Wanlian Securities: Strong Momentum for Construction Machinery Going Global, Industry Prosperity Continuing Upward

Wanlian Securities released a research report stating that in July, the engineering machinery industry's internal and external sales continued to show a growth pattern, with both excavator and loader sales achieving double-digit increases. As domestic counter-cyclical adjustment policies continue to take effect and major infrastructure projects accelerate their implementation, combined with the natural turnover of the previous round of equipment renewal cycles, the domestic demand market is witnessing recovery. On the export front, China's main engine manufacturers have been expanding overseas for many years, and domestic engineering machinery products possess cost-performance advantages, leading to a continuous enhancement of domestic manufacturers' competitiveness in overseas markets. Focusing on the engineering machinery industry's key theme of "internal and external resonance, with both volume and price rising," it is recommended to pay attention to high-quality companies that have market advantages and are actively expanding into overseas markets. Event: The China Construction Machinery Industry Association announced the latest statistics, showing that in July, sales of various types of excavators reached 19,521 units, representing a year-on-year increase of 13.9%; sales of various types of loaders reached 11,774 units, representing a year-on-year increase of 30.8%. Key points from Wanlian Securities are as follows: In July, excavator sales in China grew by 13.9% year-on-year, with strong momentum in overseas growth. According to statistics from the China Construction Machinery Industry Association regarding major excavator manufacturers, in July 2026, sales of various types of excavators totaled 19,521 units (year-on-year +13.9%). Among these, domestic sales were 7,608 units (year-on-year +4.13%), and exports totaled 11,913 units (year-on-year +21.2%). From January to July 2026, a total of 171,841 excavators were sold (year-on-year +24.8%). Of these, domestic sales were 86,633 units (year-on-year +18.8%), while exports were 85,208 units (year-on-year +31.7%). In July, the export momentum for excavator sales was stronger than that of domestic sales, with the monthly export share rising to approximately 61.0%, serving as the main driver of growth in the industry. In terms of electrification, 103 electric excavators were sold in July, of which 41 were sold domestically and 62 were exported, resulting in an overall penetration rate of 0.53%, which is significantly lower than the over 60% electrification rate of loaders. The industry is still in its early stages of industrialization, making it challenging to become a performance driver in the short term but representing an option for mid- to long-term structural upgrades. In July, loader sales grew by 30.8% year-on-year, with strong resonance in both internal and external sales. According to statistics from the China Construction Machinery Industry Association regarding major loader manufacturers, in July 2026, sales of various types of loaders reached 11,774 units (year-on-year +30.8%). Among these, domestic sales were 5,770 units (year-on-year +26.8%), and exports totaled 6,004 units (year-on-year +34.9%). From January to July 2026, a total of 93,826 loaders were sold (year-on-year +27.2%). Of these, domestic sales were 47,166 units (year-on-year +17.4%), while exports were 46,660 units (year-on-year +38.9%), indicating that the overseas market continues to be an important growth driver. Regarding electrification, 4,078 electric loaders were sold in July, with 3,622 sold domestically and 456 exported. Structurally, loader internal and external sales are nearly balanced, with monthly export volumes surpassing domestic sales; the export volume accounts for approximately 51.0%, and overseas markets continue to be a core growth engine. Marginally, the total growth rate in July and the domestic growth rate both accelerated compared to the cumulative level from January to July, confirming that the recovery of domestic demand is gaining momentum. Moreover, the penetration rate of domestic electric loaders reached 62.77%, making electrification a key driver for domestic renewal demand and product structure upgrades, but exports of electric loaders accounted for only 7.6%, indicating that electrification benefits are still concentrated in the domestic market. Loaders, being highly sensitive indicators of construction activity, confirm a moderate recovery in the engineering machinery industry through their increased output. In July, both loader and excavator sales achieved double-digit year-on-year growth, but the quality and structure of this growth differ. In July, the export growth rates for excavators and loaders reached 21.2% and 34.9%, respectively, with monthly export volumes surpassing domestic sales; exports serve as a stabilizing force for both products. Domestic demand shows some divergence, with marginal strengthening in loader domestic demand, primarily driven by mining, infrastructure, and port activity, while excavator internal sales momentum has weakened. Overall, in the context of counter-cyclical policies taking effect, equipment renewal policies promoting growth, and the deepening global channel layouts of Chinese companies, the engineering machinery industry is expected to continue along a prosperous path of domestic sales recovery, high export growth, and accelerating electrification in 2026. Risk factors include: risks of downstream real estate and infrastructure investment falling short of expectations, risks of policies not being implemented as expected, intensified industry competition risks, risks of international trade friction, and risks of fluctuations in the RMB exchange rate.