Company and Industry Summary Company Overview - **Company Name**: Shantui Construction Machinery Co., Ltd. (山推股份) - **Stock Code**: 20260320 Key Points from the Conference Call Revenue Goals and Market Strategy - The company has set a revenue target of **16.1 billion CNY** for 2026, with an overseas revenue target of **10.5 billion CNY** (65% of total) [2][4] - Major target regions for overseas revenue include Africa (31%), Russia (20%), and Asia-Pacific (17%) [2][5] - The company aims to enhance its market competitiveness, technological leadership, brand influence, and strategic control to enter the top tier of the industry [4] Product Growth and Financial Performance - Core growth will come from mining equipment, with budgeted growth rates exceeding **50%** for bulldozers, excavators, loaders, and graders by 2026 [2] - In 2025, the company achieved a revenue of **14.62 billion CNY**, a year-on-year increase of **2.82%**, and a net profit of **1.211 billion CNY**, up **9.86%** [3] - The gross profit margin reached **21.48%**, with profit growth outpacing revenue growth [3] Cost Reduction and Profitability - The company plans to achieve cost reductions of **5.2 billion CNY** in 2026, maintaining a similar level to 2025 [2][14] - Cost reductions in 2025 totaled approximately **5.3 billion CNY**, with significant contributions from procurement, processes, and R&D [14] Overseas Market Strategy - The overseas business model is transitioning from an agency system to a "rental and resale + remanufacturing" closed-loop model [2] - The company has nearly **100 service points** in Africa and plans to promote local factory establishment through KD (knock-down) models [2] Product Line and Sales Projections - For 2026, the sales targets include **210 bulldozers** (up 50%), **350 excavators**, **510 loaders**, and nearly **100 graders** [7] - The company expects significant growth in all product categories, with the first quarter's growth exceeding expectations [7] Risk Management - Anticipated foreign exchange losses for Q1 2026 are estimated between **40 million to 50 million CNY** [3][15] - The company has implemented hedging strategies to mitigate foreign exchange risks [6][7] IPO and Capital Management - The company plans to complete its Hong Kong IPO in Q2 2026 and aims to increase its dividend payout ratio to at least **30%** of net profit [3][8] - The integration of Levo excavators is progressing positively, with optimistic expectations for asset injection [12] Market Trends and Competitive Landscape - The domestic excavator market is highly competitive, with price pressures affecting profitability [12] - The company positions the domestic market as a base while focusing on overseas markets as the main battlefield [12] Digital Transformation and Innovation - The company is advancing its digital transformation with projects in R&D management, experimental data management, and smart logistics systems [3] Summary of Product Revenue Composition - In 2025, excavators accounted for **37%** of revenue, bulldozers **33%**, loaders **15%**, and other products around **5%** [9] Future Outlook - The company anticipates an average annual revenue growth of **10% to 11%** during the 14th Five-Year Plan, targeting approximately **27 billion CNY** by 2030 [12] Conclusion - Shantui Construction Machinery is strategically positioned for growth in both domestic and international markets, with a strong focus on mining equipment and digital transformation initiatives. The company is actively managing risks associated with foreign exchange and market competition while preparing for significant future expansions through its IPO and product innovations.

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].

Core Viewpoint - The engineering machinery industry is experiencing a recovery in domestic demand and favorable conditions for exports, leading to improved profitability and a positive outlook for the sector's performance [1]. Domestic Sales Performance - In January, domestic sales of major engineering machinery products showed significant growth: excavators sold 8,723 units (up 61.4% year-on-year), loaders 5,293 units (up 42.8%), and truck cranes 1,608 units (up 0.56%) [2]. - The overall strong performance in domestic sales is attributed to the impact of the Spring Festival, with expectations for continued growth driven by favorable policies in real estate and infrastructure, as well as an ongoing equipment replacement cycle [2]. Export Performance - In January, all categories of exports experienced year-on-year growth: excavators sold 9,985 units (up 40.5%), loaders 6,466 units (up 53.4%), and truck cranes 452 units (up 128%) [3]. - The positive export performance is expected to continue due to improving overseas market conditions and the deepening penetration of domestic brands in international markets, which will likely enhance their market share abroad [3]. Investment Recommendations - The company recommends focusing on investment in SANY Heavy Industry, Hengli Hydraulic, and LiuGong as key players in the engineering machinery sector [3].

