Investment Rating - The report maintains a positive investment rating for the engineering machinery industry, indicating a favorable outlook for growth [6]. Core Insights - The low-altitude economy is steadily developing, supported by various government policies aimed at enhancing infrastructure and safety in the sector [2][3]. - The engineering machinery sector is expected to continue its steady growth, with significant increases in both imports and exports, reflecting strong competitive advantages for domestic leading enterprises [3]. - The report highlights a robust performance in the mechanical equipment sector, with a notable increase in the Shanghai Composite Index and specific sub-sectors outperforming the broader market [11][12]. Summary by Sections Weekly Market Review - From October 20 to October 24, 2025, the Shanghai Composite Index rose by 2.88%, while the Shenzhen Component Index and the ChiNext Index increased by 4.73% and 8.05%, respectively. The Shenwan Mechanical Equipment Index rose by 4.71%, outperforming the CSI 300 Index by 1.47 percentage points, ranking 4th among 31 Shenwan first-level industries [11][12]. - Sub-sectors such as general equipment, specialized equipment, and engineering machinery saw increases of 4.99%, 5.48%, and 3.07%, respectively [11]. Key Sector Tracking - The report emphasizes the low-altitude economy, with the Civil Aviation Administration of China releasing regulations to support general aviation and low-altitude economic applications. The Guangdong provincial government has also introduced measures to promote high-quality development in this sector [2]. - In the mechanical equipment sector, China's engineering machinery import and export trade reached USD 5.505 billion in September 2025, marking a year-on-year increase of 29.1%, with exports growing by 29.6% [3]. Investment Recommendations - For the low-altitude economy, recommended companies include Deep City Transportation, Sujiao Science and Technology, and Wan Feng Ao Wei. In the complete machine segment, companies like Yihang Intelligent and Zongheng Co. are highlighted. Key component manufacturers include Zongshen Power and Wolong Electric Drive [4]. - In the mechanical equipment sector, recommended companies include Sany Heavy Industry, XCMG, and Anhui Heli for engineering machinery, and companies like Huazhong CNC and Kede CNC for industrial mother machines [4].

Investment Rating - The investment rating for the company is "Accumulate" (maintained) [5] Core Views - The company achieved a year-on-year increase of 26% in net profit attributable to shareholders for Q1-Q3 2025, supported by the issuance of convertible bonds to enhance cash flow [5][6] - The company is focusing on advanced projects such as oil-gas springs, autonomous driving systems, and humanoid robot lead screws, indicating a strong potential for growth in emerging markets [6] - The issuance of targeted convertible bonds aims to improve cash flow and support long-term development, with a net fundraising amount of approximately RMB 148.22 million [6] Financial Performance Summary - For 2025, the company expects revenue of RMB 779 million, a year-on-year growth of 23.87%, and net profit of RMB 141 million, a year-on-year growth of 29.57% [5][7] - The company's earnings per share (EPS) is projected to be RMB 1.19 for 2025, with a return on equity (ROE) of 21.56% [5][7] - The company’s total market capitalization is approximately RMB 5.97 billion, with a circulating market value of about RMB 3.29 billion [3][5]

Group 1 - XuGong Machinery experienced a decline of 5.19%, with a current stock price of 10.78 CNY per share and a trading volume of 1.736 billion CNY, resulting in a total market capitalization of 126.697 billion CNY [1] - The company, established on December 15, 1993, and listed on August 28, 1996, specializes in the research, manufacturing, sales, and service of various types of construction machinery, including cranes, earthmoving machinery, and high-altitude operation machinery [1] - The main revenue composition of XuGong Machinery includes earthmoving machinery (31.05%), other construction machinery and parts (28.09%), cranes (19.11%), mining machinery (8.64%), high-altitude operation machinery (8.34%), and pile machinery (4.77%) [1] Group 2 - Nord Fund has a significant holding in XuGong Machinery, with the Nord Advantage Industry Fund (010878) holding 220,500 shares, representing 4.74% of the fund's net value, making it the ninth-largest holding [2] - The Nord Advantage Industry Fund was established on March 30, 2021, with a current size of 36.1583 million CNY, and has achieved a year-to-date return of 19.69% [2] - The fund manager, Zhu Hong, has a tenure of 11 years and 213 days, with the fund's best return during this period being 152.71% and the worst return being -21.53% [3]

