According to the research report released by Northeast Securities, the domestic construction machinery industry's domestic and foreign sales data continue to improve, and export concerns have not changed the industry's development trend, narrowing the decline. It is expected to reach an inflection point in 2024/2025, and it is recommended to pay attention to related leading enterprises. The AI conference had more participating companies this year, and their products are more mature. Chinese robotics companies include Tesla, Kepler, Data and Tianlian. From the perspective of application scenarios, including hospitals, nursing homes, education and scientific research, there is an accelerating trend in commercial exploration within this year.

1. This week's market performance and core views of the machinery sector

1. Market performance: This week, the SWS Machinery and Equipment sector fell by 1.20% and ranked 11th in the SWS classification. Among the SWS Machinery three-level industries, except for agricultural machinery, rail transit equipment III, and other sectors, all other sectors fell. Among them, the whole set of construction machinery, construction machinery parts, and other automation equipment have experienced major declines.

2. Core views & key recommendations: In the first half of the year, the sales growth of construction machinery was strong, and export concerns narrowed. It is expected to reach an industry inflection point in 2024/2025, and it is recommended to pay attention to related leading enterprises;

[Construction Machinery] The domestic and foreign sales data of construction machinery continue to improve, and the export concerns have not changed the industry's development trend. We recommend continued focus.

In June 2024, sales of various types of excavators were 16,603 units, an increase of 5.31% year-on-year, of which 7,661 were domestic, an increase of 25.6% year-on-year, and 8,942 were exported, a decrease of 7.51% year-on-year. From the data, domestic sales continue to be positive, and the decline in exports has continuously narrowed. From the perspective of the historical cycle analysis, 2024 or 2025 will be the industry's inflection point. Recently, the tariff policy in overseas regions has attracted market attention. In the short term, the increase in tariffs in Indonesia and other places has no impact on the sector, while there is a certain risk of tariffs in North America and other regions. In the long run, tariff impacts are unavoidable, but with the gradual improvement of domestic enterprises' overseas layout and continued improvement in competitiveness, exports remain the industry's focus of development.

[General Equipment] The recovery of the general equipment sector's prosperity is slow. It is recommended to pay attention to undervalued opportunities after the interim report.

From recent industry tracking, the prosperity of the general equipment sector still has pressure, and the phenomenon of increasing revenue but not profit is relatively obvious. The June PMI index was 49.5, which is still below the boom-bust line and is basically consistent with the micro-tracking situation. Recently, the sector has experienced more corrections, and it is recommended to pay attention to bottom opportunities in the future.

Risk Warning: Downside risk under macroeconomic environment; international geopolitical risk; risk that the speed of technological progress is slower than expected.