Core Viewpoint - The Chinese construction machinery industry is experiencing significant growth in January 2026, with notable increases in sales across various equipment categories, indicating a potential recovery in the market [1][3]. Excavator Market - In January 2026, a total of 18,708 excavators were sold, marking a year-on-year increase of 49.5%. Domestic sales accounted for 8,723 units (up 61.4%), while exports reached 9,985 units (up 40.5%) [2]. Loader Market - The loader market saw sales of 11,759 units in January 2026, reflecting a 48.5% increase year-on-year. Domestic sales were 5,293 units (up 42.8%), and exports were 6,466 units (up 53.4%) [4]. Grader Market - Sales of graders totaled 754 units in January 2026, with a year-on-year growth of 8.02%. Domestic sales were 104 units (down 8.77%), while exports reached 650 units (up 11.3%) [5]. Crane Market - The automobile crane segment sold 1,630 units in January 2026, showing a year-on-year increase of 28.7%. Domestic sales were 821 units (up 55.2%), and exports were 809 units (up 9.62%) [7]. - The crawler crane market reported sales of 301 units, a significant increase of 73% year-on-year, with domestic sales of 88 units (up 126%) and exports of 213 units (up 57.8%) [8]. - The truck-mounted crane segment sold 2,060 units, reflecting a year-on-year growth of 14.6%. Domestic sales were 1,608 units (up 0.56%), while exports reached 452 units (up 128%) [9]. - The tower crane market saw sales of 324 units, with a year-on-year increase of 7.64%. Domestic sales were 202 units (up 6.88%), and exports were 122 units (up 8.93%) [10]. Industrial Vehicle Market - In January 2026, a total of 50,878 forklifts (excluding electric walk-behind warehouse vehicles) were sold, marking a year-on-year increase of 28.7%. Domestic sales were 31,586 units (up 19.6%), and exports were 19,292 units (up 46.9%) [11]. - Overall forklift sales reached 141,743 units, with domestic sales of 89,716 units (up 63.3%) and exports of 52,027 units (up 34.4%) [11]. Roller Market - The roller market reported sales of 1,590 units in January 2026, reflecting a year-on-year growth of 13%. Domestic sales were 448 units (up 7.43%), while exports reached 1,142 units (up 15.4%) [12]. Paver Market - Sales of pavers totaled 124 units in January 2026, with a year-on-year increase of 44.2%. Domestic sales were 67 units (up 19.6%), and exports were 57 units (up 90%) [14]. Aerial Work Platform Market - The aerial work platform segment sold 14,466 units in January 2026, marking a year-on-year growth of 29.3%. Domestic sales were 2,157 units (down 16.6%), while exports reached 12,309 units (up 43.1%) [15]. High-altitude Work Vehicle Market - The high-altitude work vehicle market reported sales of 352 units, with a year-on-year increase of 2.33%. Domestic sales were 349 units (up 4.18%), and exports were 3 units (down 66.7%) [16].

Core Insights - SANY Group showcased its full range of construction machinery at the Saudi HEC exhibition, emphasizing its strength in "Chinese manufacturing" [1][8] - The exhibition highlighted SANY's commitment to technological innovation and localized services, aiming to align "Chinese manufacturing" with global energy infrastructure needs [9][13] Product Highlights - SANY Heavy Industry presented the SKT130S hybrid mining truck, SKT105S wide-body truck, and SAT40C articulated truck, which attracted significant interest from mining owners and contractors in Saudi Arabia and surrounding regions [3][11] - The SKT130S offers a new mining transportation solution with three core advantages: - Exceptional fuel efficiency through an intelligent hybrid system and energy recovery technology [4][11] - Cost-effective procurement and maintenance due to a localized supply chain [5][11] - Enhanced safety features including triple auxiliary braking and intelligent downhill assistance [6][11] Recognition and Support - The Saudi Deputy Minister of Industry visited SANY's booth, where he praised the technological innovations and application value of the SKT130S, reflecting the recognition and support from the Middle Eastern market and policy levels [7][12]

