Investment Rating - The investment rating for SANY Heavy Industry is "Buy" (maintained) [1] Core Views - The company reported a significant increase in profitability, with a net profit of 8.41 billion yuan in 2025, representing a year-on-year growth of 41.2% [1][2] - The revenue for 2025 reached 89.7 billion yuan, up 14.4% year-on-year, driven by strong performance in core products such as excavators and concrete machinery [2][3] - The company is experiencing robust growth in overseas markets, with international revenue accounting for 64% of total sales, amounting to 55.86 billion yuan, a 15.1% increase year-on-year [2] Summary by Sections Performance Overview - In Q4 2025, the company achieved a revenue of 23.6 billion yuan, up 17.8% year-on-year, and a net profit of 1.27 billion yuan, reflecting a 17.0% increase [1] - The net profit margin improved to 9.5%, an increase of 1.7 percentage points year-on-year, supported by cost reduction and efficiency enhancement measures [3] Product and Market Analysis - Core product revenues showed substantial growth: excavators (34.54 billion yuan, +13.7%), concrete machinery (15.74 billion yuan, +9.5%), and cranes (15.56 billion yuan, +18.7%) [2] - The company is focusing on self-research in new energy products, with revenue from new energy products reaching 8.64 billion yuan, a remarkable growth of 115% year-on-year [3] Financial Projections - Revenue projections for 2026-2028 are estimated at 101.75 billion yuan, 118.31 billion yuan, and 136.48 billion yuan respectively, with corresponding net profits of 10.88 billion yuan, 13.04 billion yuan, and 15.70 billion yuan [3]