Group 1 - XuGong Machinery experienced a decline of 5.19% on October 27, with a stock price of 10.78 CNY per share and a trading volume of 1.757 billion CNY, resulting in a total market capitalization of 126.697 billion CNY [1] - XuGong Group Engineering Machinery Co., Ltd. was established on December 15, 1993, and listed on August 28, 1996. The company specializes in the research, manufacturing, sales, and service of various types of construction machinery and parts [1] - The main business revenue composition includes: earthmoving machinery (31.05%), other construction machinery, parts, and others (28.09%), lifting machinery (19.11%), mining machinery (8.64%), aerial work machinery (8.34%), and pile machinery (4.77%) [1] Group 2 - According to data from the top ten holdings of funds, one fund under Guotai Haitong Asset Management has a significant position in XuGong Machinery. The Guotai Junan High-end Equipment Mixed Fund A (017933) increased its holdings by 10,300 shares in the second quarter, holding a total of 103,700 shares, which accounts for 6.42% of the fund's net value [2] - The Guotai Junan High-end Equipment Mixed Fund A (017933) was established on March 1, 2023, with a latest scale of 8.0771 million CNY. Year-to-date returns are 14.63%, ranking 5199 out of 8226 in its category; the one-year return is 11.91%, ranking 5416 out of 8099; and since inception, it has a loss of 4.55% [2]

Core Viewpoint - XCMG Machinery experienced a decline of 5.19% on October 27, with a stock price of 10.78 CNY per share and a total market capitalization of 126.697 billion CNY [1] Company Overview - XCMG Group Engineering Machinery Co., Ltd. was established on December 15, 1993, and listed on August 28, 1996. The company is located in Xuzhou Economic and Technological Development Zone, Jiangsu Province [1] - The main business activities include research, manufacturing, sales, and service of various types of construction machinery and spare parts, including: - Earthmoving machinery: 31.05% - Other construction machinery, spare parts, and others: 28.09% - Lifting machinery: 19.11% - Mining machinery: 8.64% - Aerial work machinery: 8.34% - Piling machinery: 4.77% [1] Fund Holdings - Xinhua Fund has a significant holding in XCMG Machinery through its fund, Xinhua Anxiang Duoyu Flexible Allocation Mixed Fund (004982), which increased its holdings by 52,800 shares in the second quarter, totaling 791,400 shares, representing 5.96% of the fund's net value [2] - The fund has incurred an estimated floating loss of approximately 466,900 CNY as of the report date [2] - The fund was established on September 13, 2018, with a current size of 103 million CNY, achieving a year-to-date return of 17.39% and a one-year return of 31.25% [2] Fund Manager Information - The fund is managed by Zhao Qiang, Yao Haiming, and Hou Chun, with the following tenure and performance records: - Zhao Qiang: 11 years and 240 days, total fund size of 1.618 billion CNY, best return of 180.9%, worst return of -41.92% [3] - Yao Haiming: 4 years and 336 days, total fund size of 9.664 billion CNY, best return of 42.8%, worst return of 0% [3] - Hou Chun: 264 days, total fund size of 103 million CNY, best and worst return of 17.33% [3]

