Macro Strategy - The core viewpoint indicates that in 2026, China's economy is expected to grow steadily, with inflation gradually improving and corporate profits likely to continue rising after a turning point in 2025. Global liquidity is anticipated to remain loose, and the relationship between China and the US may stabilize in the short term but could experience increased volatility in the long term. The AI industry trend is expected to drive changes in both upstream supply and downstream demand within the technology-related industrial chain [1][7]. - The overall preference ranking for major asset classes is stocks > commodities (industrial products) > gold > exchange rates > bonds [1][7]. - The macroeconomic outlook for 2026 predicts a 4.9% growth in China's economy, with investment recovery and a slight increase in CPI by 0.5% while PPI is expected to decline by 0.9% [1][7]. Fixed Income Strategy - The credit bond market is characterized by both opportunities and risks in supply and demand, with three main strategies focusing on liquidity, the pace of economic recovery, and regulatory policy changes [2][9]. - The strategy suggests a defensive approach with a focus on short to medium-term credit bonds while selectively engaging in long-term bonds for potential trading opportunities [2][9]. - The city investment bond sector is expected to maintain a "zero tolerance" regulatory stance, with ongoing adjustments to meet new development models, leading to a tight balance in financing [2][9]. Industry Insights Starry Technology (星宸科技) - Starry Technology is a leading global smart security chip company, focusing on the development and sales of smart security chips across three main areas: smart security, smart IoT, and smart automotive [11]. - The company is expected to achieve revenue of 2.354 billion yuan and a net profit of 256 million yuan in 2024, with a research and development expense ratio of 25.59% and a gross margin of 35.79% [11]. - Starry Technology holds a leading market share in IPC SoC and NVR SoC, with respective market shares of 36.5% and 38.7% in 2021 [11]. Zhongli Co., Ltd. (中力股份) - Zhongli Co., Ltd. is a global leader in electric forklifts, focusing on the green and intelligent development of material handling [12]. - The company is projected to achieve net profits of 910 million yuan, 1 billion yuan, and 1.13 billion yuan from 2025 to 2027, with corresponding PE ratios of 16, 15, and 13 times [12][13]. - The company benefits from the industry's electrification trend and is well-positioned for growth in the context of automation and intelligent logistics solutions [12][13]. Suzhou Keda (苏州科达) - Suzhou Keda is actively expanding its overseas market presence, particularly in line with the Belt and Road Initiative, and is involved in various international safety and information projects [14]. - The company is leveraging AI technology to enhance its product offerings, including smart video surveillance and communication systems [14]. - Despite short-term pressures on performance, the company is expected to recover as it capitalizes on AI integration and overseas expansion [14]. Sutech (速腾聚创) - Sutech has shown significant improvement in gross margins, particularly in its robotics segment, which is expected to enter a high-growth phase [15][16]. - The company reported a revenue of 4.07 billion yuan in Q3 2025, with a notable increase in sales from its robotics products [15][16]. - The focus on product iteration and market expansion positions Sutech for long-term growth potential in the robotics industry [15][16].

Group 1: Excavator and Loader Sales - In October 2025, excavator sales reached 18,096 units, a year-on-year increase of 7.77%, with domestic sales at 8,468 units (up 2.44%) and exports at 9,628 units (up 12.9%) [5][6] - For the first ten months of 2025, a total of 192,135 excavators were sold, representing a 17% year-on-year growth, with domestic sales increasing by 19.6% and exports by 14.4% [5][6] - Loader sales in October 2025 totaled 10,673 units, a 27.7% increase year-on-year, with domestic sales up 33.2% and exports up 22.6% [5] Group 2: Industry Trends and Future Outlook - The domestic excavator market is recovering strongly, supported by government initiatives for urban renewal and infrastructure projects, which are expected to release demand [6][8] - The global demand for excavators is also increasing, with a 14.4% year-on-year growth in exports for the first ten months of 2025, indicating a positive trend in overseas markets [6][8] - The industry is entering a rational growth phase, with expectations for continued recovery in sales throughout the year [6] Group 3: Forklift Sales and Market Dynamics - In October 2025, forklift sales reached 114,300 units, a year-on-year increase of 15.9%, with domestic sales at 70,400 units (up 16.2%) and exports at 43,900 units (also up 16.2%) [11][12] - The overall forklift sales for the first ten months of 2025 totaled 1,220,700 units, reflecting a 14.2% year-on-year growth [11] - The growth in forklift sales is attributed to the recovery in manufacturing and logistics sectors, as well as improved competitiveness of domestic forklift manufacturers in international markets [12][15] Group 4: Company-Specific Developments - SANY Heavy Industry has completed its production base in South Africa, enhancing its global presence and capacity to produce 1,000 excavators annually for the African market [7] - Zoomlion has launched several innovative electric excavators, addressing industry pain points and aligning with global trends towards green technology [7][15] - Hangcha Group has made significant strides in the hydrogen forklift market, delivering a large order of hydrogen-powered forklifts, marking a step forward in its green product offerings [14][15] Group 5: AIOT Market and Company Performance - Zhongke Lanyun (688332) is a leading AIOT company based on the RISC-V architecture, with a projected revenue growth from 927 million yuan in 2020 to 1.819 billion yuan in 2024, reflecting a CAGR of approximately 18.36% [17][18] - The company maintains a gross margin of around 20% and a net profit margin that is among the highest in the industry, benefiting from efficient cost management and a diverse product portfolio [17][18] - The global TWS earphone market is expected to grow significantly, with Zhongke Lanyun capturing nearly 30% of the market share in TWS earphone chips, indicating strong competitive positioning [18][19]

