Investment Rating - The industry investment rating is maintained as "Positive" [5] Core Viewpoints - The export volume of excavators accelerated in November, indicating an increase in industry prosperity. The total export of crawler excavators reached 27,752 units, with a total value of 872 million USD, reflecting a year-on-year increase of 52.36% and 26.67% [8] - The growth in export volume is primarily structural, showcasing the enhanced competitiveness of China's construction machinery, which is expected to improve future export certainty. The significant contribution from the export of used machinery is anticipated to stabilize or increase the utilization rate of domestic equipment, supporting long-term healthy growth in the industry [3][8] - The market's expectations for industry health improvement are likely to rise, leading to a decrease in risk assessment, which is favorable for mid-cap blue-chip investment opportunities [3] Summary by Relevant Sections - **Export Performance**: In November, the export volume of excavators exceeded 50% growth, surpassing the cumulative growth rate of 35% from January to November. The demand from export countries showed volatility, but the overall growth rate remained resilient, indicating a strengthening of China's engineering machinery competitiveness [8] - **Used Machinery Export Impact**: The customs statistics indicate that the export of excavators is higher than the industry association's statistics, with significant contributions from used machinery exports. This trend is expected to lead to a decrease in domestic excavator ownership, which will stabilize or increase utilization rates, benefiting long-term industry growth [8] - **Investment Opportunities**: The report identifies several investment opportunities in the sector, including companies such as Zoomlion (000157, Buy) and others that are not rated [3]

工程机械 2026 年度策略：国内外共振向上，重点关注海 外行业景气度复苏 20251202 摘要 2025 年前三季度工程机械板块收入增速超 10%，显著高于 2023 和 2024 年，主要得益于三季度国内 FY 收入端明显反转并实现正增长，利 润方面，净利率提高约一个百分点，经营杠杆提升盈利能力。 三一重工、徐工股价至 2025 年 10 月底涨幅接近 40%，三一重工受益 于国内业务毛利率提升，徐工受益于股权激励及矿山业务估值提升，中 联重科与柳工表现与自身利润增速匹配。 2026 年小型挖掘机销量预计保持 20%以上增速，受益于中央特别国债 资金支持的小型水利项目需求，中大型设备销量依赖地产复苏及西部大 基建等项目进度，总体预计明年挖掘机总销量增速约为 10-15%。 国债发行情况及地方政府专项债使用方向影响工程机械市场，新增万亿 特别国债支撑小型设备需求，但专项债多用于偿还旧账，限制中大型设 备需求，地产复苏与大基建项目进度对中大型设备有拉动效应。 预计 2026 年国内挖掘机市场与 2025 年相当或有所提升，长期来看， 机器替代人工趋势明显，中国挖掘机销量有望达到 40 万至 50 万台。 Q ...

来源：@央视财经微博 【2024年#中国工程机械出口破500亿美元# 三一重工董事长向文波：#中国工程机械随处可见#】中国工程机械企业出海多年后，出口额于2024年突破500亿美元大关，整个"十四五"期间增长 ...

Core Insights - The company, Shanhe Intelligent, has successfully developed and exported its largest tonnage vertical lift crawler skid steer loader, SWT5238, to the North American market, marking a significant achievement in its international sales [1][2] - The SWT5238 weighs 5.375 tons and is the first 100-horsepower vertical lift crawler skid steer loader in China, featuring a completely new design in various aspects including structure, appearance, and control systems [1] - The loader boasts a maximum lift height of 3361 mm, a maximum load capacity of 1500 kg, and a maximum output flow rate of 150 liters per minute, showcasing its superior operational performance [1] Product Features - The loader incorporates an electric control auxiliary hydraulic system, enhancing engine power efficiency and integrating multiple auxiliary driving functions, which improves overall operational performance while reducing driver workload [2] - It features a rear-mounted independent cooling system that supports motor temperature regulation and reverse blowing functions, achieving a balance between cooling performance and noise control, thus optimizing engine performance [2] - The innovative upward-opening door design enhances operational convenience and emergency safety, allowing operators to open and close the door freely regardless of the boom position [1]

