Hong Kong stock market concept tracking | Excavator market sentiment rebounded in June! Sales in the first half of the year better than expected, leading engineering machinery companies are expected to benefit from rising volume (including concept stocks)

date
11/07/2025
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GMT Eight
After a brief decline in domestic sales of excavators in May, the domestic and international market sentiment for excavators rebounded in June. Overall, the sales volume of excavators both domestically and internationally in the first half of the year performed better than expected.
According to statistics from the Construction Machinery Industry Association, in June 2025, sales of various excavators reached 18,804 units, a year-on-year increase of 13.3%. Of this, domestic sales were 8,136 units, up 6.2% year-on-year; exports were 10,668 units, an increase of 19.3% year-on-year. From January to June 2025, a total of 120,520 excavators were sold, an increase of 16.8% year-on-year; of which domestic sales were 65,637 units, up 22.9% year-on-year; exports were 54,883 units, up 10.2% year-on-year. After a brief decline in domestic excavator sales in May, both domestic and export sales of excavators rebounded in June, with overall sales in the first half of the year better than expected. Analysis points out that in June, domestic sales of excavators increased by 6.2% year-on-year, with a growth rate 7.7 percentage points higher than the previous month, exceeding expectations. This may be mainly due to the accelerated export of second-hand excavators driving domestic inventory digestion and other factors such as the low base in the same period last year. Looking downstream, the year-on-year growth rate of new housing construction in China decreased from 29.6% in the first two months of 2025 to 22.8% by the end of May. The sluggish real estate demand continued to weaken the sales of excavators. However, from January to May this year, China's infrastructure investment (excluding electricity) maintained a growth rate of 5.6%, showing strong resilience in infrastructure investment. In addition, according to Hc360 Construction Machinery, in May, Beijing and Guangzhou successively introduced policies prohibiting the use of non-road mobile machinery, and equipment that does not meet the National III environmental standards is expected to be cleared faster. This will drive the accelerated release of demand for construction machinery renewal, and it is expected that the domestic sales of products such as excavators will continue to grow throughout the year. Looking forward to the second half of the year, industry insiders in the construction machinery industry chain believe that sales of traditional machinery such as excavators are expected to remain stable and steadily increase. Domestic earthmoving equipment is expected to maintain a growth rate of more than double digits for the whole year, while overseas exports will focus more on emerging businesses such as agricultural machinery and mining machinery. Specifically, regarding the changes in excavator sales in the second quarter and sales expectations for the second half of the year, a spokesperson from Guangxi Liugong Machinery (000528.SZ) securities department stated that in April, the growth structure of excavators saw a noticeable shift. On one hand, the concentrated procurement period for agricultural and rural construction is gradually passing, leading to a slowdown in the growth of small excavators; on the other hand, the recovery of demand in the domestic mining industry and the acceleration of project commencement have led to a restorative growth in demand for medium and large excavators. Combined with the acceleration of equipment renewal, the demand for excavators as a whole has entered a period of rational growth. With the equipment renewal and the demand from mining and major water conservancy projects, the company predicts that the demand for domestic earthmoving equipment will continue to grow steadily in the second half of the year, with annual growth of more than double digits. Regarding the expansion of overseas business, the spokesperson of the above-mentioned company stated that the company's overseas business has continued to grow steadily this year, especially in most emerging regions where high-speed growth has been maintained. It is expected that overall demand overseas will decline this year, but there will be differentiation in different regions. The company is enhancing its advantageous position in emerging regions while actively expanding its business in Europe and America. A spokesperson from ZOOMLION (000157.SZ) mentioned that this year, the performance of traditional advantageous sectors has exceeded expectations, and the industry's recovery trend has transitioned from excavators to non-excavators. With the macro background of strengthening domestic demand, it is expected that domestic sales for the whole year will see growth. ZOOMLION's business has expanded from the domestic engineering machinery market to the global market (engineering machinery + agricultural machinery + mining machinery), constantly expanding its product spectrum. EB SECURITIES pointed out that the recent sales growth in the construction machinery industry provides a good short-term catalyst for the industry. The supportive policies of the two sessions towards the construction