Investment Rating - The report maintains a "Buy" rating for the company [2][6] Core Views - The company has shown steady performance with a revenue increase of 8.69% year-on-year for the first three quarters of 2025, reaching 13.972 billion yuan [5] - The introduction of a new humanoid robot product is expected to enhance the company's position in the smart logistics sector, potentially leading to increased automation in logistics scenarios [5] - The company is expanding its global network, with a focus on local production and global market penetration, which is expected to improve operational efficiency [5] Financial Summary - The total market capitalization is approximately 33.02 billion yuan, with a 52-week high of 30.11 yuan and a low of 16.81 yuan [4] - For 2025, the company is projected to achieve revenues of 18.136 billion yuan, a growth of 10.01%, and a net profit of 2.211 billion yuan, reflecting a growth of 9.35% [6][7] - The company's gross profit margin for the first three quarters of 2025 was 23.48%, an increase of 0.47 percentage points year-on-year [5] Earnings Forecast - Revenue projections for 2025-2027 are 18.136 billion yuan, 19.953 billion yuan, and 22.011 billion yuan, respectively, with corresponding net profits of 2.211 billion yuan, 2.420 billion yuan, and 2.664 billion yuan [6][7] - The expected earnings per share (EPS) for 2025 is 1.69 yuan, increasing to 2.03 yuan by 2027 [7][12]

Core Viewpoint - The forklift industry is experiencing strong cash flow and resilient demand, with short-term global demand showing an upward trend and long-term growth potential driven by intelligent technology [1] Industry Summary - The current global demand for forklifts is on the rise, indicating a positive market outlook in the short term [1] - The integration of intelligent technology is expected to create new growth opportunities for the industry in the long term [1] - Chinese companies have a significant first-mover advantage in the new wave of industrial intelligence, positioning them to potentially surpass competitors in the future [1] Valuation Summary - The industry is currently valued at a range of 10 to 15 times earnings for the year 2026, suggesting a favorable investment opportunity [1] - A sector-wide allocation strategy is recommended based on the current valuation metrics [1]

Core Viewpoint - The global forklift industry is expected to experience a structural recovery in 2025, driven by a rate-cutting cycle and technological upgrades after approximately two years of decline [1][3]. Group 1: Market Trends - In the first nine months of 2025, China's cumulative forklift sales reached 1.1064 million units, a year-on-year increase of 14%, with domestic sales at 697,400 units (+13.1%) and exports at 409,000 units (+15.5%) [3]. - The monthly domestic sales growth in September 2025 reached 29.3%, indicating a rebound in domestic manufacturing investment demand [3]. - The global forklift order inflection point has been observed, with demand entering an upward channel, showing resilience against fluctuations in downstream single-industry demand [3]. Group 2: Technological Advancements - The integration of AI and embodied intelligence is expected to reshape the logistics industry, transitioning from mechanized operations to cognitive intelligence, enhancing the unity of "cognition" and "execution" [1][7]. - The penetration rate of unmanned forklifts was only 1.9% in 2024, but cost advantages are becoming apparent, indicating an impending industry explosion [2]. - The logistics sector is poised to be one of the first applications for embodied intelligent robots, driven by the broad application prospects and relatively limited action specifications [2]. Group 3: Company Performance - Kion Group's new forklift orders have shown a positive trend since Q4 2024, with a year-on-year growth of 17% in Q3 2025 [4]. - Toyota Industries has also seen a turnaround in new orders since Q4 2024, maintaining small positive growth throughout the year [4]. - Chinese forklift companies are increasing their overseas market share, with overseas revenue proportions for Heli, Hangcha, and Zhongli at 43%, 40%, and 52% respectively in the first half of 2025 [6]. Group 4: Future Outlook - The electric forklift penetration rate is accelerating, with Europe reaching 68% and China at 35%, below the global average of 43% [5]. - The long-term trend for electric forklifts is strong, with lithium battery forklifts expected to replace lead-acid batteries significantly [5]. - Chinese companies are expected to leverage their first-mover advantage in the new wave of intelligent logistics, potentially achieving a leap from catching up to surpassing competitors [7].

