Core Viewpoints - The mechanical industry is expected to outperform the market, with a focus on high-quality leading companies and structural growth opportunities [15][5][24] - The industry is undergoing a transformation driven by domestic upgrades, self-sufficiency, and accelerated overseas development [15][20] Industry Overview and Outlook - The core equipment localization is fundamental for the rise of the industry, breaking through bottlenecks in high-end equipment is essential for true autonomy and industrialization [15] - The trend of industrial upgrading is inevitable, with advancements in digitalization and energy transformation enhancing social efficiency and reducing costs [15] - The development of exports is transitioning from point to surface, with competitive manufacturing enterprises moving from import substitution to export substitution [15] Investment Strategy - The report recommends focusing on emerging growth sectors and export-driven leading companies, particularly in areas such as humanoid robots, AI infrastructure, and coal chemical equipment [25][26] - Key recommended stocks include Huace Testing, Guodian Measurement, and Yizhiming, among others [24][2] Key Recommendations - The report highlights specific companies for investment, including: - Humanoid Robots: Hengli Hydraulic, Huichuan Technology, and Zhenyu Technology [26] - AI Infrastructure: Yingliu Technology and Haomai Technology [28] - Engineering Machinery: Hengli Hydraulic, XCMG, and Sany Heavy Industry [29] - Nuclear Power Equipment: Jiadian Co., Zhongmi Holdings, and Jiangsu Shentong [29] - General Equipment: Huichuan Technology, Green Harmonic, and Baichu Electronics [29] Performance Tracking - In June, the mechanical industry index rose by 2.82%, outperforming the CSI 300 index by 0.32 percentage points, with stable valuation levels [6][11] - The manufacturing PMI index for June was reported at 49.70%, indicating a slight improvement [6][12] Financial Projections - The report provides forecasts for key companies, indicating resilience in operations, with expected revenue and profit growth across various sectors [31] - For example, Hengli Hydraulic is projected to achieve a revenue of 27.68 billion yuan in Q2 2025, with a net profit of 7.96 billion yuan [31]

Investment Rating - The mechanical industry is rated as outperforming the market [6] Core Viewpoints - The mechanical industry is experiencing overall stable operations, with a focus on growth sectors such as humanoid robots [1] - In 2024, the mechanical industry achieved a revenue of 24,389.96 billion yuan, a year-on-year increase of 4.97%, while the net profit attributable to the parent company was 1,291.17 billion yuan, a decrease of 12.47% [2][29] - The industry is witnessing a slight decline in profitability, with a gross margin of 23.50% and a net margin of 5.29% in 2024, both showing year-on-year decreases [2][31] Summary by Sections Industry Overview - The mechanical industry is undergoing a phase of domestic industrial upgrading and accelerated overseas development, with a focus on high-end equipment and self-sufficiency [15] - The industry is expected to benefit from the recovery of demand and continuous operational improvements [30] Revenue and Profit Analysis - In 2024, the mechanical industry saw a revenue growth of 4.97%, with quarterly revenues of 5,069.57 billion yuan in Q1, 6,214.57 billion yuan in Q2, 6,037.44 billion yuan in Q3, and 7,068.38 billion yuan in Q4 [29] - The net profit for Q1 to Q4 of 2024 was 345.43 billion yuan, 441.15 billion yuan, 385.58 billion yuan, and 119.02 billion yuan respectively, indicating fluctuations in profitability [29] Sector Performance - The semiconductor equipment, shipbuilding, and usage equipment sectors showed high revenue growth rates of 32.90%, 23.08%, and 18.76% respectively in 2024 [3] - The engineering machinery sector showed marginal improvement in Q1 2025, with revenue and profit growth rates of 10.29% and 31.52% respectively [3] Investment Recommendations - Key investment recommendations include companies such as Huace Testing, Baichu Electronics, and Yirui Technology, focusing on sectors like humanoid robots and AI infrastructure [4][23] - The report emphasizes the importance of identifying structural growth opportunities in leading companies with core competitiveness [24][27] Future Outlook - The report suggests a focus on emerging markets and export growth, particularly in sectors like humanoid robots, AI infrastructure, and coal chemical equipment [24][26] - The mechanical industry is expected to benefit from ongoing demand recovery and operational improvements, with a positive outlook for 2025 [30]