CICC: Overseas demand for construction machinery exceeds expectations, and demand in overseas construction end markets is expected to continue strengthening.

CITIC Securities released a research report stating that global construction machinery manufacturers have announced their Q2 2026 performance. Currently, the overseas revenue ratio for domestic construction machinery manufacturers stands at approximately 60%. The firm believes that overseas construction end-user demand is expected to continue strengthening. Specifically, data centers and rental demand are driving North American demand, while Latin America is primarily driven by public investment. It is recommended to pay attention to Sany Heavy Industry (600031.SH), XCMG Construction Machinery (000425.SZ), Jiangsu Hengli Hydraulic (601100.SH), ZOOMLION (000157.SZ), and Caterpillar, maintaining profit forecasts, ratings, and target prices unchanged. CITIC Securities' main points are as follows: Caterpillar: Revenue exceeds expectations, significant recovery in Americas demand Q2 2026 construction segment revenue reached $8.346 billion, a year-on-year increase of 35%. Total user sales have seen growth for the sixth consecutive quarter, with an increase of 22%, and dealer inventories increased by $400 million. The Q2 2026 construction segment profit was $1.947 billion, a year-on-year rise of 57%. Q2 2026 resource revenue was $4.648 billion, a year-on-year increase of 20%, with segment profit at $693 million, up 23% year-on-year. Due to a high order rate, the company expects user sales to continue to grow throughout the year. By region, significant recovery is evident in both North America and Latin America. Komatsu: Good revenue growth, raises full-year guidance Construction equipment business revenue was 502.6 billion yen, a year-on-year increase of 15.3%, and a 5.3% increase after excluding foreign exchange effects. Performance in Africa, Oceania, the Americas, and Europe was remarkable. Mining business revenue was 462.4 billion yen, up 13.8%, and a 2% increase after excluding foreign exchange effects. The company has raised its sales forecast for seven major products in construction, mining, and utilities from the previously expected -5%-0% in April 2026 to a growth of 0%-5%. Downstream demand outlook Construction demand: The firm believes that overseas construction end-user demand is expected to continue to strengthen, with data center and rental demand driving North American demand, and public investment propelling demand in Latin America. Mining demand: While coal demand remains weak and sales in Indonesia have significantly declined, robust demand for gold and copper mines has led to noticeable growth in Latin America and Africa, with a positive outlook for sustained mining demand. Risks Downstream demand may fall short of expectations; tariff risks.