Macro Economic Insights - The Producer Price Index (PPI) showed a year-on-year increase, driven by the non-ferrous and downstream manufacturing sectors, with October PPI at -2.1%, an improvement from previous expectations of -2.3% [3][7] - The Consumer Price Index (CPI) for October was reported at 0.2%, slightly above the expected -0.1%, indicating a modest recovery in consumer prices [3][4] Industry Analysis Electric Forklift Industry - The penetration rate of electric forklifts is increasing, with a current rate of 67.87% in China, lower than the global average of 72.23% and Europe's 88.71%, suggesting significant growth potential [11] - The industry is moving towards automation and intelligence, with a notable increase in sales of unmanned forklifts, which saw a year-on-year growth of 266.7% in the first half of 2025 [12] Coal Mining Sector - The price of thermal coal has surpassed 800 RMB per ton, driven by supply constraints and increased demand due to seasonal heating needs, with prices expected to stabilize between 800-860 RMB [22][24] - The focus on coal prices is on achieving a balance between coal and power generation profitability, with a target price of around 750 RMB for 2025 [25] Media and Entertainment - The gaming sector continues to show strong performance, with significant revenue increases from mobile games and a focus on expanding into overseas markets [27] - The rise of video podcasts is noted as a new growth curve for content platforms, with Bilibili reporting a 270% increase in consumption time for video podcasts in Q1 2025 [18] Pharmaceutical Sector - The company is advancing its HIV drug pipeline, with the ACC017 tablet entering phase III clinical trials, indicating strong growth potential in the HIV treatment market [39][40] - The global sales of HIV integrase inhibitors are projected to reach nearly 25 billion USD in 2024, highlighting the market's growth trajectory [39] Semiconductor Industry - The domestic storage chip market is expected to see significant growth due to increasing demand driven by AI applications, with AI servers requiring substantially more storage than traditional servers [33] - Domestic equipment manufacturers are making breakthroughs in key processes, which is expected to enhance the localization rate of storage equipment [36]

Investment Rating - The investment rating for the machinery equipment industry is "Positive" [2] Core Views - The report highlights a significant growth in the sales of excavators and loaders, with excavator sales reaching 18,096 units in October, a year-on-year increase of 7.8%, and loader sales increasing by 27.7% [12][58] - The humanoid robot sector is experiencing rapid advancements, with companies like Xiaopeng and ZhiYuan launching new models aimed for mass production by 2026 [12][55] - The report emphasizes the resilience of companies like Rihuan Technology and Kangst, which have shown strong revenue growth despite external pressures [3][4][14] Summary by Sections 1. Company Highlights - Rihuan Technology, a leading supplier of industrial X-ray intelligent detection equipment, saw a nearly 100% increase in new orders year-on-year and a 44.01% revenue growth in the first three quarters [3] - Kangst, involved in digital detection instruments, reported a 22.24% increase in revenue and a 30.66% increase in net profit in Q3, demonstrating strong operational resilience [4][14] - Newrui Co., which produces hard alloys and tools, experienced a significant profit increase of 75.40% in Q3, driven by effective cost management amid rising raw material prices [5][15] 2. Industry Trends - The machinery sector is witnessing a broad recovery, with excavator and loader sales showing strong growth, indicating a positive trend in construction and infrastructure investment [12][58] - The humanoid robot market is set for significant growth, with advancements in technology and increasing investments from major companies [12][55] 3. Market Performance - The machinery index saw a slight decline of 0.25% last week, while other major indices like the Shanghai Composite Index increased by 1.08% [16] - The report notes that the machinery industry is experiencing varied performance across sub-sectors, with some segments like power distribution equipment showing strong gains [22] 4. Policy Support - Recent government policies are aimed at enhancing the industrial machinery sector, including support for high-end machine tools and automation technologies [28][35]

Core Insights - The mechanical equipment industry experienced a 5.3% increase from October 20 to October 24, 2025, ranking 4th among 31 primary industries [2][3] - Sub-sectors such as specialized equipment (+6.1%), general equipment (+5.97%), and automation equipment (+5.69%) showed strong performance, indicating a positive trend in the industry [2][3] Industry Performance - The overall mechanical equipment sector recorded an increase, with specialized and general equipment performing particularly well [2][3] - The engineering machinery import and export trade in September reached $5.505 billion, a year-on-year increase of 29.1%, with exports contributing significantly to this growth [3] Market Trends - The upcoming Asia International Logistics Technology and Transportation Systems Exhibition will focus on smart equipment upgrades and low-carbon technologies, which are expected to positively impact the forklift sector [4] - The forklift industry is seeing significant sales growth, driven by a low base effect from the previous year, and is expected to maintain this growth trajectory [4] Investment Opportunities - Recommendations include focusing on companies with strong performance support, such as XCMG Machinery and SANY Heavy Industry in the engineering machinery sector [3] - In the semiconductor equipment sector, domestic companies are expected to benefit from increased demand due to local production expansion plans [5] - The industrial robot sector saw a 28.3% increase in production in September, indicating potential investment opportunities as the industry may be on the verge of recovery [5]