Group 1: Zhonglian Heavy Industry Performance - Zhonglian Heavy Industry's stock rose over 4% following the release of its interim results, reaching HKD 6.73 with a trading volume of HKD 23.89 million [1] - As of June 30, 2025, the company's total assets amounted to RMB 129.26 billion, an increase of RMB 5.55 billion (4.49%) compared to December 31, 2024 [1] - The operating revenue for the period was RMB 24.85 billion, reflecting an increase of RMB 320 million (1.30%) year-on-year [1] - The profit attributable to shareholders was RMB 2.75 billion, up RMB 472 million (20.69%) from the same period last year [1] - Earnings per share were RMB 0.32, and the interim dividend declared was RMB 0.20 per share [1] Group 2: Guojin Securities Insights - In the first half of the year, the company's overseas revenue reached RMB 13.81 billion, a year-on-year increase of 14.7%, accounting for 55.6% of total revenue, up 6.5 percentage points [2] - The gross profit margin for overseas operations was 31.4%, exceeding domestic margins by 7.3 percentage points [2] - The company's net profit margin attributable to shareholders for H1 2025 was 11.1%, an increase of 1.8 percentage points year-on-year [2] - Regionally, Africa saw a growth of over 179% year-on-year, while the Middle East, Southeast Asia, and Australia/New Zealand maintained rapid growth, with emerging markets accounting for 39% of sales [2] - With the EAME region's growth turning positive and a narrowing decline in North America, the company anticipates an improvement in export growth in the second half of the year [2]

Summary of Conference Call Records Industry Overview - The excavator market in July exceeded expectations for both domestic and international sales, with a strong upward cycle observed in both markets [1] - The domestic excavator market is experiencing structural optimization, with an increased demand for medium and large excavators, leading to enhanced profit elasticity [1][2] - The overall engineering machinery sector is characterized by a robust profit pool, presenting high investment value [2] Key Insights - **Domestic Market Dynamics**: - The demand for small excavators is supported by central government funding for water conservancy projects and high-standard farmland construction, with a significant increase in fixed asset investment in the water management sector [1][7] - Medium and large excavators are affected by the slow issuance of local government special bonds, leading to a cautious outlook for the next 3-5 years [1][8] - The relationship between excavator sales and stock prices is significant, with stock prices influenced by sales trends despite the limited impact of sales on overall profits [3] - **Sales and Inventory Trends**: - There is a notable divergence between sales and operating hours, primarily due to the increased share of small excavators and low operating rates for medium and large excavators [4] - Dealer inventory levels have been low, around 1.5 to 2 months, leading to a replenishment phenomenon in July, which supported sales [6] - **Future Demand Projections**: - The demand for small excavators is expected to remain strong as long as government policies are clear and funding is in place [7] - The medium and large excavator market may rely heavily on policy guidance and support in the coming years [8] Export Performance - Excavator exports are projected to grow by 10%-15% for the year, with strong performance noted in Africa, Indonesia, and the Middle East [1][10] - The total export value for excavators is expected to reach approximately 7-8 billion RMB, with a year-on-year growth of 60% [11] - The demand structure in key regions has improved, with medium and large excavators making up a significant portion of exports [11] Non-Excavator Segment - The non-excavator segment has shown good profit release, with improvements in export structure and a narrowing decline in certain product categories [9] - The overall trend for cranes and other lifting equipment remains positive, with a significant market share held by Chinese brands [13] Investment Recommendations - The focus for stock selection this year is on leading companies such as SANY and XCMG, which are expected to have greater profit elasticity in an upward cycle [15] - Other recommended companies include Liugong, Zoomlion, and Shantui, which are seen as having potential for growth but may not match the profit realization of the leading firms [15]

Group 1 - In July, domestic excavator manufacturers sold 17,138 units, a year-on-year increase of 25.2%, with domestic sales of 7,306 units (up 17.2%) and exports of 9,832 units (up 31.9%) [1] - From January to July, a total of 137,658 excavators were sold, representing a year-on-year growth of 17.8%, with domestic sales of 72,943 units (up 22.3%) and exports of 64,715 units (up 13%) [1] - The domestic excavator industry is expected to maintain steady growth over the next three years, driven by improved fixed asset investment and a new growth cycle [1] Group 2 - The export trend for construction machinery is positive, with opportunities arising from increased demand in Southeast Asia, Africa, and the Middle East, as well as improved penetration in high-end markets in Europe and the US [2] - Since March, monthly excavator export volumes have consistently exceeded those of the same months in 2023 and 2024, indicating a strong export performance [2] - The core component supplier, Hengli Hydraulic, is expanding its international strategy and has seen good performance in both direct and indirect exports due to clear growth in overseas demand [2][3] Group 3 - The domestic construction machinery industry is benefiting from increased orders for excavators and cranes in Europe, with significant demand in Southeast Asia and the Middle East due to rapid infrastructure and real estate development [3] - The overall export trend is favorable, supported by improved competitiveness of domestic brands and a recovering market [3] - The excavator industry is expected to see annual exports of approximately 100,000 to 120,000 units over the next three years [3] Group 4 - The replacement demand for excavators is projected to support sales growth, with a compound growth rate of around 30% expected in the coming years [4] - The industry has been experiencing continuous growth since 2024, driven by major infrastructure projects and increased orders for components [4][5] - Large and small excavators have shown strong sales, while medium-sized excavators are experiencing weaker growth [5] Group 5 - The mining sector is expected to drive the recovery of large excavator sales, with fixed asset investment in mining projected to grow by 10.5% in 2024 [5] - A significant hydropower project with an investment of approximately 1.2 trillion yuan has commenced, which is expected to generate substantial demand for construction machinery [5][6] - The construction environment of the hydropower project may lead to increased demand for electric and unmanned equipment, enhancing overall industry profitability [6]

