Everbright Securities released a research report stating that domestic sales of construction machinery continued to grow in December 2025, with the non-excavator segments showing a significant recovery in景气度, and export sales performing impressively. The report remains optimistic that the ongoing renewal and replacement cycle will continue to drive construction machinery sales, with the industry having positive short-term catalysts. Proactive fiscal policies are expected to stimulate infrastructure investment, ensuring sustained mid-term demand recovery for the industry. Furthermore, as the construction machinery industry advances in internationalization and electrification, leading companies are poised to achieve both volume and profit growth. Additionally, the commencement of the Yaxia Hydropower Project is expected to further boost demand for construction machinery. The main views of Everbright Securities are as follows:
Domestic excavator sales continued to grow in December 2025, with the non-excavator segments showing a significant recovery in景气度. In December 2025, China's excavator sales (including exports) reached 23,095 units, a year-on-year increase of 19.2%; among these, domestic sales were 10,331 units, up 10.9% year-on-year. For the full year of 2025, China's excavator sales (including exports) totaled 235,257 units, growing 17.0% year-on-year; domestic sales accounted for 118,518 units, an increase of 17.9%. Non-excavator construction machinery segments displayed a clear recovery trend: domestic loader sales grew 17.6% year-on-year in December; motor grader domestic sales surged 70.5% year-on-year; truck crane domestic sales increased 39.1% year-on-year; crawler crane domestic sales jumped 95.5% year-on-year; and mobile crane domestic sales rose 36.7% year-on-year.
The continued growth in domestic construction machinery sales in December 2025 confirms the upward trend of the domestic demand cycle recovery. Regarding growth drivers, the report remains optimistic about the sustained growth from the equipment renewal and replacement cycle driving sales. The previous sales cycle for excavators and other machinery saw rapid growth from the trough in 2015, peaking around early 2021. Considering the typical 8-10 year lifespan of construction equipment, it is estimated that China will see a compound annual replacement growth rate of approximately 30% in 2025 and subsequent years, which is expected to strongly support future excavator sales. Furthermore, the large-scale export of used construction machinery to developing countries objectively reduces the domestic equipment保有量, which is also a key factor supporting new machinery sales.
Proactive fiscal policies are expected to stimulate infrastructure investment, ensuring sustained mid-term demand recovery for construction machinery. The Central Economic Work Conference was held in Beijing on December 10-11, 2025. The conference indicated that 2026 will continue to implement more proactive fiscal policies, maintain necessary fiscal deficits, overall debt levels, and expenditure totals, strengthen scientific fiscal management, optimize the structure of fiscal expenditures, and standardize tax incentives and subsidy policies. The conference also pointed out the need to stabilize and reverse the decline in investment, appropriately increase the scale of central government budget内 investment, optimize the implementation of "dual-key" projects, improve the management of special local government bond usage, continue leveraging the role of new政策性 financial instruments, and effectively stimulate private investment vitality. These proactive fiscal policies are expected to boost infrastructure investment in 2026, thereby driving downstream equipment demand.
Excavator exports continued to grow in December 2025, indicating significant potential remains for construction machinery出海. Regarding export volume, excavator exports in December 2025 reached 12,764 units, a year-on-year increase of 26.9%. For the full year 2025, excavator exports totaled 116,739 units, growing 16.1% year-on-year. In terms of export value, China's construction machinery exports in December 2025 amounted to $6.42 billion, up 27.2% year-on-year. Full-year 2025 construction machinery exports reached $60.17 billion, an increase of 13.8%. Future exports face opportunities and challenges, including changes in the Russia-Ukraine situation, rising infrastructure and mining machinery demand in Southeast Asia, Africa, and the Middle East, and increasing penetration into high-end markets in Europe and America, alongside risks such as uncertainty surrounding US-China tariffs. As leading Chinese construction machinery companies intensify their overseas布局, exports are expected to maintain a growth trend.