Group 1: Excavator Sales and Market Trends - In December 2025, excavator sales in China (including exports) reached 23,095 units, a year-on-year increase of 19.2%, with domestic sales at 10,331 units, up 10.9% [4] - For the entire year of 2025, excavator sales (including exports) totaled 235,257 units, marking a 17.0% increase, while domestic sales were 118,518 units, up 17.9% [4] - The non-excavator construction machinery segment showed significant recovery, with loader sales up 17.6%, grader sales up 70.5%, truck crane sales up 39.1%, crawler crane sales up 95.5%, and truck-mounted crane sales up 36.7% in December 2025 [4] Group 2: Export Growth and Opportunities - In December 2025, excavator exports reached 12,764 units, a 26.9% increase, with total annual exports at 116,739 units, up 16.1% [5] - The export value of construction machinery in December 2025 was $6.42 billion, a 27.2% increase, with the total annual export value at $60.17 billion, up 13.8% [5] - Future opportunities for construction machinery exports include demand growth in Southeast Asia, Africa, and the Middle East, as well as increased penetration in high-end markets in Europe and the U.S. [5] Group 3: Electric Loader Sales and Industry Trends - Electric loader sales in December 2025 reached 2,722 units, a significant year-on-year increase of 218.7%, with an electrification rate of 22.2%, up 13.2 percentage points [7] - For the entire year of 2025, electric loader sales totaled 29,771 units, a 165.3% increase, with an electrification rate of 23.2%, up 12.9 percentage points [7] - The central economic work conference emphasized the need for energy-saving and carbon reduction transformations in key industries, indicating that electrification will be a key development direction for the construction machinery sector [7] Group 4: Forklift Sales and Market Potential - In December 2025, total forklift sales reached 111,363 units, a slight year-on-year increase of 0.03%, with domestic sales at 63,807 units, down 5.2%, and export sales at 47,556 units, up 8.0% [8] - For the entire year of 2025, total forklift sales were 1,451,768 units, a 12.9% increase, with domestic sales at 906,812 units, up 12.6%, and export sales at 544,956 units, up 13.4% [8] - The rapid development of robotics and artificial intelligence is driving the penetration of unmanned forklifts, with projected sales of 39,000 units in 2025, a 39.3% increase, indicating significant market growth potential [8]

Macro - The risk of a government shutdown in the U.S. is considered lower than in 2025, with six departmental budgets already passed and preliminary consensus on the remaining six [5] - The Trump administration's pressure on pharmaceutical companies to lower prices has alleviated urgent healthcare disputes, reducing the likelihood of a political standoff [5] - The current administration is focusing more on foreign issues, suggesting a preference for stability in domestic matters to avoid dual fronts [5] Machinery Manufacturing - In December 2025, the sales of excavators in China reached 235,257 units, a year-on-year increase of 17.0%, with domestic sales at 118,518 units, up 17.9% [5] - Non-excavator machinery sales showed significant recovery, with loader sales up 17.6%, grader sales up 70.5%, truck crane sales up 39.1%, crawler crane sales up 95.5%, and truck-mounted crane sales up 36.7% [5] Food and Beverage - Junlebao, starting from yogurt, launched its first infant formula in 2014, followed by the "Jianchun" brand in 2017 and the high-end fresh milk brand "Yuexianhuo" in 2020 [6] - "Jianchun" became the top brand in low-temperature yogurt by retail sales in China starting in 2022, while "Yuexianhuo" is projected to reach an income of 1.88 billion in 2024, becoming a leading high-end fresh milk brand [6] Pharmaceuticals - The AI healthcare sector is expanding, with companies developing AI products and services across various segments, including health management, precision medicine, digital clinical trials, and drug development [8] - The investment logic in AI healthcare is centered on "data closed-loop" and "scene necessity," driven by cost control in healthcare and technological advancements [8] - Future competition will hinge on possessing exclusive, high-quality private data and the ability to achieve continuous data iteration through business scenarios [8] Banking - Industrial Bank reported a revenue of 212.7 billion for 2025, a year-on-year increase of 0.2%, and a net profit of 77.5 billion, up 0.3% [9] - The bank's revenue growth has returned to positive territory, with stable asset expansion and deepening layouts in five new sectors [9] - Deposits are steadily increasing, enhancing liability stability, while the non-performing loan ratio remains low, indicating strong risk compensation capabilities [9]

