Investment Rating - The report maintains a "Recommended" rating for key companies in the engineering machinery sector, including Sany Heavy Industry, XCMG, Zoomlion, Shantui, Hengli Hydraulic, LiuGong, and Construction Machinery [3][11]. Core Insights - The engineering machinery industry is expected to experience a V-shaped recovery in 2026, driven by both domestic and international demand, with a focus on structural optimization [11]. - Domestic excavator sales are projected to grow by 18% in 2025, with a notable increase in the sales of small excavators, while the overall market is expected to recover significantly in 2026 [7][19]. - Internationally, sales in Asia, Africa, and Latin America are expected to see double-digit growth, while Europe and North America are anticipated to turn positive, indicating a broad recovery in overseas markets [43][62]. Summary by Sections Domestic Market - The domestic market for excavators and non-excavators is showing signs of recovery, with a clear upward trend expected in 2026. The sales of excavators are projected to reach 23.5 million units in 2025, with a year-on-year growth of 17% [7][19]. - The sales structure is expected to improve, with small excavators leading the growth, followed by medium and large excavators [19][24]. International Market - The overseas market is projected to account for approximately 50% of excavator sales in 2025, with a total of 117,000 units sold, reflecting a year-on-year growth of 16% [43][62]. - The report highlights the significant potential for growth in international markets, particularly in North America, where a decline in interest rates and a return of manufacturing are expected to boost demand [43][46]. Investment Recommendations - The report suggests focusing on leading companies such as Sany Heavy Industry, XCMG, Zoomlion, Shantui, Hengli Hydraulic, LiuGong, and Construction Machinery, which are well-positioned to benefit from the anticipated recovery in both domestic and international markets [11][62].

Core Viewpoint - The article highlights the recovery trend in China's construction machinery industry, with significant growth in export figures and an overall positive outlook for the sector in early 2026 [1][2][6]. Import and Export Data - In January 2026, China's construction machinery import and export trade amounted to $5.762 billion, a year-on-year increase of 17%, with imports at $206 million (up 5.53%) and exports at $5.556 billion (up 17.5%) [1]. - In February 2026, the total trade reached $5.31 billion, a year-on-year increase of 51.6%, with imports at $180 million (down 18.9%) and exports at $5.13 billion (up 56.3%) [2]. - Cumulatively, from January to February 2026, the trade totalled $11.072 billion, a year-on-year increase of 31.4%, with imports at $386 million (down 7.46%) and exports at $10.686 billion (up 33.4%) [2]. Domestic Market Performance - The export value in January 2026 was 39.206 billion yuan, a year-on-year increase of 15.4%, while in February it was 35.875 billion yuan, a year-on-year increase of 52.1% [4]. - The cumulative export value for January and February 2026 reached 75.081 billion yuan, reflecting a year-on-year growth of 30.4% [4]. Industry Trends and Insights - The construction machinery industry is showing signs of recovery, with improved operating rates in February and expectations of a warmer market outlook [6][12]. - The industry is transitioning to the "National IV" emission standards starting December 1, 2026, which may impact product offerings and market dynamics [6]. - There is a notable increase in exports despite a continuous decline in domestic sales for 13 months, indicating a potential shift in market focus [6]. Expert Opinions - Industry leaders emphasize the importance of supporting the transition to new energy in construction machinery and integrating AI technologies into operations [13].

