According to the Zhitong Finance APP, Guotai Junan released a research report stating that many countries and regions are still in the peak period of infrastructure construction, providing opportunities for China's equipment manufacturing industry, which has competitive advantages, to equip globally. They are optimistic about fields and enterprises with globalization capabilities; thirdly, some overcapacity industries are expected to gradually clear in the next 3-5 years, which will benefit the profit recovery of leading quality enterprises.
Guotai Junan's main viewpoints are as follows:
Three major investment lines in the machinery equipment industry: Technology-driven, global equipment, clearing of excess capacity.
The firm believes that the development process of China's machinery manufacturing industry over the past few decades has gone through: labor-driven — investment-driven — resource-driven stages, and has now entered the technology-driven stage. Technology will disrupt the production methods of traditional manufacturing, and efficiency will further improve, making them optimistic about the development prospects of technology-driven industries; at the same time, due to the imbalance in global economic development, many countries and regions are still in the peak period of infrastructure construction, providing opportunities for China's equipment manufacturing industry, which has competitive advantages, to equip globally. They are optimistic about fields and enterprises with globalization capabilities; thirdly, some overcapacity industries are expected to gradually clear in the next 3-5 years, which will benefit the profit recovery of leading quality enterprises.
Technology-driven: Optimistic about the AI robotics industry chain.
2025 will be the first year of industrialization for Tesla's humanoid robots, and domestic car manufacturers and major internet companies are also officially entering the AI robotics track, with domestic robotic dogs expected to be the first to industrialize. They are optimistic about investment opportunities in the Tesla industry chain and domestic industry chains that are expected to win in the long term. Key focus should be on the industry chain segments that are bottlenecks, such as AI robot brains, dexterous hands, and lead screws.
Global equipment: Optimistic about construction machinery.
In 2024, overseas demand for construction machinery is expected to significantly outperform domestic demand, supporting the fundamentals of major manufacturers. The third quarter of 2024 will see further acceleration in exports, combined with a recovery in domestic infrastructure demand and stabilization at the bottom of real estate demand. The firm expects that in 2025, the industry is likely to welcome a resonance of internal and external demand, with fundamentals improving.
The incremental demand brought by the central government’s finances plays a crucial supporting role in domestic demand for the construction machinery industry. From the data on excavators, the prosperity is gradually transmitting from small excavators to large excavators, with broad infrastructure such as mining, water conservancy, and railways starting to gain momentum. Broad fiscal expenditure has become the core driving force for construction machinery demand. From the data perspective, earth-moving machinery, which is most closely related to infrastructure, performs the best. From the perspective of policy, stock prices, and the transmission path of fundamentals, historically, it takes about 3-6 months for this to reflect in the sales of construction machinery. Continuous attention should be paid to leading indicators: interest rates and the implementation of central and local fiscal funding.
Cyclical: Fixed asset investment in manufacturing is at the bottom range, focus on the recovery of core data such as PMI.
The overall production and sales growth rates of general equipment industries such as machine tools, industrial robots, and automation are strongly correlated with macroeconomic indicators like PMI. Currently, PMI has been below the boom-bust line for a long time, with small enterprises' PMI remaining below 50% for nearly a year. In December 2024, PMI was 50.1%, with new orders and production PMI at 51.0%/52.1%, both above the boom-bust line. Since 2024, the cumulative year-on-year growth rate of fixed asset investment in manufacturing has shown signs of recovery
Subsequent attention should be paid to whether there are significant signs of recovery in core manufacturing indicators such as PMI.
Risk Warning: Slow technological progress, overseas policy risks, and sluggish manufacturing investment

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Guotai Junan released a research report indicating that the machinery and equipment industry will benefit from the peak of global infrastructure construction, and China's equipment manufacturing industry, with its competitive advantages, is expected to achieve globalization. The report emphasizes three major investment themes: technology-driven growth, equipment globalization, and the clearing of excess capacity, with particular optimism about the overseas demand for the AI robotics industry chain and construction machinery. It is expected that by 2025, the industry will experience a resonance of domestic and foreign demand, with a positive fundamental outlook

Zhitong

SUNWARD

XCMG

Zoomlion

ZOOMLION

CMCI

GTHT

CAERI

Sinoma-ec/SEC

Suochen

HCNC

EFORT

ADTec

Tongxing

CKI HOLDINGS

Tuoshan

Sany

UBTECH ROBOTICS

Tesla

HIMILE SCIENCE AND TECHNOLOGY

Inovance

SHANTUI

PIA Automation

NHPM

Qinchuan

CHINA COMM CONS

GoogolTech

Huawu Co.,Ltd.

Skychem Technology

ESSENCE FASTENING SYSTEMS (SHANGHAI)

Dawn Precision

JINGLV ENVIRONMENT

Jikai

Guotai Junan: The machinery and equipment industry is expected to welcome a resonance of domestic and external demand