1. Report's Industry Investment Rating - No information provided in the report. 2. Core Views of the Report - **Rebar**: The main contract price fluctuated, with a daily decline of 0.22%. Demand improved while supply was weakly stable, and the fundamentals showed seasonal improvement. With cost support, the steel price returned to the upper edge of the oscillation range. However, the strength of demand improvement was questionable, and the subsequent trend should be viewed with caution, focusing on demand performance [5]. - **Hot - rolled coil**: The main contract price oscillated weakly, with a daily decline of 0.27%. Demand recovered well, and the fundamentals improved under the situation of both supply and demand increasing. With cost support from strong raw materials, the price returned to the upper edge of the oscillation range. However, demand concerns remained, and the upward driving force was weakening under the high - inventory situation. The subsequent trend would continue to oscillate, focusing on demand performance [5]. - **Iron ore**: The main contract price oscillated and declined, with a daily decline of 0.49%. Supply disturbances reappeared, and the ore price remained at a high level. However, there was no substantial change in the fundamentals of iron ore, and the over - valued ore price continued to face pressure. It was expected to continue to oscillate at a high level, focusing on steel price performance and Australian ore shipments [5]. 3. Summary by Relevant Catalogs 3.1 Industry Dynamics - **Industrial enterprise profits**: From January to February 2026, the total profit of industrial enterprises above the designated size in China reached 1024.56 billion yuan, a year - on - year increase of 15.2%. Among them, state - owned holding enterprises achieved a total profit of 366.56 billion yuan, a year - on - year increase of 5.3%; joint - stock enterprises achieved a total profit of 803.29 billion yuan, an increase of 22.1%; private enterprises achieved a total profit of 284.45 billion yuan, an increase of 37.2% [7]. - **Construction machinery industry**: The development goal is to maintain stable growth of the industry's operating income, with the profit growth rate higher than the operating income growth rate. It also aims to increase R & D investment, optimize overseas business layout, increase the penetration rate of new energy construction machinery, expand the application of intelligent construction equipment, and achieve digital transformation while reducing energy consumption. The market order should be more standardized, avoiding price wars and "involution - style" competition [8]. - **Iron ore project**: The US - based Ivanhoe Atlantic Mining Company obtained key environmental approvals for its railway, port, and logistics infrastructure in Liberia, clearing key obstacles for the first - phase project of its Kon Kwei Ultra - High Grade Iron Ore Project [9]. 3.2 Spot Market - **Steel products**: The spot prices of rebar in Shanghai, Tianjin, and the national average were 3190 yuan, 3200 yuan, and 3325 yuan respectively, with the national average down 8 yuan. The spot prices of hot - rolled coils in Shanghai, Tianjin, and the national average were 3290 yuan, 3220 yuan, and 3322 yuan respectively, with the national average down 6 yuan. The prices of Tangshan steel billet and Zhangjiagang heavy scrap were 2980 yuan and 2180 yuan respectively, with the latter down 10 yuan. The coil - rebar price difference was 100 yuan, and the rebar - scrap price difference was 1010 yuan [10]. - **Iron ore**: The price of PB fines at Shandong ports was 782 yuan, down 6 yuan; the price of Tangshan iron concentrate was 772 yuan, unchanged. The sea freight from Australia and Brazil was 10.71 yuan and 30.14 yuan respectively, with the former down 0.14 yuan and the latter up 0.11 yuan. The SGX swap price was 106.39 yuan, up 0.41 yuan, and the iron ore price index (61% FE, CFR) was 108.50 yuan, up 2.00 yuan [10]. 3.3 Futures Market | Variety | Closing Price | Daily Change (%) | Volume | Volume Change | Open Interest | Open Interest Change | | --- | --- | --- | --- | --- | --- | --- | | Rebar | 3124 yuan | - 0.22 | 517,368 | 110,928 | 1,076,159 | - 91,050 | | Hot - rolled coil | 3299 yuan | - 0.27 | 225,634 | 11,585 | 919,538 | - 42,727 | | Iron ore | 812.0 yuan | - 0.49 | 183,962 | - 32,452 | 387,244 | - 20,782 | [12] 3.4 Relevant Charts - **Steel inventory**: The report presents charts of weekly changes and total inventory of rebar and hot - rolled coils, including data for multiple years [14][20]. - **Iron ore inventory**: Charts show the inventory of 45 ports in China, 247 steel mills, and domestic mines, including inventory volume, seasonal changes, and month - on - month changes [22]. - **Steel mill production**: Charts display the blast furnace operating rate, capacity utilization rate, and profit - making ratio of 247 sample steel mills, as well as the operating rate and profit - making situation of 94 independent electric furnace steel mills [30]. 3.5 Market Outlook - **Rebar**: The supply - demand pattern improved, inventory continued to decline, and production was weakly stable. Weekly production decreased by 5.46 tons, and demand showed seasonal improvement, with weekly apparent demand increasing by 17.28 tons. However, the strength of demand improvement was questionable, and the subsequent trend should be viewed with caution, focusing on demand performance [39]. - **Hot - rolled coil**: Both supply and demand continued to rise. Weekly production increased by 5.40 tons, but inventory remained high. Demand was resilient, with weekly apparent demand increasing by 3.12 tons, but high - frequency trading volume declined. The subsequent trend would continue to oscillate, focusing on demand performance [39]. - **Iron ore**: The supply - demand pattern improved, and ore demand showed seasonal improvement. However, the improvement of industrial contradictions in the steel market was limited, and the subsequent demand growth space needed to be tracked. Supply pressure still existed, and the ore price was expected to continue to oscillate at a high level, focusing on steel price performance and Australian ore shipments [40].

Investment Rating - The industry investment rating is "Outperform the Market," indicating a projected increase of over 10% relative to the market index in the next six months [12]. Core Insights - In February, domestic sales of excavators in China faced pressure, while exports continued to show high growth. The total sales of excavators reached 17,226 units, a year-on-year decrease of 10.6%, with domestic sales down 42% to 6,755 units, and exports up 37.2% to 10,471 units [3][5]. - For loaders, February sales were 9,540 units, a year-on-year increase of 9.28%, with domestic sales down 14.3% to 3,863 units, and exports up 34.4% to 5,677 units [4][5]. - The decline in domestic sales is attributed to the impact of the Spring Festival and a high base from the previous year, rather than a weakening demand trend. The industry is transitioning to a phase driven by the replacement of existing equipment [5]. - The export market is showing strong performance, with excavator and loader exports growing significantly, indicating that external demand is playing a crucial role in supporting the industry during the off-peak season [5]. - The report suggests that the domestic market is expected to recover due to policies promoting equipment upgrades and local government debt management, while the competitiveness of domestic manufacturers in overseas markets is improving [5]. Summary by Sections Excavator Sales - February sales of excavators totaled 17,226 units, down 10.6% year-on-year, with domestic sales at 6,755 units (down 42%) and exports at 10,471 units (up 37.2%) [3]. - Cumulative sales for January-February reached 35,934 units, a year-on-year increase of 13.1% [3]. Loader Sales - February sales of loaders were 9,540 units, up 9.28% year-on-year, with domestic sales at 3,863 units (down 14.3%) and exports at 5,677 units (up 34.4%) [4]. - Cumulative sales for January-February reached 21,299 units, a year-on-year increase of 27.9% [4]. Market Dynamics - The report highlights that the domestic market is entering a phase driven by the replacement of existing equipment, supported by policies for equipment upgrades [5]. - The strong performance in exports indicates a growing penetration and competitiveness of Chinese brands in the global market [5].