Group 1 - XCMG Machinery experienced a decline of 5.19% on October 27, with a stock price of 10.78 CNY per share and a trading volume of 1.736 billion CNY, resulting in a total market capitalization of 126.697 billion CNY [1] - The company, established on December 15, 1993, and listed on August 28, 1996, specializes in the research, manufacturing, sales, and service of various types of construction machinery, including cranes, earthmoving machinery, and high-altitude operation machinery [1] - The main revenue composition of XCMG includes earthmoving machinery (31.05%), other construction machinery and parts (28.09%), cranes (19.11%), mining machinery (8.64%), high-altitude operation machinery (8.34%), and pile machinery (4.77%) [1] Group 2 - The Western Benefit Fund has a significant holding in XCMG Machinery, with the Hongli ETF (159708) maintaining 951,600 shares in the second quarter, unchanged from the previous period, representing 3.27% of the fund's net value [2] - The Hongli ETF, established on June 18, 2021, has a current size of 197 million CNY, with a year-to-date return of 9.57% and a one-year return of 8.2% [2] - The fund has incurred an estimated floating loss of approximately 561,400 CNY as of the latest report [2] Group 3 - The fund managers of Hongli ETF include Tong Guolin, Zhou Ping, and Qi Wei, with Tong Guolin having a tenure of 21 years and 175 days, managing assets totaling 1.431 billion CNY, achieving a best return of 123.85% during his tenure [3] - Zhou Ping has 11 years and 217 days of experience, managing 1.462 billion CNY, with a best return of 81.64% [3] - Qi Wei has been in the role for 186 days, managing 1.214 billion CNY, with a best return of 78.16% [3]

Core Insights - The loader industry in China is experiencing a trend of increasing sales from 2020 to 2024, with a projected sales volume of 108,200 units in 2024, representing a year-on-year growth of 4.1% [2][4] - The domestic sales share of loaders has been declining from 2020 to 2023, while export sales share has been increasing; however, in 2024, domestic sales share is expected to rebound [4][9] - The loader industry is supported by a supply chain that includes upstream materials such as metals and non-metals, midstream manufacturing, and downstream applications in construction, mining, and transportation [1][4] Sales Trends - From 2020 to 2024, the domestic sales of loaders in China are expected to decline, with a forecast of 54,326 units sold in 2024, a decrease of 3.9% year-on-year; however, in the first nine months of 2025, domestic sales are projected to reach 49,996 units, marking a significant increase of 20.7% [7][9] - Export sales of loaders have shown consistent growth since 2020, with an expected export volume of 53,883 units in 2024, reflecting a year-on-year increase of 13.8%; in the first nine months of 2025, exports are projected to be 43,743 units, up by 8.3% [9][4] Market Distribution - In the first nine months of 2025, the domestic sales share of loaders is anticipated to be 53.34%, while the export sales share is expected to be 46.66%, indicating a shift in market dynamics [4][9] - The loader industry is characterized by a diverse application range, including construction, mining, transportation, and water conservancy, which drives demand across various sectors [1][4]

Core Viewpoint - Changsha has rapidly developed into a hub for advanced manufacturing, boasting multiple national and provincial-level industrial clusters, showcasing its competitive strength in the recent provincial industrial cluster competition [1][2][3]. Group 1: Industrial Cluster Development - Changsha has established 6 national-level, 10 provincial-level, and 5 provincial cultivation objects, ranking among the top provincial capitals in terms of total industrial clusters [1]. - In the recent 2025 Hunan Province industrial cluster competition, Changsha achieved a success rate of approximately 70%, with 9 out of 13 participating clusters winning [1][2]. - The city has pioneered the "chain leader system" and is building a gradient system to cultivate national-level industrial clusters, aiming for world-class status [3][19]. Group 2: Mechanisms and Strategies - The "chain leader system" integrates various support mechanisms, including financial, supply, innovation, and talent chains, forming a unique Changsha model for industrial development [8][9]. - Currently, 17 industrial chains account for over 60% of the city's large-scale enterprises, over 70% of industrial output value, and over 80% of provincial and municipal innovation platforms [10]. - The city has implemented a three-tier development system that combines top-level design, collaborative mechanisms, and industrial park support to enhance cluster cultivation [11]. Group 3: Key Industries and Achievements - Changsha is recognized as the "capital of engineering machinery," leading the industry in scale for 15 consecutive years and included as one of the three samples for world-class industrial cluster cultivation by the Ministry of Industry and Information Technology [5][15]. - The new generation of autonomous safety computing systems has emerged as a breakthrough in strategic emerging industries, with a complete local industrial chain [15][17]. - Notable industrial clusters include high-end chemical raw materials in Liuyang and CNC grinding machines in Changsha County, both recognized as national-level small and medium-sized enterprise characteristic industrial clusters [16][17]. Group 4: Future Directions - Changsha aims to transition from national-level to world-class industrial clusters, focusing on high-end, intelligent, and international development [19][20]. - The city is enhancing its innovation capabilities through the establishment of national-level innovation platforms and specialized talent teams [20][21]. - Collaborative efforts are being strengthened to create a "symbiotic and prosperous" industrial ecosystem, with various organizations coordinating to support high-quality industrial development [21][22].

