20250318-招银国际-Capital_Goods__Who_are_the_potential_beneficiaries_of_Germany_s_mega_infrastructure_investment_plan__3页_579kb

Summary of Germany's Mega Infrastructure Investment Plan and Its Impact on Chinese Capital Goods Sector

Core Content

Germany's proposed €500bn infrastructure investment plan, set for parliamentary approval on 18 March, marks a significant shift in the country's fiscal policy. The plan focuses on key sectors such as transportation, energy, defence, and digital infrastructure, with a special fund allocated over the next 12 years. This initiative is expected to stimulate demand for industrial equipment and machinery, particularly benefiting companies with substantial European market exposure.

Potential Beneficiaries

The following Chinese companies are identified as potential beneficiaries of the German infrastructure plan due to their significant presence in the European market:

• Weichai Power (2338 HK / 000338 CH, BUY)

  • Controlling shareholder of KION Group (KGX GR), a major European industrial truck manufacturer.
  • KION contributed €4.99bn in revenue from Western Europe in 9M24, accounting for 59% of KION's total revenue.
  • KION represented 11% of Weichai's attributable net profit in 1H24.
  • In our SOTP valuation, KION accounts for ~11% of our target price.
  • Weichai's attributable overseas revenue is estimated to be 30-40% of total revenue when adjusted for KION's contribution.

• Zhejiang Dingli (603338 CH, BUY)

  • Europe accounts for ~20% of Dingli's total revenue (approximately half from EU countries within the 20%).
  • Current EU anti-dumping duties on Dingli's AWP products are 20.6%, significantly lower than the 30-55% imposed on other Chinese manufacturers, providing a competitive advantage.

• SANY Heavy (600031 CH, BUY)

  • Generated ~22% of total revenue from Europe in 9M24.
  • Putzmeister, a major German concrete machinery manufacturer, is owned by SANY Heavy.
  • SANY Heavy is expected to benefit from the upcycle of excavator demand and its overseas expansion strategy.

Key Information

• The plan requires approval by a 2/3 majority in parliament.
• The Greens have provided support, increasing the likelihood of approval.
• The infrastructure plan is considered a major turning point in Germany's fiscal policy.
• The report highlights the importance of overseas revenue for Chinese capital goods companies, with Weichai Power leading in this aspect.
• The report also references recent performance and market expectations for other companies in the sector, such as Zoomlion, Sinotruk, and XCMG.

CMBIGM Ratings

• BUY: Indicates a stock with potential return of over 15% over the next 12 months.
• OUTPERFORM: Suggests the industry is expected to outperform the relevant broad market benchmark.

Analyst Certification

• The analyst certifies that the views expressed in the report accurately reflect their personal views.
• No part of the analyst's compensation is directly or indirectly related to the specific views in the report.
• The analyst confirms no trading activity in the stocks covered within 30 days prior to the report's issuance and for 3 business days after.

Disclaimer

• The report contains general information and is not suitable for all investors.
• CMBIGM does not provide individually tailored investment advice.
• There are risks involved in trading any securities, and past performance does not guarantee future results.
• The information is provided for the use of intended recipients only and may not be reproduced or distributed without prior written consent.

Legal Information

• The report is distributed by CMB International Global Markets Limited, a subsidiary of CMB International Capital Corporation Limited.
• The report is subject to change without notice and may include different assumptions and analytical methods.
• CMBIGM may have investment banking relationships with the companies mentioned and may not be responsible for any conflicts of interest.