Core Viewpoint - The construction machinery industry in China is experiencing mixed performance in February 2026, with significant declines in domestic sales across various equipment types, while exports show growth in some categories [1][2][3][4][5][6][7][8][9][10][11][12][13][14][15][16][17][18][19]. Excavator Sales - In February 2026, a total of 17,226 excavators were sold, representing a year-on-year decline of 10.6%. Domestic sales were 6,755 units (down 42%), while exports reached 10,471 units (up 37.2%) [1][2]. - Cumulative sales for January-February 2026 totaled 35,934 units, with domestic sales at 15,478 units (down 9.19%) and exports at 20,456 units (up 38.8%) [2]. Loader Sales - February 2026 saw sales of 9,540 loaders, a year-on-year increase of 9.28%. Domestic sales were 3,863 units (down 14.3%), while exports were 5,677 units (up 34.4%) [3][4]. - Cumulative sales for January-February 2026 reached 21,299 units, with domestic sales at 9,156 units (up 11.5%) and exports at 12,143 units (up 43.9%) [4]. Grader Sales - In February 2026, 679 graders were sold, marking a year-on-year increase of 6.93%. Domestic sales were 96 units (down 14.3%), while exports were 583 units (up 11.5%) [5]. Crane Sales - February 2026 recorded sales of 1,460 truck cranes, down 11.8% year-on-year. Domestic sales were 729 units (down 26%), while exports were 731 units (up 8.94%) [7]. - Cumulative sales for January-February 2026 totaled 3,090 units, with domestic sales at 1,550 units (up 2.38%) and exports at 1,540 units (up 9.3%) [7]. Forklift Sales - In February 2026, 30,999 forklifts (excluding electric walk-behind vehicles) were sold, down 30.2% year-on-year. Domestic sales were 17,053 units (down 43.4%), while exports were 13,946 units (down 2.5%) [13]. - Cumulative sales for January-February 2026 reached 81,877 units, down 2.49% year-on-year, with domestic sales at 48,639 units (down 13.9%) and exports at 33,238 units (up 21.1%) [13]. Roller Sales - February 2026 saw sales of 1,208 rollers, down 2.27% year-on-year. Domestic sales were 287 units (down 40.9%), while exports were 921 units (up 22.8%) [14]. Paver Sales - In February 2026, 92 pavers were sold, down 8% year-on-year. Domestic sales were 47 units (down 33.8%), while exports were 45 units (up 55.2%) [15]. Aerial Work Platform Sales - February 2026 recorded sales of 9,784 aerial work platforms, down 10.1% year-on-year. Domestic sales were 1,672 units (down 63.7%), while exports were 8,112 units (up 29.3%) [17]. High-altitude Work Vehicle Sales - In February 2026, 230 high-altitude work vehicles were sold, down 51.4% year-on-year. Domestic sales were 219 units (down 50.5%), while exports were 11 units (down 64.5%) [19].

Investment Rating - The industry investment rating is "Overweight" indicating a positive outlook for the engineering machinery sector [2][4]. Core Insights - The engineering machinery industry shows an upward trend in sales, with a total of 17,226 excavators sold in February 2026, a year-on-year decrease of 10.6%. However, the cumulative sales for January-February 2026 reached 35,934 units, reflecting a year-on-year increase of 13.1% [2][4]. - Exports have significantly exceeded market expectations, with excavator exports in February 2026 increasing by 37.2% year-on-year, and cumulative exports for January-February 2026 growing by 38.8%. Exports accounted for 60.8% of total sales in February, marking a historical high [2][4]. - Domestic sales saw a decline of 42% in February 2026, attributed to the timing of the Spring Festival, rather than a weakening demand. The actual demand remains resilient when adjusted for working days [4]. - The report anticipates a synchronization of domestic and international sales, with a potential surge in domestic demand as the traditional construction season begins in March 2026 [4]. - The report highlights key investment opportunities in the engineering machinery sector, focusing on major manufacturers such as SANY Heavy Industry, XCMG, Zoomlion, LiuGong, and Shantui, as well as component suppliers like Hengli Hydraulic, Aidi Precision, Fushite, and Weiman Sealing [4]. Summary by Sections Sales Performance - In February 2026, a total of 17,226 excavators were sold, down 10.6% year-on-year. Domestic sales were 6,755 units, down 42%, while exports reached 10,471 units, up 37.2% [2][4]. - Cumulative sales for January-February 2026 were 35,934 units, with domestic sales at 15,478 units (down 9.19%) and exports at 20,456 units (up 38.8%) [2][4]. Market Dynamics - The engineering machinery industry is experiencing a recovery trend, with strong export growth and resilient domestic demand expected to drive future performance [4]. - The report notes that the current domestic industry cycle resembles the upward phase of the 2017-2018 renewal cycle, suggesting a robust recovery ahead [4]. Investment Opportunities - The report identifies key companies for investment consideration, including SANY Heavy Industry, XCMG, Zoomlion, LiuGong, and Shantui for main machinery, and Hengli Hydraulic, Aidi Precision, Fushite, and Weiman Sealing for components [4].