Investment Rating - The report suggests a continued focus on investment opportunities in the engineering machinery sector due to strong export growth and competitive advantages [1][2]. Core Insights - Engineering machinery exports accelerated in September 2025, with a total export value of $5.271 billion, marking a year-on-year increase of 29.6%, the highest monthly growth rate for the year [3]. - The cumulative export value from January to September 2025 reached $43.855 billion, reflecting a year-on-year growth of 13.3% [3]. - The growth in exports is primarily driven by demand in infrastructure and mining sectors in regions such as Africa, the Middle East, and Central Asia [3]. - The report anticipates a long-term upward trend in exports as domestic companies enhance product quality and service offerings, particularly in high-end sectors like large mining machinery [3]. - The energy storage sector is experiencing rising demand, with expectations of over 50% growth in global energy storage installations in 2025, reaching approximately 300 GWh [3]. - The automotive market showed a slight decline in retail sales in October, but long-term growth in vehicle sales is still anticipated due to seasonal demand and upcoming policy changes [3]. Summary by Sections Market Performance Review - In the last week, the indices for machinery equipment, power equipment, and automotive sectors increased by 4.71%, 4.90%, and 2.92% respectively, ranking 4th, 3rd, and 10th among 31 primary industries [8][10]. - The Shanghai Composite Index rose by 3.24% during the same period [8]. Industry News and Key Company Announcements - On October 24, a new humanoid robot was launched at a price point of 9,998 yuan, marking a significant step in making humanoid robots more accessible to consumers [18]. - A report indicated that the price of mainstream lithium iron phosphate batteries has been rising, with expectations of sustained high production levels in November [3]. - Major companies in the machinery and automotive sectors reported varying financial performances, with some showing significant revenue growth while others faced declines [20].

Group 1: Industry Overview - Excavator sales in September reached 19,858 units, a year-on-year increase of 25.4%, with domestic sales at 9,249 units (up 21.5%) and exports at 10,609 units (up 29.0) [1][2] - Loader sales in September totaled 10,530 units, showing a year-on-year growth of 30.5%, with domestic sales at 5,051 units (up 25.58%) and exports at 5,479 units (up 35.3%) [1][2] - Sales of truck cranes in September were 1,561 units, reflecting a year-on-year increase of 21.9%, indicating a positive growth trend in the construction machinery sector [1][2] Group 2: Robotics and Technology - The domestic humanoid robot industry is advancing, with Zhiyuan launching the G2 robot, which features high-performance joints and multi-modal voice interaction capabilities, suitable for various industrial applications [2] - Zhiyuan has signed a procurement contract worth over 100 million yuan with Junsheng Electronics for the initial delivery of the G2 robot [2] Group 3: Company Highlights - Riheng Technology, a leading supplier of industrial X-ray intelligent detection equipment, reported a nearly doubled order growth and a revenue increase of 38.34% year-on-year, with net profit rising by 7.8% [2] - Kangst, engaged in digital detection instruments, showed a positive Q3 performance with revenue and net profit growth of 22.24% and 30.66% respectively, demonstrating resilience under tariff pressures [3][4] - Newray's revenue and net profit increased by 28.97% and 2.88% respectively, with a stable business growth outlook and improving profitability expected [5]