Group 1 - The core viewpoint of the article emphasizes the proactive response of the Hefei Luyang District Housing and Urban-Rural Development Bureau to the city's snow removal initiative, ensuring public safety during extreme weather conditions [2] - The Luyang District Housing Bureau, in collaboration with the local construction industry association, mobilized member enterprises to participate in snow and ice removal efforts, activating an emergency mechanism [2] - On January 19, the bureau coordinated the deployment of 25 specialized snow removal vehicles and equipment, including snowplows and spreaders, to ensure comprehensive coverage across 11 townships and streets in the district [2] Group 2 - The emergency response included the preparation of anti-slip chains, rescue tools, emergency lighting, and warming supplies, ensuring readiness for immediate action [2] - The district implemented round-the-clock emergency monitoring to guarantee prompt deployment for rescue operations as needed [2]

Investment Rating - The industry investment rating is "Overweight" [4] Core Insights - The report highlights significant advancements in commercial aerospace led by China Aerospace Science and Technology Corporation, with a focus on reusable rocket technology and the development of new industries such as commercial aerospace and low-altitude economy [5][6] - The 2026 Nuclear Fusion Technology and Industry Conference successfully took place, resulting in major procurement projects and the establishment of a fusion financial institution alliance to enhance the integration of industry and capital [5][6] - The report indicates a strong performance in the engineering machinery sector, with December 2025 excavator sales reaching 23,095 units, a year-on-year increase of 19.2%, and loader sales increasing by 30.0% [5][6] Summary by Sections Market Overview - From January 12 to January 16, 2026, the mechanical equipment index increased by 2.10%, outperforming the CSI 300 index, which decreased by 0.86% [7] - The mechanical equipment sector ranked 6th among 31 industries in terms of performance during this period [7] Sub-Industry Data - Engineering Machinery: December 2025 excavator sales were 23,095 units (+19.2% YoY), with exports of 10,331 units (+10.9% YoY). Loader sales were 12,236 units (+30.0% YoY), with exports of 6,945 units (+41.5% YoY) [5][6] - Industrial Robots: The report recommends companies such as Hengli Hydraulic and Changying Precision for investment [5] - AI Infrastructure: Companies like Ice Wheel Environment and Hanzhong Precision are highlighted for their potential in the liquid cooling sector [5] Company Profit Forecasts - The report provides a detailed valuation summary for key mechanical companies, indicating a positive outlook for companies like Hengli Hydraulic and Sany Heavy Industry, with recommendations to "Overweight" these stocks based on their projected earnings growth [5][6][81]