Core Viewpoint - The excavator market in China is experiencing a significant decline in domestic sales while exports are showing strong growth, indicating a potential shift in market dynamics [1][2]. Sales Data Summary - In February 2026, a total of 17,226 excavators were sold, representing a year-on-year decrease of 10.6%. Domestic sales accounted for 6,755 units (including 19 electric excavators), down 42% year-on-year, while exports reached 10,471 units (including 16 electric excavators), up 37.2% [1][2]. - Cumulative sales for January and February 2026 totaled 35,934 units, reflecting a year-on-year increase of 13.1%. Domestic sales were 15,478 units (including 43 electric excavators), down 9.19%, while exports were 20,456 units (including 27 electric excavators), up 38.8% [2]. Historical Context - In January 2026, domestic excavator sales were 8,723 units, showing a significant year-on-year increase of 61.4% [4]. - The domestic market has faced continuous declines over the past months, with notable drops in sales figures from previous years, particularly in 2023 where sales were down significantly compared to 2022 [5]. Market Dynamics - The excavator industry is expected to see improvements in operational rates as of February, with a general optimistic outlook for the engineering machinery sector [6][10]. - The transition to "National IV" standards starting December 1, 2026, is anticipated to impact the market positively [6]. Expert Insights - Industry leaders are discussing the need for support in the transition to new energy solutions for engineering machinery and commercial vehicles, indicating a shift towards sustainability in the sector [10].

Core Viewpoint - The loader market in China shows mixed performance in February 2026, with domestic sales declining while exports significantly increased, indicating a potential shift in market dynamics [2][3]. Sales Data Summary - In February 2026, a total of 9,540 loaders were sold, representing a year-on-year growth of 9.28%. Domestic sales accounted for 3,863 units, a decline of 14.3%, while exports reached 5,677 units, marking a growth of 34.4% [2][3]. - Cumulatively, from January to February 2026, 21,299 loaders were sold, reflecting a year-on-year increase of 27.9%. Domestic sales totaled 9,156 units (up 11.5%), and exports were 12,143 units (up 43.9%) [3]. Market Trends - The loader market is experiencing a divergence between domestic and export sales, with domestic sales facing challenges while exports are thriving, suggesting a potential recovery in the engineering machinery sector [9].

Core Viewpoint - The construction machinery industry is showing signs of recovery, with improvements in average working hours and operating rates for major products in February 2026 compared to the previous year, despite some month-on-month declines [3][5]. Group 1: Working Hours and Operating Rates - In February 2026, the average working hours for major construction machinery products was 55 hours, an increase of 18.6% year-on-year but a decrease of 24.1% month-on-month [3]. - Specific working hours for key machinery include: - Excavators: 48.2 hours - Loaders: 69.9 hours - Truck Cranes: 66.8 hours - Crawler Cranes: 105 hours - Tower Cranes: 20 hours - Rollers: 23.1 hours - Pavers: 37.9 hours - Rotary Drilling Rigs: 50.2 hours - Off-road Mining Dump Trucks: 76.5 hours - Concrete Pump Trucks: 21.9 hours - Concrete Mixers: 22.2 hours - Forklifts: 82.1 hours [4]. - The overall operating rate for the industry in February 2026 was 35.9%, a decrease of 8.63 percentage points year-on-year and a decline of 12.2 percentage points month-on-month [5]. Group 2: Industry Trends and Expectations - The construction machinery industry is anticipated to be on a recovery path, with expectations of improved performance as indicated by the increase in working hours and operating rates [8]. - The transition to "National IV" emissions standards is set to begin on December 1, 2026, which may further influence industry dynamics [8]. - There is a notable increase in domestic demand expectations, supported by a strong start to credit in January, suggesting a potential thaw in the market for construction machinery [10].

