Hong Kong stock concept tracking | Domestic sales rebound + export data erupt again Engineering machinery sector prosperity index rebounds (with concept stocks)

The data released by the China Construction Machinery Industry Association recently showed that in 2024, a total of 201,131 excavators were sold, an increase of 3.13% year-on-year. Among them, domestic sales were 100,543 units, an increase of 11.7% year-on-year. As the "barometer" of the construction machinery industry, excavator sales in 2024 achieved a turnaround, ending the continuous decline trend and releasing positive signals. In 2024, the excavator sales, which reflect the "barometer" of the construction machinery industry, ended three consecutive years of decline. The domestic market growth rate "rebounded", and overseas sales have been maintained at over 100,000 units for three consecutive years. In December 2024, a total of 19,369 excavators of various types were sold, an increase of 16% year-on-year. Among them, domestic sales were 9,312 units, an increase of 22.1% year-on-year; and exports were 10,057 units, an increase of 10.8% year-on-year, with domestic sales meeting CME's previous expectations and exports exceeding expectations. Looking at the domestic market, the sustained outperformance is mainly due to the high prosperity of water conservancy projects and mines, with good demand for small and large excavators; exports are mainly benefiting from inventory clearance and significant recovery in some regions (such as the Indonesian market). The Founder report pointed out that in the construction machinery industry, excavators, cranes, and concrete machinery downstream are mainly driven by real estate and infrastructure, benefiting from downstream demand in agriculture, water conservancy, etc. The growth rate of small excavator sales has turned positive ahead of time, and sales of large and medium excavators are gradually stabilizing. The growth rate of excavator domestic sales has been steadily increasing year-on-year since March last year. Soochow released a research report stating that looking ahead to 2025, the domestic market is in a cyclical upward trend, and excavator sales are expected to maintain a growth rate of about 10%; in terms of the export market, the impact of major elections in various regions in 2025 will be eliminated, combined with a moderate economic recovery in major regions, the decline in excavator sales is expected to significantly narrow. Based on the continued recovery of the construction machinery industry in 2025, it is predicted that the revenue growth rate of core machinery manufacturers will be around 15% in 2025, and the profit growth rate will be around 20%, with the current valuation position relatively low, making it a high-cost-effective option for stable asset allocation. Related Hong Kong-listed construction machinery companies include ZOOMLION (01157), LONKING (03339), FIRST TRACTOR (00038), SANY INT'L (00631), Zhengzhou Coal Mining Machinery Group (00564), Sinotruk Jinan Truck (03808), Weichai Power (02338), etc.