UBS: gives "neutral" rating to ZOOMLION (01157) and XCMG Machinery (03339). Currently, the outlook for China State Construction Engineering Corporation's machinery industry is more optimistic than market expectations.

UBS released a research report stating that their view on China State Construction Engineering Corporation's machinery industry is more optimistic than market expectations. They believe that the industry is currently in an upward cycle that will continue until 2029, rather than the market's general prediction of 2028 to 2029. The growth potential of the company's mining-related business and strong profit resilience have not been fully reflected in stock performance. They estimate that Chinese equipment manufacturers' global market share in mining trucks and excavators will exceed 20% by 2030, and mining-related businesses may become another growth driver for the company. UBS has given a "neutral" rating to ZOOMLION (01157) and SANY Heavy Industry (03339), with earnings growth forecasts for 2025 to 2026 raised to 49%, 27%, 21%, and 17% respectively. XCMG Construction Machinery (000425.SZ) is their top pick in the industry, receiving a "buy" rating due to its high proportion of mining-related business, strong growth, and attractive valuation. UBS has raised the target price for ZOOMLION and SANY Heavy Industry from 6.4 Hong Kong dollars and 2.2 Hong Kong dollars to 7.8 Hong Kong dollars and 3.2 Hong Kong dollars respectively.