Donghai Securities: Excavator sales reached 200,000 units for the whole year, with approval of large-scale hydropower projects boosting demand.

date
09/01/2025
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GMT Eight
East Sea Securities released a research report stating that with the continuous implementation of large-scale equipment renewal policies and real estate financial policies, domestic demand is gradually recovering and warming up. On the overseas front, domestic enterprises are expanding their overseas pre-sales and after-sales networks, establishing local production capacity overseas, entering an accelerated period of globalization, gradually increasing market penetration, and effectively smoothing out domestic and foreign cycles. It is recommended to pay attention to leading companies with deep overseas layouts, high brand recognition, complete product portfolios, efficient cost management, and strong research and development capabilities. Event: The China Construction Machinery Industry Association released the sales statistics of major excavator and loader manufacturers for December 2024. Key points from East Sea Securities: Excavators: In December 2024, sales of various types of excavators reached 19,369 units, an increase of 16% year-on-year. Of these, 9,312 units were sold domestically, an increase of 22.1% year-on-year; and 10,057 units were exported, a 10.8% increase year-on-year. In 2024, a total of 201,131 excavators were sold, a 3.13% year-on-year increase, with 100,543 units sold domestically, an 11.7% increase year-on-year, and 100,588 units exported, a 4.24% decrease year-on-year. In December 2024, 9 electric excavators were sold. Loaders: In December 2024, sales of various types of loaders reached 9,410 units, a 0.08% decrease year-on-year. Of these, 4,501 units were sold domestically, a 19.6% decrease year-on-year, and 4,909 units were exported, a 28.5% increase year-on-year. In 2024, a total of 108,209 loaders were sold, a 4.14% year-on-year increase, with 53,883 units exported, a 13.8% increase year-on-year. In December 2024, 854 electric loaders were sold. Excavator total sales reach 200,000 units Domestically, in December 2024, domestic sales of excavators increased by 22.1% year-on-year, with domestic sales growth continuing to expand. According to the National Bureau of Statistics, as of November 2024, domestic fixed asset investment in infrastructure continued to strengthen, increasing by 9.39% year-on-year; specifically, fixed asset investments in the mining and water management industries increased by 10.30% and 40.90% respectively, continuing to drive downstream demand. At the same time, local governments are promoting large-scale replacement of old equipment subsidy policies, stimulating downstream renewal demand, and domestic excavator sales are steadily recovering. From the perspective of domestic construction start-ups, the working hours of Komatsu excavators in December were 108 hours, an increase of 17.6 hours year-on-year, indicating a recovery in downstream construction that is approaching the level at the end of 2021. Overseas, in December 2024, excavator exports increased by 10.85% year-on-year, with export monthly sales growth for 5 consecutive months. Additionally, on December 19, the Federal Reserve announced a 25bp interest rate cut, initiating an interest rate reduction cycle overseas, which is expected to drive investment in overseas real estate and infrastructure-related industries, gradually improving the export market. Looking at the total data, total excavator sales in China in 2024 increased by 3.13% year-on-year, with cumulative sales exceeding 200,000 units, in line with expectations. Continuous growth in loader exports, clear trend towards electrification In December 2024, the total sales of loaders decreased by 0.08% month-on-month, with a 28.5% increase in overseas sales. In 2024, a total of 11,220 electric loaders were sold, with an electrification penetration rate of 10.37% for the year. With the gradual expansion of downstream applications for electric loaders and their increasing market acceptance due to their economic efficiency and government policy support, there is a clear trend towards loader electrification. Approval granted for large-scale hydropower projects, continuous investment in railway infrastructure for 25 years According to Xinhua News Agency on December 25th, approval has been granted for the Lower Reaches of the Yarlung Zangbo River Hydropower Project, with the new hydropower project expected to generate more than three times the energy output of the Three Gorges Project, with the total infrastructure investment expected to exceed trillions of RMB, greatly boosting domestic demand for construction machinery. In addition, on January 2nd, China Railway Group held a work conference, stating that in 2025, it will complete the national railway investment task comprehensively, push forward national key projects of high quality, strive to complete infrastructure investments of 590 billion RMB, put into operation new lines of 2600 kilometers, and ensure the construction demand for domestic railway infrastructure in 2025. Recommendations: It is recommended to pay attention to leading companies with deep overseas layouts, high brand recognition, complete product portfolios, efficient cost management, and strong research and development capabilities Such as Sany Heavy Industry (600031.SH), XCMG Construction Machinery (000452.SZ), ZOOMLION (01157,000157.SZ), Guangxi Liugong Machinery (000528.SZ), Shantui Construction Machinery (000680.SZ), Jiangsu Hengli Hydraulic (601100.SH), and others. Risk warning: Risk of raw material price fluctuations; Risk of exchange rate fluctuations; International trade risks; Risks of policies falling short of expectations.

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