machinery industry are significant, ensuring continuous recovery of demand in the medium term. As the internationalization and electrification processes of the construction machinery industry progress, leading construction machinery enterprises are expected to benefit together. In the short term, domestic construction machinery sales from January to June have outperformed expectations, showing a trend of continued recovery and providing a good catalyst. From the perspective of growth sources, the continuous growth of equipment renewal and replacement is expected to drive sales of construction machinery. The sales of construction machinery such as excavators experienced a rapid increase from the bottom in 2015 to the peak in early 2021. Considering that the typical service life of construction machinery is 8-10 years, it is estimated that there will be a compound replacement growth of around 30% in domestic construction machinery in 2025 and the following years, contributing significantly to the recent surge in sales data. In addition, a large number of second-hand construction machinery is exported to developing countries, which objectively reduces the inventory of construction machinery in China and is another reason for the increase in sales of new machinery. Looking at the medium term, the policies of the two sessions provide significant support, ensuring a sustained recovery of demand in the medium term for construction machinery. In terms of funding, the 2025 government work report proposed issuing special ultra-long-term national bonds totaling 1.3 trillion Yuan this year, an increase of 300 billion Yuan from the previous year; accelerating the implementation of key projects to facilitate the smooth completion of major projects outlined in the 14th Five-Year Plan; planning to allocate 4.4 trillion Yuan in local government special bonds, an increase of 500 billion Yuan from the previous year, mainly for investment in construction, land acquisition and storage, acquisition of existing commercial housing, and debt management by local governments. The report stressed the need to intensify countercyclical adjustments to fiscal policy, especially through the issuance of special government bonds, special bonds, and debt-to-equity swaps, which are expected to stimulate infrastructure investment and drive downstream equipment demand. In terms of structure, the 2025 government work report called for the deepening of the implementation of the new urbanization strategy, the continuous advancement of urban renewal and the transformation of old urban neighborhoods, the acceleration of the improvement of urban flood control and drainage systems, as well as the construction of gas, water supply and drainage, heating, underground pipeline corridors, and other infrastructure; the development of digitized and intelligent infrastructure, and the improvement of accessibility and aging-appropriate facilities. The report indicates that the government will continue to increase investment in urban infrastructure to promote the development of new urbanization, especially in areas such as underground engineering, municipal construction, and water conservancy projects, where the demand for construction machinery will continue to grow. Related concept stocks: ZOOMLION (01157): In Q1 2025, the company achieved revenue of 12.117 billion Yuan, a year-on-year increase of 2.92%; net profit attributable to shareholders was 1.41 billion Yuan, a year-on-year increase of 53.98%. The company's domestic sales are currently transitioning from excavators to non-excavation equipment, and traditional advantageous sectors like concrete machinery and lifting machinery are expected to benefit from domestic demand elasticity; in terms of overseas operations, although there is uncertainty due to tariffs in the short term, the company's globalization strategy is becoming increasingly mature, and overseas business growth is expected to continue. Additionally, strategic sectors such as earthmoving machinery, agricultural machinery, and mining machinery are being actively expanded and are expected to continue to contribute incremental growth. SANY INT'L (00631): In Q1 2025, revenue was 5.876 billion Yuan, a year-on-year increase of 14.6%; net profit attributable to shareholders was 635 million Yuan, a year-on-year increase of 23.2%, in line with expectations. Due to weak demand, domestic coal prices are in a downward trend. Currently, the demand for domestic roadheaders and wide-body trucks shows strong resilience, while there is intense competition in the hydraulic support price. It is expected that the company's overseas sales of wide-body trucks and large mining trucks will grow well. With product iteration and user comprehensive cost reduction, it is expected that the company's large mining trucks and related aftermarket will provide significant long-term growth space. MORIMATSU INTL (02155): MORIMATSU INTL is committed to being a leading supplier and service provider in the industrial field for core equipment, value-added services, and digitized factory solutions. The company's main business includes design, manufacturing, installation, and operation services, mainly used in core equipment, process systems, and integrated solutions for chemical, biological, and polymer reactions (including process packages, detailed design, modular factory delivery, pre-sale, and after-sale services, etc.).