The Zhitong Finance App learned that Donghai Securities released a research report saying that with the implementation of large-scale equipment renewal policies and real estate finance policies, domestic demand is gradually recovering; on the overseas side, domestic enterprises are setting up overseas pre-sales and after-sales networks, establishing overseas local production capacity, and entering a period of accelerated globalization. The market penetration rate is gradually increasing, effectively smoothing domestic and foreign cycles. It is recommended to focus on leading enterprises with deep overseas layout, high brand recognition, perfect product matrices, efficient costs and expenses, and strong R&D capabilities.

Event: China Construction Machinery Industry Association released excavator and loader sales statistics for major companies in December 2024.

The main views of Donghai Securities are as follows:

Excavators: In December 2024, 19,369 excavators of various types were sold, up 16% year on year, with 9312 units in China, up 22.1% year on year; 1,057 units were exported, up 10.8% year on year. In 2024, a total of 201,131 excavators were sold, up 3.13% year on year, and cumulative sales achieved positive growth; it was 100,543 units in China, up 11.7% year on year; 100,588 units were exported, down 4.24% year on year. In December 2024, 9 electric excavators were sold.

Loaders: In December 2024, 9410 loaders of various types were sold, a year-on-year decrease of 0.08%. Among them, there were 4501 units in China, down 19.6% year on year; exports were 4,909 units, up 28.5% year on year. In 2024, a total of 108,209 loaders were sold, an increase of 4.14% over the previous year. Of these, 5,3883 units were exported, up 13.8% year on year. In December 2024, 854 electric loaders were sold.

Total excavator sales reached 0.2 million units

Domestically, domestic excavator sales increased 22.1% year-on-year in December 2024, and domestic sales growth continued to expand. According to the National Bureau of Statistics, domestic infrastructure fixed investment continued to gain strength as of November 2024, with a year-on-year increase of 9.39%; among them, fixed investment in the mining industry and water management industry increased 10.30% and 40.90% year on year, continuing to drive downstream demand; at the same time, various local governments promoted the implementation of large-scale subsidy policies to eliminate old equipment to stimulate downstream renewal demand, and domestic excavator sales rebounded steadily. Looking at the domestic construction side, the number of hours Komatsu excavators started in December was 108 hours, an increase of 17.6 hours over the previous year. The downstream construction side recovered, close to the level at the end of 2021.

Overseas, excavator exports increased 10.85% year-on-year in December 2024, and the monthly export sales growth rate increased for 5 consecutive months. Meanwhile, the Federal Reserve announced on December 19 that it will continue to cut interest rates by 25 bps. Overseas interest rate cuts will enter a cycle of interest rate cuts, which is expected to drive the recovery of investment in overseas real estate and infrastructure-related industries, and the export market will gradually improve. Judging from total data, in 2024, China's total annual excavator sales increased by 3.13% year on year, and the cumulative sales volume reached more than 0.2 million units, which is in line with expectations.

Loader exports continue to grow, and the trend of electrification is obvious

Total monthly loader sales fell 0.08% in December 2024, overseas increased by 28.5% in a single month, and overseas exports continued to grow. In 2024, the annual sales volume of electric loaders was 1,1220 units, and the penetration rate of electrification reached 10.37% throughout the year. With the gradual expansion of downstream application fields of electric loaders, the economy has been recognized by the market. In line with government policy support, the electrification trend of loaders is obvious.

Large-scale hydropower projects were approved, and railway infrastructure continued for 25 years

According to Xinhua News Agency on December 25, the hydropower project in the lower reaches of the Brahmaputra River was approved. The new hydropower project will generate more than three times that of the Three Gorges Project, and the total infrastructure investment amount is expected to exceed trillion yuan, which will greatly boost domestic demand for construction machinery. Furthermore, China Railway Group held a working meeting on January 2 and proposed that 2025 will fully complete national railway investment tasks, promote national key projects with high quality, and strive to complete infrastructure investment of 590 billion yuan, and put into operation 2,600 kilometers of new railway infrastructure construction needs in 2025.

Recommended attention: It is recommended to focus on leading enterprises with in-depth overseas layout, high brand recognition, perfect product matrix, efficient cost and cost, and strong R&D strength

Sany Heavy Industries (600031.SH), Xugong Machinery (000452.SZ), Zhonglian Heavy Industries (01157,000157.SZ), Liugong (000528.SZ), Shantui (000680.SZ), Hengli Hydraulic (601100.SH), etc.

Risk warning: raw material fluctuation risk; exchange rate fluctuation risk; international trade risk; risk of policies falling short of expectations.