HK Stock Market Move | ZOOMLION (01157) rose more than 4% in December, domestic excavator sales in line with CME expectations, and the domestic market is in an upward cycle channel.

ZOOMLION (01157) rose more than 4%, as of the time of publication, it increased by 3.94% to 5.54 Hong Kong dollars, with a trading volume of 25.1154 million Hong Kong dollars. Soochow released a research report pointing out that by December 2024, sales of all types of excavators reached 19,369 units, a year-on-year increase of 16%. Domestic sales amounted to 9,312 units, an increase of 22.1% year-on-year; exports amounted to 10,057 units, an increase of 10.8% year-on-year, with domestic sales meeting CME's previous expectations and exports exceeding expectations. In terms of the domestic market, the faster-than-expected growth is mainly due to the high prosperity of water conservancy projects and mines, which has led to strong demand for small and large excavators; exports have been boosted by inventory reduction and significant recovery in some regions (such as the Indonesian market). As of October 2024, China's export of construction machinery to Indonesia has turned positive year-on-year, compared to a 19% decline in the first half of the year, indicating significant demand recovery in Indonesia since Q3. The report continued to point out that looking ahead to 2025, the domestic market is in a period of upturn, with excavator sales expected to increase by around 10%; in terms of exports, the impact of major regional elections in 2025 is expected to be eliminated, and with the moderate economic recovery in key regions, the decline in excavator sales is expected to significantly narrow. Based on the continuing recovery of the construction machinery industry in 2025, it is predicted that the revenue growth of major domestic manufacturers in 2025 will be around 15%, and profit growth around 20%. With the current valuation position relatively low, they are considered as a high-cost-effective conservative asset allocation. Key recommendations include ZOOMLION and other similar targets.