Core Viewpoint - The article highlights the successful participation of Zoomlion at the CONEXPO-CON/AGG 2026 in Las Vegas, showcasing its advanced machinery and digital solutions tailored for the North American market, leading to product deliveries and multiple cooperation agreements on the first day of the exhibition [1][11]. Product Highlights - Zoomlion presented a range of products including the ZRT1500V6 rough-terrain crane, designed specifically for the North American market, featuring a 198.5-foot main arm capable of lifting 2,600 pounds and a transport weight of 108,000 pounds, enhancing operational efficiency [4][11]. - The company showcased various earthmoving machinery, including the ZE55GU and ZE145GU mini excavators, and the ZE500G excavator, which is equipped with a 400-horsepower engine and advanced cooling systems for improved maintenance in dusty environments [5][11]. - A concrete pump truck with a maximum vertical reach of 151 feet and a theoretical output of 180 cubic meters per hour was also displayed, utilizing carbon fiber technology to reduce weight by 25% and increase payload capacity [8][10]. Localization Strategy - Zoomlion emphasized its commitment to localization, having established multiple operational hubs in North America, including Milwaukee and Houston, to enhance its R&D, manufacturing, sales, and service capabilities [13][15]. - The company aims to create greater value for customers and partners through localized operations and customized products, responding more effectively to market demands [15][16]. Industry Context - The article notes a potential recovery in the engineering machinery industry, with improved operating rates and a significant increase in exports, indicating a positive outlook for the sector [17][22]. - The transition to "National IV" emissions standards starting December 1 is also highlighted as a significant development for the industry [17].

Core Viewpoint - LiuGong showcased 13 equipment models at the CONEXPO-CON/AGG 2026 in Las Vegas, emphasizing comprehensive solutions for urban construction, quarrying, mining, and large infrastructure projects [1]. Group 1: Electric Solutions - Key electric models displayed include the 922FE excavator and 870HE and 820TE loaders, highlighting LiuGong's expanding electric product lineup in the Americas. These machines can reduce operational costs by over 40% through simplified maintenance and fewer wear parts [5]. - LiuGong's electric equipment has been deployed in over 60 countries, with cumulative sales exceeding 60,000 units [5]. Group 2: Fuel-Powered Solutions - LiuGong presented the 952F excavator and 856T loader, designed for high-intensity operations in quarrying and large infrastructure projects. These models are equipped with Cummins Tier 4 Final / Stage V engines, ensuring durability and stable performance in remote and complex conditions [7]. Group 3: Precision Construction Equipment - The 4215D grader and 6608F roller were showcased, emphasizing LiuGong's technological advantages in construction precision and quality control. Their high-precision leveling systems and integrated compaction technology help reduce rework costs and improve project efficiency [9]. Group 4: Integrated Product and Service System - The addition of the TD16N bulldozer completes LiuGong's main earthmoving equipment lineup. A unified remote information management and fault diagnosis system allows standardized monitoring and service support across different models, simplifying equipment management for customers [11]. Group 5: Customer Engagement - LiuGong launched a live podcast at booth F18033, inviting customers and dealers to share experiences with LiuGong equipment, focusing on performance, reliability, and business development [13]. Group 6: Strategic Partnerships - LiuGong North America held a dealer conference prior to the exhibition, discussing industry trends and future strategies, which strengthened partnerships and laid a solid foundation for market expansion [16]. Group 7: Market Commitment - LiuGong held a media conference on March 2, attracting nearly 50 industry media representatives. Company leaders shared the latest strategies and reaffirmed their long-term commitment to the local market, aiming to meet diverse needs from zero-emission urban construction to heavy-duty quarrying [18].

Core Viewpoint - XCMG is showcasing its comprehensive solutions at CONEXPO-CON/AGG 2026, emphasizing its deep understanding of the North American market and its commitment to localized development [2][10]. Group 1: Exhibition Highlights - XCMG's exhibition area spans nearly 2,500 square meters, featuring 35 star products tailored for the North American market, covering key scenarios such as earthmoving, lifting, aerial work, and mining [3]. - The company aims to demonstrate its full coverage capability across the entire value chain, from earthmoving to mining, through a profound understanding of local conditions, standards, and business models [5]. Group 2: Technological Innovations - XCMG will showcase the results of its intelligent technology implementation, providing North American customers with tangible and quantifiable efficiency improvements [7]. - A special area will be dedicated to demonstrating quick-change attachments, where a skid steer loader will switch between four different attachments, and an excavator will showcase a complete set of five operational processes, highlighting the multifunctionality of XCMG equipment [9]. Group 3: Localization Strategy - XCMG is committed to deepening its localized development, creating a platform for in-depth communication with global customers and partners. The company aims to transition from merely exporting products to building an ecosystem rooted in local markets [10]. Group 4: Industry Trends - The engineering machinery industry is showing signs of recovery, with improved operating rates in February and a significant increase in exports, up over 70% [11]. - The industry is expected to benefit from a shift to "National IV" standards starting December 1, which may further stimulate demand [11].