Group 1: Electronic Distribution Industry - The electronic distribution companies such as Shangle Electronics, Runxin Technology, and Tailong Co. reported strong growth in Q3 2025, with Shangle Electronics achieving a revenue of 6.19 billion yuan, a year-on-year increase of 32.8%, and a net profit of 141 million yuan, up 164.3% [2] - Runxin Technology's revenue reached 2.147 billion yuan, growing by 11.67%, with a net profit of 46.08 million yuan, an increase of 24.09% [2] - Tailong Co. reported a revenue of 2.058 billion yuan, up 5.8%, and a net profit of 38.36 million yuan, growing by 9.84%, indicating a broad recovery in the electronic industry beyond just AI [2] Group 2: Advanced Manufacturing Sector - Putailai, focusing on negative electrode materials and lithium battery equipment, reported a revenue of 3.742 billion yuan, a 6.66% increase, and a net profit of 645 million yuan, up 69.3% [6] - The significant profit growth is attributed to strong demand in the downstream battery sector and breakthroughs in the energy storage field [6] - Juhe Materials, specializing in electronic paste, reported a revenue of 4.206 billion yuan, a 37.38% increase, but a net profit decline of 52.21% due to fair value and investment losses [7] Group 3: Consumer Sector - Jiabiou and Jihong Co. reported results in line with expectations, while Morn Bio achieved a revenue of 5.047 billion yuan, a decrease of 3.41%, but a net profit surge of 385.3% driven by its plant extraction business [9] - The plant extraction segment saw a revenue increase of 7.35%, with significant growth in chili and pepper extracts [9] - Ice Glacier Network reported a revenue of 1.876 billion yuan, down 5.39%, but a net profit increase of 207.49% due to optimized spending strategies and new game approvals [10]

Core Viewpoint - The 20th Central Committee's Fourth Plenary Session has set the tone for the "14th Five-Year Plan," focusing on advanced manufacturing and technological self-reliance, with the equipment manufacturing sector expected to benefit from long-term policy dividends [1] Group 1: Policy Direction - The "14th Five-Year Plan" emphasizes building a modern industrial system, upgrading traditional manufacturing towards intelligent, green, and clustered development, and reinforcing the manufacturing sector's role in the national economy [1] - Strategic emerging industries such as new energy, new materials, aerospace, and low-altitude economy will be cultivated, alongside future industries like quantum technology, biomanufacturing, hydrogen energy, nuclear fusion, and brain-computer interfaces [1] - The overarching policy theme for the next 5-10 years will be "traditional manufacturing upgrade + emerging industry rise + technological self-reliance," with high-end equipment, industrial mother machines, intelligent manufacturing, and new energy equipment expected to benefit continuously [1] Group 2: Robotics Industry - During the "14th Five-Year Plan," China's robotics industry is transitioning from "scale expansion" to "quality leap," with embodied intelligence and AI as core driving forces [2] - The Ministry of Industry and Information Technology and local financial and state-owned funds have prioritized humanoid robots, moving from foundational layout to tackling core components and complete machine intelligence [2] - The industry's core logic is summarized as "three upgrades": 1. Technology chain upgrade: from servo and reducer to large model control, forming a "software + hardware" closed loop 2. Industry chain upgrade: from component localization breakthroughs to complete machine system integration and scenario collaboration 3. Value chain upgrade: robots transitioning from cost centers to productivity tools, reshaping industry chain profits [2] Group 3: Forklift Industry - In September, forklift sales saw significant growth, with domestic sales recovering faster than exports. In September 2025, the industry sold 130,400 units, a year-on-year increase of 23%, with domestic sales at 81,100 units (+29.3%) and exports at 49,300 units (+13.9%) [3] - Cumulatively, from January to September, total sales reached 1,106,400 units, a year-on-year increase of 14%, with domestic and export sales growing by 13.1% and 15.5%, respectively [3] - Excluding electric walk-behind warehouse trucks, September forklift sales were 51,200 units, a year-on-year increase of 18.2%, with domestic sales at 31,900 units (+15.7%) and exports at 19,200 units (+22.7%) [3]