According to Zhitong Finance APP, Caixin Securities published a research report stating that the excavator market is highly correlated with the development of the industrial economy. As of November, the total working hours of machinery in the country have continued to grow for five consecutive months, with excavator operating performance ranking first. With continued support from national policies, the industrial economy is likely to further solidify and continuously expand market demand, injecting vitality into the construction machinery sector. The Ministry of Industry and Information Technology has released guidelines for the update of key industrial equipment, continuously strengthening the foundation of industrial economic operation, promoting the expansion of domestic demand in china, and creating a growing space for excavators. The valuation repair is bullish, maintaining a "leading the market" rating.

Caixin Securities' main points are as follows:

CME expects excavator sales in china to continue to increase in November.

According to CME data disclosed by Construction Machinery Magazine, the total number of excavator sales in china is expected to be around 16,900 units in November 2024, with domestic sales expected to be 8,600 units, an increase of nearly 15% year-on-year, and exports of about 8,300 units, an increase of nearly 12% year-on-year.

Compared to the first three months, according to iFind data, the export volume of excavators has significantly increased year-on-year, mainly due to the gradual recovery of overseas demand and the improving export market. Since the third quarter, the monthly sales of excavators in china have shown a month-on-month improvement. At the end of September, the Ministry of Finance announced a package of incremental policies to stabilize the real estate and infrastructure markets, leading to a rebound in the construction machinery downstream's prosperity, with domestic demand gradually improving.

The total working hours of machinery in the country have continued to grow for five consecutive months, with excavator operating performance ranking first.

On November 15, 2024, CCTV Finance released the latest data from the excavator index. In October, the national comprehensive machinery operating rate was 52.08%. From June to October, the total operating hours have continued to grow, with a cumulative increase of 20.19% and a month-on-month increase of 11.79% in October. Among them, excavators performed outstandingly, leading in operating rate and total working hours among large equipment categories with increases of 2.08% and 12.73% respectively. The outstanding performance of the excavator operating data indicates that there is still development space for new and expansion projects of excavators before the end of the year.

National fiscal policies help to expand domestic demand, while the equipment manufacturing industry solidifies the foundation for industrial operation.

In October 2024, benefiting from the incremental policy issued by the Ministry of Finance at the end of September, according to the National Bureau of Statistics, infrastructure construction investment in our country grew by 4.3% year-on-year from January to October, up by 0.2 percentage points from the previous month, marking the first recent rebound in infrastructure investment. In terms of industrial production, the overall operation remains stable. In October, production activities in the above-scale industrial sector of our country continued to show robust growth momentum, with an added value of +5.3% compared to the same period last year, maintaining a stable upward development trend.

Among them, the added value of the equipment manufacturing industry increased by +6.6% year-on-year, which is 1.3 percentage points faster than the overall above-scale industry, remaining above the overall above-scale industry for 15 consecutive months. With the continued support of national policies, the development of the industrial economy is likely to further solidify, continuously expanding market demand and injecting vitality into the construction machinery sector.

The Ministry of Industry and Information Technology has issued guidelines for the renewal of key industrial equipment, helping to increase the production of excavator products.

According to the "Large-scale Equipment Renewal and Consumer Product Exchange Action Plan" and the "Implementation Plan for Promoting Equipment Renewal in the Industrial Field" released in the first half of 2024, the Ministry of Industry and Information Technology issued the "Guidelines for Equipment Renewal and Technological Transformation in Key Industrial Sectors" on September 20. It mentioned that for the construction machinery industry, the focus should be on promoting the intelligent upgrade of production and manufacturing equipment and production lines. Data from the National Bureau of Statistics also shows that in October, the production of excavating and earth-moving transportation machinery products experienced growth, with an increase of 28.4%. Among them, the production of excavators in October was 25,182 units, a year-on-year increase of 46.53%.

Investment advice:

Recommend paying attention to,

1. sany heavy industry (600031.SH): Excavation machinery continues to maintain a leading market share and sales levels within the industry, with electric excavators continuously making breakthroughs;

2. zoomlion (000157.SZ): Complete range of excavators, equipped with efficient and stable electronic control hydraulic systems;

3. guangxi liugong machinery (000528.SZ): Excavator business maintains steady growth, with fundraising projects continuously supporting the research and production of excavator products;

4. xcmg construction machinery (000425.SZ): Excavator business shows bright performance overseas.

Risk warning: Industry cyclical fluctuation risk; raw material price and exchange rates fluctuation risk; domestic equipment upgrade implementation not meeting expectations risk.