China Securities Co., Ltd.: The steady promotion of the storage IPO is favorable for semiconductor equipment, and the shipbuilding industry continues to experience an upward trend in prosperity.

China Securities Co., Ltd. released a research report stating that: 1) Humanoid Siasun Robot & Automation: Yushu successfully listed on the Sci-Tech Innovation Board, and the World Siasun Robot & Automation Conference (WRC) was held smoothly, continuously catalyzing the sector. It is recommended to focus on high-quality segments. (2) AIDC power generation equipment: Global gas turbine orders reached a historical high in Q2, and there is strong optimism for domestic gas turbines going overseas. (3) Engineering machinery: In July, both domestic and export sales of excavators continued to resonate upwards, and the sector is expected to see quarterly improvements. (4) Semiconductor equipment: Continued momentum from memory IPOs is promising, and the second half of the year is expected to see semiconductor equipment reach new highs. (5) Lithium battery equipment: Production scheduling has reached new highs, a price increase wave has started, and the lithium battery market maintains strong momentum. The main points of China Securities Co., Ltd. are as follows: Humanoid Siasun Robot & Automation: Yushu successfully listed on the Sci-Tech Innovation Board, and the World Siasun Robot & Automation Conference (WRC) was held smoothly, continuously catalyzing the sector. The pricing of Yushu's IPO was set at 150.80 yuan per share, corresponding to an issue market value of about 61 billion yuan, exceeding previous expectations and likely to drive a reassessment of the valuations of primary manufacturers. Domestic chain manufacturers are actively promoting multi-dimensional capability building such as brain, cerebellum, and body, and are exploring applications in various scenarios including industrial and commercial fields, with a continuous expansion in shipment scale; as the level of Siasun Robot & Automation generalization improves, the scope of application scenarios is expected to further expand. Physical AI represents the next wave of artificial intelligence, and Siasun Robot & Automation is one of the best physical carriers of AI, with clear trends in industrial development. The 2026 World Siasun Robot & Automation Conference will be held from August 19 to 23 at the Beijing Yizhuang Beiren Yichuang International Convention and Exhibition Center; subsequent progress on the release and mass production of Optimus V3, the launch of new products by domestic Siasun Robot & Automation, the advancement of the Siasun Robot & Automation company's IPO, and application implementations will continue to catalyze the sector's market dynamics, with a recommendation to focus on high-quality segments. AIDC power generation equipment: Global gas turbine orders reached a record high in Q2, and there is strong optimism for domestic gas turbines going overseas. In Q2 2026, global gas turbine orders are estimated to be approximately 38 GW, marking a single-quarter historical high, with the U.S. contributing nearly half; at the same time, long-term combined cycle project quotes have significantly risen, and delivery slots before 2030 remain highly scarce. In the first half of the year, PJM related price adjustments associated with transmission constraints rose from 2.1 billion to approximately 6 billion dollars compared to the same period last year, further enhancing the economics of gas turbines. Additionally, Yantai Jereh Oilfield Services Group's semi-annual report revealed that cumulative new orders for gas turbine units and supporting equipment exceeded 3.1 billion dollars starting from November 2025, indicating ongoing high prosperity in the global gas turbine market. China Securities Co., Ltd.'s view: Global gas turbine orders reached a historical high in Q2, with the three giants experiencing synchronous high growth in orders, revenue, profit margins, and capacity guidance, providing strong visibility for future deliveries based on the scale of current orders. There currently exists a high demand for gas turbines alongside tight delivery slots globally, and the supply-demand gap in the industry is expected to persist. Domestic gas turbines, with their shorter delivery cycles, higher cost performance, and continuously enhancing product competitiveness, are likely to accelerate their acquisition of overseas market share. There is strong optimism for domestic gas turbines going overseas. Engineering machinery: In July, both domestic and export sales of excavators continued to resonate upwards, and the sector is expected to see quarterly improvements. In July 2026, a total of 19,521 excavators of various types were sold, representing a year-on-year increase of 13.9%. Among these, domestic sales amounted to 7,608 units (including 41 electric excavators), a year-on-year increase of 4.13%; exports reached 11,913 units (including 62 electric excavators), a year-on-year increase of 21.2%. Overall, both domestic and export sales maintained positive growth, with exports showing over 20% high growth, while the growth rate of domestic sales showed a significant slowdown. Structurally, the growth rate of small excavators decreased, and impacted by the relatively high base for domestic sales in Q3 last year, the overall trend still maintains relatively good prospects, with expectations for continued resonance in domestic and external demand. This year, the domestic excavator sales have shown a noticeable delay in peak season due to the later timing of the Spring Festival compared to last year. Since March, domestic excavators have resumed a relatively high year-on-year positive growth trend, and further growth is expected to continue. Export performance remains strong, unaffected by international