Southwest: Engineering Machinery Exports in February Exceed Expectations, Industry Prosperity Continues to Improve.

Southwest released a research report stating that the sales of excavators in January-February 2026 have slightly decreased domestically, but exports continue to grow. The main trend of "upgrade cycle + external demand" remains unchanged, with a short-term fluctuation in domestic sales due to the mismatch of the Spring Festival, but the overall upward trend for the whole year has not changed. It is recommended to continue focusing on leading manufacturers of main engines and core components, and to pay attention to the performance and order catalysis of the "resumption of work + production realization" in March-May. Southwest's main points are as follows: Market Review In February 2026, the Shenzhen Construction Machinery Index has increased by approximately 7.35%, outperforming the Shanghai Composite Index by 6.26 percentage points, the Shanghai and Shenzhen 300 by 7.26 percentage points, and the ChiNext Index by 8.43 percentage points. Industry Tracking (1) Excavators: In January-February 2026, excavator sales were 35,934 units, a year-on-year increase of 13.10%. Among them, domestic sales were 15,478 units, a year-on-year decrease of 9.19%; while export sales were 20,456 units, a year-on-year increase of 38.8%. (2) Loaders: In January-February 2026, loader sales were 21,299 units, a year-on-year increase of 27.9%. Among them, domestic sales were 9,156 units, a year-on-year increase of 11.5%; while export sales were 12,143 units, a year-on-year increase of 43.9%. (3) Other non-excavator categories: Crane sales have recovered, with crawler > cars > mobile, and tower cranes showing a slight rebound. January car cranes totaled 1,630 units (28.7%), with 821 units sold domestically (55.2%) and 809 units exported (9.62%); crawler cranes totaled 301 units (73%), with 88 units sold domestically (126%) and 213 units exported (57.8%); mobile cranes totaled 2,060 units (14.6%), with 1,608 units sold domestically (0.56%) and 452 units exported (128%); tower cranes totaled 324 units (7.64%), with 202 units sold domestically (6.88%) and 122 units exported (8.93%). Road machinery continues to receive demand for infrastructure updates, with the market remaining robust. Road rollers totaled 1,590 units (13%), pavers totaled 124 units (44.2%), and graders totaled 754 units (8.02%). High-end machinery and industrial vehicles are performing better in exports than in domestic sales. A total of 14,466 aerial work platforms were sold (29.3%), and 141,743 forklifts were sold (51.4%), with a rental rate index of 587 for aerial work platforms in January (down 6.7% month-on-month, up 31.9% year-on-year). Macro Dynamics In February, China's manufacturing PMI fell seasonally to 49.0%, with production at 49.6% and new orders at 48.6%. The Spring Festival mismatch caused a short-term contraction in supply and demand, but large enterprises and high-tech manufacturing are still expanding; non-manufacturing was 49.5%, with construction at 48.2%, reflecting the seasonal off-peak period. In terms of infrastructure, there is a clearer focus on front-loaded funding, with total new special bonds issued in January-February amounting to approximately 824.2 billion yuan, a 38.1% increase year-on-year, with around 456.5 billion yuan issued in February alone, laying the foundation for project funding in the first quarter. However, the start and transportation of cement and asphalt in February are still weak, with physical workload remaining low, and there is hope for a recovery in March-April with the disbursement of special bond funds and a concentrated resumption of projects. In the real estate sector, sales and investment are still bottoming out, with the "mini-spring" largely depending on the implementation of policies and confidence rebuilding. The sales of the top 100 real estate companies in January-February 2026 were down about 30% year-on-year (36.8% in February alone), with a 28% year-on-year decrease in transaction volume in 30 cities in February. It is suggested to focus on leading main engine manufacturers and core components. Key targets (1) Main engine manufacturers: ZOOMLION, Sany Heavy Industry, XCMG Construction Machinery, Guangxi Liugong Machinery; (2) Core components: Jiangsu Hengli Hydraulic, Yantai Eddie Precision Machinery, Jiangxi First Hydraulic; (3) Aerial/warehouse/forklift, etc.: Zhejiang Dingli Machinery, Anhui Heli Co., Ltd., Hangcha Group, Zhejiang E-P Equipment. Risk Warning: Risks of macroeconomic fluctuations, demand and policy pace, overseas trade barriers and geopolitical risks, fluctuations in raw material prices, industry competition and price wars, and exchange rate fluctuations.