20250808-招银国际-Capital_Goods_Strong_domestic_sales_and_export_of_excavators_in_Jul_4页_767kb

Capital Goods Sector Update: August 2025

Key Findings:

• Excavator sales in July 2025 showed significant year-over-year growth, with 17,138 total units sold, driven by a 32% export increase and a 17% domestic sales rise, accelerating from June. This strong performance supports a positive outlook for the replacement-driven up-cycle, with potential from emerging markets, including the Yarlung Zangbo River mega hydro power project adding 2-3% annual demand.

• Wheel loader sales in July grew 7% YoY to 9,000 units, with electric models reaching record levels (26.6% of total sales as of July), suggesting a trend toward sustainable technologies.

• Research recommends buying SANY Heavy (600031 CH), Zoomlion (1157 HK / 000157 CH), and SANY International (631 HK) due to strong fundamentals and attractive valuations, while holding Jiangsu Hengli and Dingli, citing mixed results.

• Positive outlook includes growth from rural highway infrastructure projects in China, solidifying earth-moving machinery demand, and comparisons with global players. Future projections highlight continued momentum from replacement cycles and expansion into developing regions.

• Risks include market volatility, dependency on export markets, and potential tariff impacts, as warned in disclaimers. Actual outcomes may differ due to unforeseen factors.

See attached report for detailed data, charts, and further disclosures.