Summary of the Conference Call on Engineering Machinery Industry Industry Overview - The conference focused on the engineering machinery industry, particularly in China and its overseas markets, discussing sales trends, demand forecasts, and market dynamics for 2025 [1][3][9]. Key Points and Arguments Sales Growth and Demand - In the first half of 2025, sales of excavators and loaders are expected to grow by 20%-30% year-on-year, driven by policy goals [1][3]. - However, from January to July 2025, excavator demand remained flat compared to the previous year, with an estimated total sales of approximately 85,000 units, lower than industry association statistics [1][3]. - A slowdown in sales is anticipated from August to October, with a potential slight increase in November and December [1][3]. Equipment Utilization Rates - Domestic equipment utilization rates are low, with small equipment at about 70%, large equipment between 60%-70%, and medium equipment at 45% [1][4]. - Overall, China's engineering machinery equipment utilization remains in the 50%-60% range, with many new devices still in inventory or exported [1][4]. Replacement Cycle Trends - The replacement cycle for engineering machinery is evolving, with mining equipment typically replaced every 2.5-3.5 years and road and municipal equipment every 6-8 years [1][5]. - The impact of the Ministry of Housing and Urban-Rural Development's scrapping policy is minimal due to high inventory levels and sufficient production capacity [1][5][6]. Export Performance - In July 2025, China's engineering machinery exports exceeded expectations, with a year-on-year increase of over 30%, driven by strong demand in emerging markets [1][9]. - The overseas sales accounted for 54.7% of total sales from January to July 2025, with significant contributions from regions like South Asia, the Middle East, and Latin America [1][10]. Regional Market Dynamics - North America, Asia-Pacific, the Middle East, South Asia, and South America showed strong year-on-year growth rates, with South Asia exceeding 70% [1][11]. - Conversely, markets in Australia, Russia, and Indonesia experienced declines, with Indonesia's demand affected by policy changes and project delays [1][12][11]. Challenges for Chinese Brands - Chinese brands face challenges in overseas markets, including inadequate service and inconsistent dealer quality, which complicates after-sales service and product quality control [1][19]. - The aftermarket for original parts is weak, with about 90% of customers opting for aftermarket parts instead of original ones, impacting profitability [1][15]. Future Outlook - Large domestic projects like the Yalong River Hydropower Station and the New Tibet Railway are expected to positively impact the engineering machinery industry, although project initiation may take time [1][17][18]. - The overall outlook for the overseas market remains optimistic, particularly in emerging regions, despite challenges in mature markets like Europe and North America [1][21]. Additional Important Insights - The second-hand market for machinery is active, with many customers upgrading to larger equipment rather than replacing due to age or failure [1][7]. - The engineering machinery market in Southeast Asia is competitive, with varying market shares for Chinese brands across different countries [1][13][14]. - The demand for engineering machinery in the Russian market has not shown significant recovery, and the market share of Chinese brands remains low [1][22].

Core Viewpoint - The report from China Galaxy Securities indicates that while there is a short-term fluctuation in demand for construction machinery due to seasonal factors, the medium to long-term outlook remains positive driven by replacement demand, government special bonds, urban renewal initiatives, and support for rural housing improvements [1][4]. Group 1: Domestic Sales and Exports - In May, domestic sales of excavators decreased by 1.48%, while exports showed a positive growth of 5.4% [1]. - Total excavator sales from January to May reached 101,716 units, marking a year-on-year increase of 17.4%, with domestic sales up by 25.7% [1]. - In May, the sales of loaders reached 10,535 units, a year-on-year growth of 7.24%, with domestic sales increasing by 16.7% [1]. Group 2: Market Trends and Performance - The overall export value of China's construction machinery in April was $5.152 billion, reflecting a year-on-year growth of 12.7% [3]. - From January to April, the total export value reached $18.07 billion, an increase of 9.0% year-on-year [3]. - Exports to Africa and South America maintained high growth rates, with increases of 45% and 15% respectively, while exports to Europe saw a significant decline of 15% [3]. Group 3: Equipment Types and Utilization Rates - The small excavators continue to show higher growth rates compared to medium and large excavators in domestic sales, although the gap narrowed in April [1]. - The average working hours for major construction machinery in May were 84.5 hours, a decrease of 3.86% year-on-year [2]. - The electrification rate for forklifts reached 77% in April, with domestic sales showing a slight decline [2].