situations, tariff changes, or interest rate hike expectations, thus maintaining high growth for China's engineering machinery sector. The domestic landscape is improving, with leading companies beginning to raise prices. Semiconductor equipment: This week, Changchun's prospectus went online, and the global economic cycle continues to be confirmed, emphasizing the progress towards international expansion. SEMI updated its forecast, predicting continuous growth for semiconductor equipment over the next three years. SEMI expects that global semiconductor manufacturing equipment sales will reach a historical high of 165.9 billion dollars in 2026, a year-on-year increase of 23.2%. The growth momentum is expected to continue until 2028, and total equipment sales may reach a record 229.5 billion dollars, achieving five consecutive years of growth. TSMC has raised its capital expenditure forecast for 2026 to 60 to 64 billion dollars, up from a previous estimate of 52 to 56 billion dollars, an increase of 8 billion dollars, roughly 15%. ASML's overall performance significantly exceeded market expectations and the company's previous guidance. The quarterly net sales reached 9.326 billion euros, showing a year-on-year increase of 21% and a quarter-on-quarter increase of 6.4%, far surpassing the company's previous guidance of 8.4 to 9 billion euros and the market's consensus expectation of 8.85 billion euros. This marks the second upward revision of the annual performance target within the year, driven by dual forces of AI computing power and memory recovery, and continuous optimization of profitability structure. The global supply of semiconductor equipment parts is undergoing a historically rare price surge across the entire supply chain. The pricing power in the semiconductor industry chain is structurally shifting from chip end products towards the equipment and parts manufacturing segments. Parts enterprises are generally smaller, with a high proportion of fixed costs, meaning price increases translate directly into profits; at the same time, the expansion cycle for production lines is lengthy, lasting 12 to 18 months, which leads to a poor supply elasticity. Attention is warranted towards the requests for domestic replacements and price increase logic brought about by delays in overseas suppliers for valves, piping, ceramic components, RF power supplies, GAS BOX, and others. Lithium battery equipment: Production scheduling has reached new highs, a price increase wave has started, and the lithium battery market maintains strong momentum. Firstly, in terms of production scheduling and prices, demand remains robust: August's total lithium battery production across the market is approximately 304 GWh, a month-on-month increase of 7.4%. Production for energy storage cells amounts to 125 GWh, with a net increase of about 10 GWh, while the concentration of overseas large-scale storage projects is driving energy storage to become the first growth engine; leading 314Ah energy storage cell prices rose by 2.17%, initiating a price increase trend for cells. Combined with the battery consumption tax set to take effect in September, signals for both volume and price increases in the second half of the year are clear. Secondly, in terms of solid-state industrialization, the engineering turning point has been established: Contemporary Amperex Technology's Yibin all-solid-state trial production line officially commenced in August, with the first batch of sulfide samples achieving an energy density of over 500 Wh/kg and a cycle life of over 1,000 cycles, with plans to verify small batches for installation by 2027; BYD's Chongqing Bishan 20 GWh production line will start construction in the third quarter, and the world's first ton-level high-purity lithium sulfide production line has commenced construction in Anqing, with full completion planned for 2027, addressing upstream shortages; costs for sulfide electrolytes have decreased by over 35%, and solid-state technology is advancing from technical viability to economic viability. Thirdly, in terms of equipment materialization, the incremental value is evident: In the first half of this year, there were over 40 publicly announced investment projects related to solid-state batteries and core materials, with a planned total investment exceeding 50 billion yuan. The peak construction of trial production lines and large-scale production lines is driving demand for new processes such as dry electrodes, isostatic pressing, and stacking, with the single GWh equipment value being approximately 3-5 times that of liquid production lines, making the equipment segment the first to benefit strongly from a high level of certainty. Currently, the sector is experiencing a triple resonance window of high production scheduling, solid-state vehicle verification, and equipment materialization, maintaining a positive outlook on the configuration value of lithium battery equipment and solid-state battery sectors. Risk warnings: (1) The risk of fluctuations in the domestic macro economy: Machinery is a typical midstream capital goods industry which connects upstream and downstream and is closely related to fluctuations in the macro economy. If significant shifts occur in domestic macro policies, it will undoubtedly affect overall demand in the machinery industry. (2) The risk of fluctuations in overseas markets: The journey of Chinese enterprises expanding overseas cannot be smooth sailing; various frictions are certain to arise in the future. Whether these are just temporary incidents or indicative of new trends requires careful judgment. (3) The risk of downstream expansion not meeting expectations: If downstream industries do not expand as expected, corresponding equipment demand will decline, negatively impacting orders and performance within the industry.