Group 1: Capital Market Focus - The report emphasizes the transformation of the capital market into a key engine for innovation and financing, aiming to create a virtuous ecosystem for investment and financing [5] - The government work report outlines three main directions for future capital market development: precise guidance for strategic emerging industries, ecological restructuring for sustainable financing and investment returns, and strengthening investor protection [5][6] - The deepening of the ChiNext reform is highlighted as a priority for 2026, focusing on more inclusive listing standards and replicating successful experiences from the Sci-Tech Innovation Board [6] Group 2: Export and Import Data - In the first two months of 2026, exports increased by 21.8% year-on-year, significantly higher than the 6.6% growth in December 2025, marking a historical high for the same period [11][12] - The report notes that high-end manufacturing is the core driver of export growth, with significant increases in the export of machinery and high-tech products [12][14] - Imports also saw a rise, driven by the rapid development of the AI industry, with a notable increase in the import of automatic data processing equipment and integrated circuits [14] Group 3: Machinery Equipment Industry - The report indicates a positive trend in excavator exports, with a 37.2% year-on-year increase in February 2026, despite a domestic sales decline due to seasonal factors [16][17] - Loader sales also showed growth, with a 9.28% increase in February 2026, reflecting a recovery in domestic demand driven by major infrastructure projects [18] - The report highlights that leading companies like Zoomlion are raising funds to support global expansion and innovation, with significant investments planned for overseas production and R&D [19][20] Group 4: Food and Beverage Industry - The report discusses the government's focus on expanding domestic demand, which is expected to stimulate consumption in the food and beverage sector, particularly in the restaurant industry [21][22] - It notes that the recovery in the dairy and meat sectors is supported by favorable policies, with rising prices for beef and milk expected to benefit upstream agricultural companies [22][25] - The report emphasizes the importance of health-conscious consumption trends and the potential for growth in the snack and beverage markets [23][25]

Investment Rating - The industry investment rating is "Overweight" indicating that the industry index is expected to outperform the CSI 300 index by 10% or more over the next six months [7]. Core Insights - The report highlights a positive trend in excavator exports, with a year-on-year increase of 37.2% in February 2026, despite a domestic sales decline of 42% due to the Chinese New Year holiday affecting workdays [6]. - The domestic demand for excavators is anticipated to recover gradually, supported by major projects in sectors such as mining and water conservancy, which are expected to release demand dividends [6]. - The loader segment also shows growth, with domestic sales increasing by 11.5% in January-February 2026, driven by the commencement of significant domestic projects [6]. - The report emphasizes the importance of companies like Zoomlion, which raised RMB 60 billion through convertible bonds to support global expansion and innovation in technology [6]. - The report suggests focusing on leading companies with strong brand recognition and efficient cost structures, such as Sany Heavy Industry, Zoomlion, LiuGong, Shantui, and Hengli Hydraulic, as they are well-positioned for growth in both domestic and international markets [6]. Summary by Sections Excavator Market - In February 2026, a total of 17,226 excavators were sold, a decrease of 10.6% year-on-year, with domestic sales at 6,755 units, down 42% [6]. - Year-to-date (January-February) domestic sales were 15,478 units, down 9.19%, while exports reached 20,456 units, up 38.8% [6]. Loader Market - In February 2026, 9,540 loaders were sold, marking a year-on-year increase of 9.28%, with domestic sales at 3,863 units, down 14.3%, and exports at 5,677 units, up 34.4% [6]. - Year-to-date (January-February) domestic sales were 9,156 units, up 11.5%, and exports were 12,143 units, up 43.9% [6]. Company Developments - Zoomlion's issuance of convertible bonds aims to enhance its global competitiveness and support innovation in new technologies, with 50% of the funds allocated for global development and the other 50% for high-quality development strategies [6].

