Central China: The future industry leader in the mechanical industry, with a focus on cyclical recovery and future industrial investment opportunities.

Central China released a research report stating that the 15th Five-Year Plan will focus on industries such as aerospace, low-altitude economy, hydrogen energy, nuclear fusion, and artificial intelligence, bringing clear strategic opportunities for the machinery industry. Despite the market correction in November, sectors such as humanoid Siasun Robot & Automation and AIDC equipment experienced short-term pullbacks, while defense-oriented sectors such as construction machinery and high-speed rail equipment highlighted their defensive value. With the improvement in market sentiment and increased risk appetite, these science and technology growth sectors still have investment opportunities, and it is recommended to keep an eye on them. Key points highlighted by Central China: Investment points: In November, the CICC Machinery sector fell by 5.02%, underperforming the Shanghai and Shenzhen 300 Index (-3.24%) by 1.78 percentage points, ranking 26th out of 30 CICC primary industries. As of the closing on November 25, by 2025, the CICC Machinery sector fell by 5.02% in November, underperforming the Shanghai and Shenzhen 300 Index (-3.24%) by 1.78 percentage points, ranking 26th among the 30 CICC primary industries. In November, the three tertiary sub-industries of aerial work vehicles, other transport equipment, and shipbuilding saw positive growth performances with increases of 2.22%, 1.35%, and 0.31% respectively; lithium battery equipment, forklifts, and photovoltaic equipment were among the top decliners. Policy dividends clear, emerging areas open up growth space In the 15th Five-Year Plan, emerging industries such as aerospace, low-altitude economy, hydrogen and nuclear fusion, and artificial intelligence are highly relevant to the machinery industry. These key industries planned in the 15th Five-Year Plan for emerging and future industries will provide clear strategic guidance and new investment opportunities for the industry. Market short-term adjustments highlight the defensive value of stable domestic demand sectors In November, there was a significant market correction, with sectors such as shipping and aerial work vehicles showing relatively good performance compared to the previously weak sectors. Solid-state battery equipment, humanoid Siasun Robot & Automation, and AIDC support equipment saw significant pullbacks in strong sectors. The bank recommends focusing on domestic demand-oriented sectors with good fundamentals, stable profits, high dividends and dividend yields, such as construction machinery, high-speed rail equipment, and mining and metallurgical equipment leaders. Market sentiment is relatively good, with an increase in risk appetite, which is favorable for investing in science and technology growth sectors. The growth trend still has potential, and adjustments bring layout opportunities Although thematic sectors such as humanoid Siasun Robot & Automation, AIDC support equipment, and semiconductor equipment have experienced corrections recently, their long-term growth logic remains unchanged. With the improvement in market sentiment and increased risk appetite, these science and technology growth sectors still offer continuous investment opportunities, and it is recommended to keep an eye on them. The bank recommends continuing to focus on traditional engineering machinery (especially recommending Sany Heavy Industry, XCMG Construction Machinery, Zhejiang Dingli Machinery, etc.), shipbuilding leaders (China CSSC), and mining and metallurgical equipment leaders (especially recommending Citic Heavy Industries, ZMJ Group, etc.) with good fundamentals, stable profits, high dividends, and dividend yields. In terms of thematic investments, it is suggested to focus on humanoid Siasun Robot & Automation's main body and core component leaders (especially recommending Estun Automation, Leader Harmonious Drive Systems, Kinco Automation (Shanghai) Co., Ltd, Shenzhen Zhaowei Machinery & Electronics, Zhejiang Jiecang Linear Motion Technology, etc.) and AIDC construction-beneficiary targets such as Shenzhen Envicool Technology and Anhui Yingliu Electromechanical. Risk warning: 1) Macroeconomic development lower than expected; 2) Downstream industry demand, export demand lower than expected; 3) Continued rise in raw material prices; 4) Changes in policies and industry conditions in the new energy industry; 5) Domestic substitution, technology iteration, and progress in domestic equipment renewal lower than expected.