Sales of electric loaders maintained a strong upward trend in December 2025, suggesting an acceleration in construction machinery electrification. Sales of electric loaders in December 2025 reached 2,722 units, surging 218.7% year-on-year. The electrification rate reached 22.2%, an increase of 13.2 percentage points year-on-year. For the full year 2025, electric loader sales totaled 29,771 units, growing 165.3% year-on-year, with an electrification rate of 23.2%, up 12.9 percentage points. The Central Economic Work Conference indicated that 2026 will focus on deepening energy conservation and carbon reduction transformations in key industries. Everbright Securities believes that greening and electrification are key future directions for the construction machinery industry. Domestic manufacturers are leveraging the electrification trend to gain ground, and the pace of electrification is expected to accelerate, leading to further revenue and profit growth for OEMs.
Forklift export sales continued to grow, with intelligent logistics opening new growth avenues. Total forklift sales across all categories in December 2025 were 111,363 units, a slight increase of 0.03% year-on-year. Domestic sales were 63,807 units, down 5.2% year-on-year, while export sales were 47,556 units, up 8.0% year-on-year. For the full year 2025, total forklift sales reached 1,451,768 units, an increase of 12.9% year-on-year. Domestic sales were 906,812 units, up 12.6%, and exports were 544,956 units, up 13.4%. The rapid development of industries like robotics and AI is driving increased penetration of unmanned forklifts. According to the "Forklift Mobile Robot Industry Development Blue Book (2024 Edition)", China's unmanned forklift sales are projected to reach 39,000 units in 2025, a 39.3% increase, yet the penetration rate remains low at only 3.2%, indicating vast market growth potential.
The commencement of the Yaxia Hydropower Project is expected to drive increased demand for construction machinery. As a massive-scale hydroelectric project, the Yaxia Hydropower Project has a total investment of approximately 1.2 trillion yuan, making it the largest planned hydropower station project globally. The project primarily employs a development method involving "cutting off bends and straightening channels with tunnel diversion". It plans to construct five cascade power stations, with partial operation scheduled for 2030 and full completion by 2035. Based on experience from the Three Gorges and other large hydropower projects, the total investment in construction machinery and equipment typically accounts for 10% to 15% of the project's total investment, implying equipment demand could reach 120 billion to 180 billion yuan. Considering the high-altitude construction environment of the Yaxia project and the preference for new energy and unmanned equipment under environmental requirements, the actual demand for construction machinery may be even higher.届时, large excavators, rock tunnel boring machines, cranes, and concrete machinery are expected to be the main categories in demand, providing sustained impetus to the construction machinery industry.
Investment recommendations include major OEMs such as Sany Heavy Industry (600031.SH), XCMG Machinery (000425.SZ), Zoomlion Heavy Industry Science & Technology (000157.SZ, 01157), Liugong Machinery (000528.SZ), Shantui Construction Machinery (000680.SZ), and China Longyuan Power Group (03339), as well as component suppliers like Hengli Hydraulics (601100.SH). It is also advised to monitor companies likely to benefit from the Yaxia Hydropower Project, such as China Railway Construction Heavy Industry (688425.SH), China Railway Industrial (600528.SH), Sunward Intelligent Equipment (002097.SZ), and Guangdong Hongda Mining (002683.SZ). Electrification and internationalization remain key growth drivers for forklifts. Traditional forklift leaders with core manufacturing and sales capabilities, coupled with deep involvement in the smart logistics sector, are poised to benefit significantly from the expansion of the unmanned forklift market. Recommendations include Anhui Heli Co., Ltd. (600761.SH) and Hangcha Group Co., Ltd. (603298.SH), with suggestions to monitor Zhongli Group Co., Ltd. (603194.SH) and Noblelift Intelligent Equipment Co., Ltd. (603611.SH).
Risk analysis includes potential shortfalls in infrastructure investment, underperformance of construction machinery exports, intensifying industry price competition, and uncertainties related to US-China tariffs.
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