Investment Rating - The industry investment rating is "Market Weight" [1] Core Insights - In January 2026, excavator sales reached 18,708 units, a year-on-year increase of 49.50%, but a month-on-month decrease of 19.00%. Domestic sales were 8,723 units, up 61.39% year-on-year, while export sales were 9,985 units, up 40.50% year-on-year [3][4] - Loader sales in January 2026 totaled 11,759 units, reflecting a year-on-year increase of 48.47% and a month-on-month decrease of 3.90%. Domestic sales were 5,293 units, up 42.82% year-on-year, while export sales were 6,466 units, up 53.44% year-on-year [3][4] - The issuance of new special bonds in January 2026 amounted to approximately 367.7 billion yuan, a year-on-year increase of 79.54%, which is expected to boost downstream engineering project commencement and equipment demand [4] - The report highlights a recovery in domestic engineering machinery demand, driven by the acceleration of special bond issuance and the commencement of major domestic projects [4] - The electric excavator sales reached 35 units in January 2026, a year-on-year increase of 94.44%, while electric loader sales were 2,990 units, up 175.32% year-on-year, indicating a growing trend towards electrification in the industry [3][4][5] Summary by Sections Excavator Sales - January 2026 excavator sales were 18,708 units, with domestic sales at 8,723 units and export sales at 9,985 units, showing significant year-on-year growth [3][4] Loader Sales - January 2026 loader sales were 11,759 units, with domestic sales at 5,293 units and export sales at 6,466 units, also reflecting strong year-on-year growth [3][4] Special Bonds and Policy Impact - The acceleration of special bond issuance and the initiation of major projects are expected to enhance equipment demand in the engineering machinery sector [4] Electrification Trend - The report emphasizes the importance of electric machinery, with significant year-on-year growth in sales of electric excavators and loaders, indicating a shift towards greener technology [5]

Group 1 - The core viewpoint of the report is that the domestic demand for construction machinery is recovering, driven by major water conservancy projects and the establishment of overseas production capacity by domestic companies, leading to an acceleration in globalization and increased market penetration [1][2][3] Group 2 - In January 2026, excavator sales reached 18,708 units, a year-on-year increase of 49.5%, with domestic sales at 8,723 units (up 61.4%) and export sales at 9,985 units (up 40.5%) [1][2] - The demand for excavators is expected to continue its recovery due to upcoming projects in various sectors, including mining and infrastructure, as well as government policies promoting the replacement of old equipment [2] Group 3 - Loader sales in January 2026 totaled 11,759 units, reflecting a year-on-year growth of 48.5%, with domestic sales at 5,293 units (up 42.8%) and export sales at 6,466 units (up 53.4%) [1][3] - The electric loader segment saw sales of 2,990 units, achieving a penetration rate of 25.43%, indicating a growing acceptance of electric machinery in the market [3][3] Group 4 - LiuGong's projected net profit for 2025 is between 1.526 billion and 1.659 billion yuan, representing a year-on-year growth of 15-25%, driven by stable demand in the domestic market and a recovering international market [4] - The company's growth strategy focuses on comprehensive solutions, digitalization, and globalization, aiming to optimize business combinations and reduce costs across the value chain [4]

Core Viewpoint - The sales of excavators and loaders in January 2026 show significant growth, indicating a strong recovery in the domestic and international construction machinery market driven by major infrastructure projects and increasing demand for equipment upgrades [2][3][4]. Excavator Sales - In January 2026, a total of 18,708 excavators were sold, representing a year-on-year increase of 49.5%, with domestic sales reaching 8,723 units (up 61.4%) and exports totaling 9,985 units (up 40.5%) [2][3]. - The strong growth in domestic sales is attributed to a low base from the previous year due to the early Spring Festival, and upcoming projects in various sectors are expected to further boost demand [3]. - The export value of excavators in December 2025 was $1.277 billion, a month-on-month increase of 39.28%, and a year-on-year increase of 75.17% compared to December 2024 [3]. Loader Sales - In January 2026, a total of 11,759 loaders were sold, marking a year-on-year increase of 48.5%, with domestic sales of 5,293 units (up 42.8%) and exports of 6,466 units (up 53.4%) [2][4]. - The growth in domestic loader sales is driven by the commencement of major projects, such as the Yaxia Hydropower Station and the New Tibet Railway, which have increased demand for earth-moving equipment [4]. - The sales of electric loaders reached 2,990 units, with an electric penetration rate of 25.43%, indicating a growing acceptance of electric machinery in the market [4]. Company Performance - Liugong (000528) is projected to achieve a net profit of 1.526 billion to 1.659 billion yuan for 2025, reflecting a year-on-year growth of 15-25%, driven by stable demand in the domestic construction machinery sector [4]. - The company's growth strategy focuses on comprehensive solutions, digitalization, and globalization, aiming to optimize business combinations and reduce costs across the value chain [4]. Investment Recommendations - The report suggests focusing on companies with strong brand recognition, comprehensive product matrices, efficient cost management, and robust R&D capabilities, such as SANY Heavy Industry (600031), Zoomlion (000157), Liugong, Shantui (000680), and Hengli Hydraulic (601100) [5].

