GF Securities: From a rate hike cycle to a rate cut cycle, optimistic about the global manufacturing investment uptrend.

GF SEC releases research report that optimistic about the global manufacturing sector investment trend, and recommends focusing on overseas resources, industrial products in Europe and America, consumer goods in Europe and America, and supply chain companies. (1) Resources have assets that have global pricing power, such as oil and gas, offshore engineering, mining, shipbuilding, etc.; (2) Industrial products have assets with increasing market share overseas, such as engineering machinery, forklifts, high-end machinery, etc.; (3) Consumer goods with elasticity under the background of interest rate cuts, such as U.S. hand tools outperforming furniture and home appliances in the last interest rate cut cycle; (4) Companies deeply involved in the global industrial supply chain. GF SEC's main points are as follows: Global transition from interest rate hikes to interest rate cuts (1) United States: According to the latest forecast from Fed Watch in September 2025, the Federal Reserve will cut interest rates three times from September to December 2025; (2) Europe: According to Wind, from June 2024 to June 2025, the European Central Bank has cut interest rates continuously 8 times; (3) Emerging countries: China, South Africa, India, Mexico, and Turkey have all entered an interest rate cut cycle in 2025. Manufacturing reshoring, renewed industrialization in Europe and America brings expansion (1) Global: The global PMI reached a 14-month high in August, with 18 out of 33 sample countries showing growth in PMI, with strong performance in Southeast Asia, Europe, and the United States; (2) Europe: The fiscal stimulus in Germany has shown significant effectiveness, according to S&P Global data, Germany's manufacturing PMI rose above the 50 threshold line for the first time in August; Looking at the PPI sub-items of the 27 EU countries, industries such as machinery and metal manufacturing are expanding; (3) United States: The United States is promoting manufacturing reshoring through external tariffs and internal tax cuts, driving a significant increase in construction spending. The previous reshoring focused on the technology industry such as chips, while this round places more emphasis on traditional industries such as metal manufacturing. U.S. inventory levels at historic lows, restocking cycle begins According to Wind, the U.S. manufacturing industry passively restocked as demand declined from 2022 to 2023, actively destocking in 2024 as demand hit its lowest point. Restocking has been ongoing for 20 months now. (1) In terms of upstream and downstream, retailers have restocked the most thoroughly, leading to a trend of restocking in the manufacturing and wholesale sectors; (2) By industry, based on the inventory-sales ratio and new orders of various sub-industries of U.S. machinery, industries currently in an expansion phase are construction machinery > industrial machinery > air conditioning and refrigeration equipment > turbines and generators, etc.; (3) At the micro level, excavator sales in the United States have rapidly recovered in the context of weak infrastructure and real estate sectors, with a confirmed restocking trend. Industrial products have greater resilience and sustainability, with weak fluctuations; U.S. consumer goods have mostly destocked and have not yet begun restocking. Consumer goods are more sensitive to interest rates, have greater recovery elasticity, and are more volatile. Risk warning: Trade friction risk; Macro-economic risk; Intensified competition risk.