Shenzhen 300 Index rose by 1.08% [13][16]. - Year-to-date, the SW Machinery Equipment Index has risen by 14.04%, ranking 9th among the 31 primary industry categories, compared to a 1.74% increase in the Shanghai and Shenzhen 300 Index [16]. - John Deere's Q1 2026 earnings exceeded expectations, with a 24% year-on-year revenue growth in its small agricultural and turf business, indicating a robust recovery in the global agricultural machinery market [25]. - Global gas turbine orders have exceeded expectations, with significant order growth reported by major manufacturers, indicating a tightening capacity in the industry [25][52]. Summary by Sections 1. Stock Portfolio - Recommended stocks include Yituo Co., Ltd., Yingliu Co., Ltd., and Jereh Co., Ltd. [11]. 2. Market Review - The SW Machinery Equipment Index increased by 4.07% in the last week, ranking 12th among 31 primary industry categories [13]. - Year-to-date performance shows a 14.04% increase in the SW Machinery Equipment Index, ranking 9th among the primary industry categories [16]. 3. Core Insights Update - The report highlights the recovery in the agricultural machinery market and the growth in gas turbine orders, indicating positive trends in these sectors [25][52]. 4. Key Data Tracking 4.1 General Machinery - The general machinery sector is under pressure, with a January PMI of 49.3%, indicating a need for observation regarding recovery trends [24]. - Forklift sales in January 2026 reached 141,743 units, a 51.4% year-on-year increase [24]. 4.2 Engineering Machinery - The engineering machinery sector is experiencing accelerated growth, with excavator sales in January 2026 totaling 18,708 units, a 49.5% year-on-year increase [35]. 4.3 Railway Equipment - The railway equipment sector shows steady growth, with fixed asset investment maintaining around 6% growth since 2025 [44]. 4.4 Shipbuilding - The shipbuilding sector is experiencing a slowdown, with the global newbuilding price index at 184.29, down 2.7% year-on-year [46]. 4.5 Oilfield Equipment - The oilfield equipment sector is stabilizing at the bottom, with high activity in natural gas development in the Middle East [46]. 4.6 Gas Turbines - The gas turbine sector is seeing robust growth, with GEV reporting a 47.5% year-on-year increase in new orders [52].

Investment Rating - The report does not explicitly state an investment rating for the industry but suggests a positive outlook for specific companies within the machinery sector [10]. Core Insights - The global construction machinery cycle is on an upward trend, with domestic and export sales of excavators exceeding expectations. In January 2026, a total of 18,708 excavators were sold, representing a year-on-year increase of 49.5%. Domestic sales were 8,723 units (+61.4%), and exports were 9,985 units (+40.5%) [4][30]. - The report highlights the increasing frequency of global rocket launches, emphasizing the importance of the commercial space rocket supply chain, including engines and 3D printing technologies [4]. - Tesla's upcoming third-generation robot is anticipated to boost the sector's performance in the spring, with key companies expected to benefit from this development [4]. - The report categorizes the industry performance indicators as follows: General Machinery (continuing pressure), Engineering Machinery (accelerating upward), Shipbuilding (downward trend slowing), Oilfield Equipment (bottoming out), Railway Equipment (steady upward), and Gas Turbines (steady upward) [4]. Summary by Sections Market Review - The SW Machinery Equipment Index rose by 0.38% during the week of February 2-6, 2026, ranking 11th among 31 primary industry categories. Year-to-date, the index has increased by 6.72%, ranking 9th, while the CSI 300 Index rose by 0.29% [12][14]. Key Data Tracking - General Machinery: The PMI for January was 49.3%, indicating a contraction. Forklift sales in December 2025 were 111,363 units, with domestic sales down by 5.17% [21]. - Engineering Machinery: The sector is experiencing accelerated growth, with January excavator sales significantly exceeding expectations [30]. - Railway Equipment: The sector shows steady growth, with fixed asset investment maintaining around 6% since 2025 [39]. - Shipbuilding: The new ship price index as of January 2026 was 184.29, reflecting a year-on-year decrease of 2.7% [41]. - Oilfield Equipment: The sector is stabilizing, with high activity in natural gas development in the Middle East [42]. - Industrial Gases: Demand is expected to rise as raw material prices decline and downstream operating rates improve [44]. - Gas Turbines: The global market for gas turbines is showing robust growth, with new orders increasing by 47.5% year-on-year [46].