20250408-招银国际-Strong_domestic_sales_of_earth-moving_machinery_in_Mar_5页_688kb

Capital Goods Summary

Core Content

The document provides an analysis of the China Capital Goods Sector, with a focus on earth-moving machinery sales in March 2025 and the broader outlook for the industry. It highlights the performance of key companies and the potential impact of domestic and international demand on the sector.

Key Sales Data

Excavator Sales

• March 2025: Domestic sales increased by 29% YoY to 19,517 units, while exports rose 3% YoY to 10,073 units.
• 1Q25: Total excavator sales grew by 23% YoY, with domestic sales up 38% and exports up 6%.
• Excavator Sales Resilience: Strong growth is attributed to domestic replacement demand, which is less impacted by trade tensions.

Wheel Loader Sales

• March 2025: Domestic sales rose 23% YoY to 8,168 units, and exports increased 1% YoY to 5,749 units.
• Electric Wheel Loaders: Electric wheel loader sales reached 2,800 units in March, a 3x YoY increase, making up 20% of total wheel loader sales, a record high.
• 1Q25: Total wheel loader sales grew 15% YoY, with domestic sales up 25% and exports up 5%.

Main Points

• Strong Domestic Demand: The domestic market for earth-moving machinery showed robust growth, especially in excavators, driven by replacement demand.
• Export Growth: While export growth was modest, it was still positive, indicating a stable international presence.
• Electric Vehicles: The rise in electric wheel loader sales reflects a growing trend towards sustainable and efficient machinery.
• Company Performance:
  • SANY Heavy (600031 CH): Maintained a BUY rating due to strong excavator sales and strategic overseas expansion.
  • Zoomlion (1157 HK / 000157 CH): Also rated BUY, with a strategic focus on emerging markets, though the US market contributes less than 1% of revenue.
• Market Outlook: Emerging markets are expected to be the key growth driver, and the domestic market is anticipated to stabilize.

Downstream Applications

Overseas Revenue Contribution

Note: Weichai Power's overseas revenue is partially attributed to its 46.5% interest in KION, which is a major source of overseas revenue.

Investment Ratings

• BUY: Indicates potential return of over 15% over the next 12 months.
• HOLD: Indicates potential return of +15% to -10% over the next 12 months.
• SELL: Indicates potential loss of over 10% over the next 12 months.
• OUTPERFORM: Suggests the industry is expected to outperform the broad market benchmark.
• MARKET-PERFORM: Indicates the industry is expected to perform in-line with the broad market benchmark.
• UNDERPERFORM: Suggests the industry is expected to underperform the broad market benchmark.

Analyst & Disclaimer

• The report is authored by Wayne FUNG, CFA, and is intended for institutional investors.
• It includes important disclosures regarding the risks of investing and the fact that it is not tailored to individual investors.
• CMBIGM provides the report solely for informational purposes and does not guarantee the accuracy or completeness of the information.
• The report is not an offer or solicitation to buy or sell securities and is subject to change without notice.

Legal & Distribution Notes

• The report is distributed only to specific categories of investors in the UK, US, and Singapore, depending on jurisdiction.
• In the US, the report is intended solely for major institutional investors and not for retail investors.
• In Singapore, the report is distributed by CMBISG, an Exempt Financial Adviser, and is subject to legal responsibility as defined by local regulations.