Soochow: By 2026, the certainty of offshore equipment + AI driving the structural opportunities for improving domestic demand and new technologies.

Soochow released a research report stating that in 2026, under the interest rate cut cycle of the Federal Reserve, overseas demand may enter a new uptrend cycle in 2026, and the export of engineering machinery is expected to continue to be prosperous, forming a resonance situation at home and abroad. Domestic demand is expected to bottom out, improving the demand situation, and the recommended targets include FA/injection molding machines/detection/machine tool industries. In the high prosperity track, the industry believes that the PCB equipment/liquid cooling industry chain/diesel engine & gas turbine under the catalysis of AI will usher in a golden period. In terms of new technologies, mass production of humanoid Siasun Robot & Automation still needs to break through the key link of cost reduction, and domestic component manufacturers are expected to benefit fully. The main points of Soochow are as follows: Equipment going overseas: Oilfield equipment is oriented towards the blue ocean market in the desert, and engineering machinery exports along the Belt and Road are prosperous. Engineering machinery: In 2025, the engineering machinery sector in China will fully recover domestically and have a mild recovery in exports, with a positive outlook for continuous improvement in profitability. In terms of domestic demand, under the disturbance of fund allocation, the industry expects this cycle to exhibit a lower but longer period slope; in terms of external demand, with the interest rate cut cycle of the Federal Reserve, overseas demand is expected to enter a new uptrend cycle in 2026, forming a resonance situation at home and abroad. The key recommendations for engineering machinery include Sany Heavy Industry (600031.SH), XCMG Construction Machinery (000425.SZ), ZOOMLION (000157.SZ), Guangxi Liugong Machinery (000528.SZ), and Jiangsu Hengli Hydraulic (601100.SH). Industrial forklift: The forklift industry is expected to continue to be prosperous in 2025, with domestic renewal demand and automation transformation driving growth. The forklift industry will evolve towards intelligent equipment through the "software+hardware+platform" path. Key recommendations include Hangcha Group (603298.SH), Zhejiang E-P Equipment (603194.SH), and Anhui Heli Co., Ltd. (600761.SH). Oilfield equipment: The EPC business layout in the Middle East enters a period of harvest, and there is a historic opportunity for oilfield equipment to go overseas. With deepening cooperation in the Belt and Road initiative, China's investment in the Middle East is mainly focused on the energy sector. Domestic oilfield equipment manufacturers follow EPC turnkey projects overseas, and performance is expected to continue to grow. Key recommendations for oilfield equipment include Yantai Jereh Oilfield Services Group (002353.SZ) and Neway Valve (603699.SH). Domestic improvement: Beta builds bottom-up demand improvement, recommended targets include FA/injection molding machines/detection/machine tool industries PV equipment: Entering a period of platform integration, the industrialization of perovskite/heterojunction is accelerating. The deployment of stacked battery cells at the component end drives a significant increase in the value and quantity of production equipment. Key recommendations include Suzhou Maxwell Technologies (300751.SZ), Zhejiang Jingsheng Mechanical & Electrical (300316.SZ), Outvee (688516.SH), and Qingdao Gaoce Technology (688556.SH). Lithium battery equipment: Continuous expansion of production, solid-state batteries driving demand for new equipment. Policy drive + leading manufacturer mass production exceeding expectations, the restructuring of solid-state technology drives the first-mover advantage for domestic equipment manufacturers. Key recommendations include Wuxi Lead Intelligent Equipment (300450.SZ), Shenzhen United Winners Laser Co., Ltd (688518.SH), and Zhejiang HangKe Technology Incorporated (688006.SH). Semiconductor equipment: Resonance of prosperity recovery + domestic substitution, AI & storage cycle driving high growth of equipment. Domestic equipment manufacturers are entering mature processes and specialized aspects first, and leading manufacturers are expected to accelerate production. Key recommendations include NAURA Technology Group (002371.SZ), Advanced Micro-Fabrication Equipment Inc. China (688012.SH), Jiangsu Leadmicro Nano Technology (688147.SH), Piotech Inc. (688072.SH), Suzhou Maxwell Technologies (300751.SZ), etc. Identify high prosperity track: Golden period for the PCB equipment/liquid cooling industry chain/diesel engine & gas turbine under the catalysis of AI Liquid cooling equipment: Becoming a standard for AI server cooling, the value and quantity of cold plates and CDUs are rapidly increasing. The Rubin architecture drives a doubling of power consumption per cabinet, traditional air cooling reaching its limit, the domestic supply chain facing a window of opportunity for multiple supplies, key recommendations include Wuxi Hongsheng Heat Exchanger Manufacturing (603090.SH), and a suggestion to focus on Shenzhen Envicool Technology (002837.SZ). PCB equipment usher in a new cycle of AI expansion, high-speed and high-frequency materials driving growth in drilling equipment and consumables. Mainstream manufacturers have high capital expenditure, significant room for domestication of core equipment, key recommendations include Shenzhen Han's CNC Technology (301200.SZ), Guangdong Dtech Technology (301377.SZ), a suggestion to focus on Circuit Fabology Microelectronics Equipment (688630.SH), China Tungsten and Hightech Materials (000657.SZ). Gas turbines & Diesel engines: AI computing power demand driving electricity shortages, optimistic about domestic brands entering a phase of both quantity and price increases. Gas turbines and diesel generators can be quickly formed due to AI demand, in the short term becoming the only two possibilities, and foreign supply constraints driving accelerated domestic substitution. Key recommendations for gas turbines include Yantai Jereh Oilfield Services Group (002353.SZ), Anhui Yingliu Electromechanical (603308.SH), Himile Mechanical Science and Technology (002595.SZ), and Allied Machinery (605060.SH). New technologies & directions: Humanoid Siasun Robot & Automation mass production, domestic component manufacturers fully benefiting, new photovoltaic technologies leading industrial transformation Humanoid Siasun Robot & Automation: Mass production of Optimus is imminent, and domestic component cost reduction is the key to mass production. Optimus Siasun Robot & Automation from Tesla is expected to start mass production in 2026. The mass production of humanoid Siasun Robot & Automation still needs to break through the key link of cost reduction, and domestic component manufacturers are expected to fully benefit. Key recommendations for humanoid Siasun Robot & Automation sector include Jiangsu Hengli Hydraulic (601100.SH), Hangzhou XZB Tech (603040.SH), Leader Harmonious Drive Systems (688017.SH), Qingdao Gaoce Technology (688556.SH), Miracle Automation Engineering (002009.SZ), etc. Risk Warning Risk of delayed payment for equipment going overseas, infrastructure investment below expectations, risk in the supply chain of components, and unexpected progress in technological breakthroughs.