Guoyuan: Under the multiple catalysis, the development of engineering machinery is promising. Large-scale engineering projects drive the formation of new growth engines.

Guoyuan released a research report stating that the investment quantity and scale of major construction projects across the country will remain at a high level for the next 25 years, leading to an expected increase in demand for construction machinery and equipment. The construction of the downstream hydropower project on the Yarlung Tsangpo River has officially started, driving the demand for construction machinery. The total investment in this project is as high as 1.2 trillion yuan, and the expected procurement scale of construction machinery will reach 120-180 billion yuan. It is recommended to pay attention to Sany Heavy Industry (600031.SH), XCMG Construction Machinery (000425.SZ), and Guangxi Liugong Machinery (000528.SZ). Guoyuan's main points are as follows: Industry Overview: Large market size, industry chain from top to bottom Construction machinery is one of the key pillar industries supporting the development of the national economy. The main application areas of construction machinery are wide-ranging, including urban and rural roads, urban infrastructure construction, national defense, water conservancy, etc. The application scope is wide, with a variety of products, belonging to a capital, labor, and technology-intensive industry. According to data from the China Industrial Research Institute, the market size of China's construction machinery market will reach 23.4 billion US dollars by 2024, accounting for about 11.0% of the total global size. It is expected to grow to 57 billion US dollars by 2030, with a CAGR of approximately 16%. Excavators, cranes, and loaders occupy the main market space, and the future trend is expected to be favorable. In 2025, the sales of excavators, the main construction machinery product, totaled 174,039 units from January to September, an 18.1% year-on-year increase. The construction machinery industry chain mainly includes upstream raw material component suppliers, midstream construction machinery manufacturers, and downstream covering multiple industries and fields. The concentration of the domestic construction machinery industry market is relatively high, and enterprises are in a competitive ladder position. The global situation shows a "three-legged" trend, with Chinese companies transitioning from followers to leaders. Development Trends: Policy stimulates growth potential, technological innovation and overseas expansion establish advantages In recent years, China has issued a series of important policies in the industry, providing strong support and guidance for the construction machinery industry. The policies mostly focus on the strategic goal of building a manufacturing powerhouse, focusing on equipment renewal in the industrial sector, the green development of manufacturing, improving the efficiency of quality infrastructure, and deepening the application of intelligent manufacturing. The "Suggestions on Formulating the 15th Five-Year Plan for National Economic and Social Development" issued by the CPC Central Committee in October 25 states that the status and competitiveness of industries such as machinery in the global industrial division of labor should be optimized. China's construction machinery industry is embracing a technological innovation wave with "intelligence, high-end, and green" as the core, with leading companies continuously leading the industry upgrade through breakthrough product development. China's construction machinery industry is actively exploring overseas markets and has achieved significant results through diversified market layouts. Chinese companies are accelerating their globalization strategy through a combination of "deep localization" and "global networkization". Risk Factors Risks of policy implementation falling short of expectations; risks of macroeconomic fluctuations and downstream demand; competition risks brought about by technological upgrades and transformations; risks of supply chain stability in the industry chain; risks of international market expansion and geopolitical risks.