20250610-招银国际-Capital_Goods_Excavator_demand_slowed_down_in_May__still_positive_on_replacement_cycle_4页_768kb

Capital Goods Sector Summary

Core Content

The document provides an analysis of the China Capital Goods sector, focusing on excavator and wheel loader sales in May 2025, as well as downstream applications and market outlook. It also includes analyst ratings and disclosures from CMB International Global Markets Limited (CMBIGM).

Key Sales Data

Excavator Sales

• Total sales in May 2025: 18,202 units (+2% YoY)
• Domestic sales: 8,392 units (-1% YoY)
• Export sales: 9,810 units (+5% YoY)
• 1-5M25 cumulative growth: +17% YoY (domestic: +26%; export: +8%)

Wheel Loader Sales

• Total sales in May 2025: 10,535 units (+7% YoY)
• Domestic sales: 6,037 units (+17% YoY)
• Export sales: 4,498 units (-3% YoY)
• Electric wheel loader sales: 2,800 units (+1.2x YoY), representing 26% of total wheel loader sales (slowed from +2.1x in April)
• 1-5M25 cumulative growth: +14% YoY (domestic: +25%; export: +2%)

Main Views and Insights

Excavator Market

• Despite a 1% YoY drop in domestic sales, the overall excavator market showed resilience with 2% YoY growth in total sales.
• Export growth (+5%) suggests strong international demand, which is a key driver for the sector.
• Replacement demand remains a major factor, supporting predictable growth.
• Jiangsu Hengli (601100 CH) continues to show growth in hydraulic cylinder production, indicating solid downstream orders.

Wheel Loader Market

• Domestic sales saw 17% YoY growth, likely driven by non-ferrous metal capex.
• Electric wheel loaders achieved a record high share of 26%, with significant YoY growth.
• Export sales declined slightly by 3% YoY, but domestic demand remains robust.

Market Outlook

• The BUY-rated companies include SANY Heavy (600031 CH), Jiangsu Hengli (601100 CH), and Zoomlion (1157 HK / 000157 CH).
• Analysts remain positive about the structural overseas growth trend for Zoomlion and SANY Heavy.
• The electric wheel loader segment is highlighted as a key growth driver in the sector.

Downstream Applications

Overseas Revenue Contribution

Notes:

• Certain domestic sales will become final products for export.
• Weichai Power owns 46.5% of KION (KGX GR), which is a major source of overseas revenue. Adjusted for KION, Weichai's attributable overseas revenue is estimated to be 30-40% of total revenue.

Analyst 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.
• NOT RATED: No rating provided.
• OUTPERFORM: Industry expected to outperform the broad market benchmark.
• MARKET-PERFORM: Industry expected to perform in line with the broad market benchmark.
• UNDERPERFORM: Industry expected to underperform the broad market benchmark.

Disclosures

• Analyst Certification: The analyst certifies that the views expressed accurately reflect their personal views and that compensation is not tied to the views.
• Trading Restrictions: The analyst and associates have not traded in the stocks covered within 30 days prior to the report and will not do so for 3 business days after.
• Conflicts of Interest: CMBIGM may have investment banking relationships with the companies mentioned, which could affect the objectivity of the report.
• Legal Disclaimer: The report is for intended recipients only and may not be reproduced or distributed without prior consent.

Distribution Restrictions

• The report is not for general public in the United States, United Kingdom, or Singapore.
• In the United States, it is only for major US institutional investors.
• In the United Kingdom, it is only for those falling under Article 19(5) or Article 49(2) of the relevant financial regulations.
• In Singapore, it is distributed by CMBISG, an exempt financial adviser, and is subject to legal responsibility only to the extent required by law.

Conclusion

The China Capital Goods sector remains positive, with excavator and wheel loader sales showing resilience and growth, especially in the domestic market. The electric wheel loader segment is emerging as a key growth driver, while export growth continues to support excavator demand. Analysts maintain BUY ratings for SANY Heavy, Jiangsu Hengli, and Zoomlion, reflecting confidence in their future performance and overseas expansion.