Forklift Sales - In December 2025, a total of 111,363 forklifts were sold, representing a year-on-year growth of 0.03%. Domestic sales were 63,807 units, down 5.17%, while exports reached 47,556 units, up 7.97% [1] - For the entire year of 2025, a total of 1,451,768 forklifts were sold, marking a 12.9% increase year-on-year. Domestic sales were 906,812 units, up 12.6%, and exports were 544,956 units, up 13.4% [1] - Excluding electric walk-behind warehouse vehicles, 42,849 forklifts were sold in December 2025, down 5.42% year-on-year. Domestic sales were 23,985 units, down 11.8%, while exports were 18,864 units, up 4.19% [1] Grader Sales - In December 2025, 792 graders were sold, reflecting a year-on-year increase of 14%. Domestic sales were 133 units, up 70.5%, and exports were 659 units, up 6.81% [2] - For the full year of 2025, a total of 8,360 graders were sold, representing an 8.35% increase year-on-year. Domestic sales were 1,468 units, up 32.4%, and exports were 6,892 units, up 4.31% [2] Truck Crane Sales - In December 2025, 1,911 truck cranes were sold, showing a year-on-year growth of 38.1%. Domestic sales were 886 units, up 39.1%, and exports were 1,025 units, up 37.2% [3] - For the entire year of 2025, 19,974 truck cranes were sold, a 1.39% increase year-on-year. Domestic sales were 10,659 units, up 1.41%, and exports were 9,315 units, up 1.37% [3] Crawler Crane Sales - In December 2025, 385 crawler cranes were sold, marking a significant year-on-year increase of 68.1%. Domestic sales were 131 units, up 95.5%, and exports were 254 units, up 56.8% [4] - For the full year of 2025, a total of 3,415 crawler cranes were sold, reflecting a 30.1% increase year-on-year. Domestic sales were 1,091 units, up 32.9%, and exports were 2,324 units, up 28.9% [4] Truck-Mounted Crane Sales - In December 2025, 2,664 truck-mounted cranes were sold, representing a year-on-year growth of 35.2%. Domestic sales were 2,274 units, up 36.7%, and exports were 390 units, up 27.5% [5] - For the entire year of 2025, 26,006 truck-mounted cranes were sold, a year-on-year increase of 11.1%. Domestic sales were 20,462 units, up 8.47%, and exports were 5,544 units, up 22.2% [5] Tower Crane Sales - In December 2025, 395 tower cranes were sold, showing a year-on-year decline of 30.8%. Domestic sales were 182 units, down 45.7%, while exports were 213 units, down 9.75% [6] - For the full year of 2025, a total of 5,178 tower cranes were sold, reflecting a year-on-year decrease of 30.7%. Domestic sales were 2,726 units, down 50%, while exports were 2,452 units, up 21.9% [6] Roller Sales - In December 2025, 1,343 rollers were sold, indicating a year-on-year increase of 25.6%. Domestic sales were 437 units, up 18.4%, and exports were 906 units, up 29.4% [7] - For the entire year of 2025, a total of 17,434 rollers were sold, representing a year-on-year growth of 23%. Domestic sales were 6,482 units, up 17.9%, and exports were 10,952 units, up 26.2% [7] Paver Sales - In December 2025, 107 pavers were sold, reflecting a year-on-year decline of 11.6%. Domestic sales were 59 units, down 32.2%, while exports were 48 units, up 41.2% [8] - For the full year of 2025, a total of 1,547 pavers were sold, marking a year-on-year increase of 24.8%. Domestic sales were 1,082 units, up 30.7%, and exports were 465 units, up 12.9% [8] Aerial Work Platform Sales - In December 2025, 14,326 aerial work platforms were sold, showing a year-on-year decline of 8.36%. Domestic sales were 4,446 units, down 25.1%, while exports were 9,880 units, up 1.92% [10] - For the entire year of 2025, a total of 165,171 aerial work platforms were sold, reflecting a year-on-year decrease of 28.6%. Domestic sales were 63,886 units, down 42.4%, and exports were 101,285 units, down 16% [10] High-altitude Operation Vehicle Sales - In December 2025, 431 high-altitude operation vehicles were sold, indicating a year-on-year decline of 5.48%. Domestic sales were 404 units, down 7.97%, while exports were 27 units, up 58.8% [11] - For the full year of 2025, a total of 4,993 high-altitude operation vehicles were sold, representing a year-on-year increase of 27.7%. Domestic sales were 4,755 units, up 26.7%, and exports were 238 units, up 51.6% [11]