Investment Rating - The industry investment rating is "Overweight," indicating that the industry index is expected to outperform the CSI 300 index by 10% or more over the next six months [7]. Core Insights - The report highlights a significant increase in sales of excavators and loaders in January 2026, with excavator sales reaching 18,708 units, a year-on-year increase of 49.5%, and loader sales at 11,759 units, up 48.5% [6]. - Domestic excavator sales grew by 61.4% year-on-year, driven by low base effects from the previous year and upcoming large-scale projects in sectors like mining and water conservancy [6]. - Export sales of excavators also showed strong growth, with a 40.5% increase year-on-year, reflecting a growing global demand for Chinese machinery [6]. - The report anticipates a continued recovery in the excavator industry, supported by government policies promoting the replacement of old equipment and increasing domestic demand [6]. - The loader market is also expected to benefit from major domestic projects, with a notable increase in both domestic and export sales [6]. - The report suggests focusing on leading companies with strong brand recognition and efficient cost structures, such as SANY Heavy Industry, Zoomlion, LiuGong, and others [6]. Summary by Sections Sales Performance - In January 2026, excavator sales reached 18,708 units, a 49.5% increase year-on-year, with domestic sales at 8,723 units (up 61.4%) and exports at 9,985 units (up 40.5%) [6]. - Loader sales totaled 11,759 units, marking a 48.5% increase, with domestic sales at 5,293 units (up 42.8%) and exports at 6,466 units (up 53.4%) [6]. Market Trends - The report notes that the strong sales growth in excavators is partly due to a low base from the previous year and the upcoming launch of significant infrastructure projects [6]. - The demand for loaders is also expected to rise due to the commencement of major projects, which will increase the need for earth-moving equipment [6]. Company Performance - LiuGong is projected to achieve a net profit of between 1.526 billion and 1.659 billion yuan for 2025, reflecting a growth of 15-25% year-on-year, driven by stable demand in the domestic market [6]. - The company is implementing a "three-full" strategy focusing on comprehensive solutions, digitalization, and globalization to enhance its market position [6].

Core Viewpoint - Hongying Intelligent aims to become a trusted partner in the digital ecosystem by integrating technology innovation in smart control, new energy, automotive electronics, and robotics, addressing the urgent transformation pressures in the mining industry due to the dual carbon strategy and the need for improved operational efficiency and safety [2][20]. Group 1: Smart Mining Solutions - Hongying has launched a smart mining solution that combines "green + intelligent" approaches, integrating new energy, artificial intelligence, and IoT technologies to create a cleaner, more efficient, and safer operational system for mines [3]. - The solution features a hardware matrix centered around new energy engineering machinery, along with a self-developed smart mining cloud platform, enabling comprehensive data online and intelligent scheduling, transitioning from extensive management to lean operations [5]. Group 2: Efficiency and Safety Enhancements - The solution implements intelligent and electric upgrades for core equipment such as excavators and loaders, directly enhancing production efficiency per operator and equipment [7]. - The smart mining cloud platform supports remote intelligent scheduling, allowing operators to dynamically allocate equipment through a visual interface, achieving "zero waiting" high-efficiency collaboration throughout the production process [8]. Group 3: Integrated Infrastructure and Data Management - The solution establishes an integrated infrastructure by deploying sensor networks, AI cameras, new energy machinery, and charging facilities, creating a closed-loop system for "perception-decision-execution" [9]. - The smart mining cloud platform integrates data across various dimensions, constructing a dynamic management system that enhances production scheduling and resource utilization through data-driven decision-making [14]. Group 4: Environmental and Economic Goals - The solution aims to achieve both green and economic objectives by integrating electric equipment, charging stations, and energy storage systems into a smart energy management platform, optimizing electricity usage strategies with AI [15]. - In practical applications, the solution has demonstrated significant value, including increased efficiency, reduced safety incidents, and substantial carbon reduction, estimated at over 400 tons annually, equivalent to planting over 20,000 trees [18].