Excavator sales for June have once again surpassed forecasts, with both domestic and export figures showing strong growth, indicating a moderation in the industry's price competition.
According to data from the China Construction Machinery Association, sales of various excavators in June reached 25,445 units, a year-on-year increase of 35.3%. Domestic sales accounted for 10,898 units, up 33.9%, while exports were 14,547 units, rising 36.4%.
Furthermore, starting May 1st, major companies including Sany, XCMG, Liugong, and Shantui announced price increases of approximately 5% for excavators. Sany and XCMG also raised prices for their crane products.
Analysis from CITIC Securities points out that June's excavator sales continued to outperform expectations. Domestic sales this year have shown a notable shift of the peak season to later periods, partly due to the later Chinese New Year holiday. Since March, domestic excavator sales have recovered to high year-on-year growth, a trend expected to continue.
Exports have maintained robust performance, seemingly unaffected by international geopolitical tensions, tariff changes, or interest rate adjustments, sustaining China's strong momentum in the construction machinery sector.
The price hikes initiated by leading domestic manufacturers signal a slowdown in the industry-wide price war that began earlier this year, pointing towards a healthier competitive environment.
Market Outlook
In overnight U.S. trading, major indices closed lower. The Dow Jones Industrial Average fell 307.16 points, or 0.59%, to close at 51,839.26. The S&P 500 index declined 14.41 points, or 0.19%, to 7,443.28. The Nasdaq Composite dipped 12.17 points, or 0.05%, to 25,508.07.
Large-cap tech stocks were mixed. Microsoft and Intel gained over 2%, while Apple fell more than 2%. Tesla dropped nearly 3%, SpaceX declined over 3%, and Oracle was down almost 4%.
Most optical communication and memory stocks advanced, with Lumentum and Credo rising over 4%. SK Hynix fell nearly 2%.
Popular U.S.-listed Chinese stocks mostly rose, with the Nasdaq Golden Dragon China Index up 0.9%. Alibaba surged over 4%, while Tencent Holdings ADR, iQIYI, JD.com, and Weibo each gained more than 3%.
The Hang Seng Index ADR indicated a lower open, calculated at 25,101.94 points, down 41.11 points or 0.16% from the Hong Kong close.
NYMEX WTI crude oil for the front-month contract rose $0.64, or 0.78%, to settle at $82.42 per barrel. COMEX gold for the front-month contract fell $7.00, or 0.17%, to $4,011.8 per ounce.
Key Developments to Watch
Four major insurance asset management institutions, each managing trillions in assets, have concurrently expressed strong support for the stock market.
China Pacific Insurance announced it will continue investing in stocks and ETFs within sectors like technology growth, consumer goods, and new energy, supporting the cultivation of new productive forces and acting as patient, long-term capital.
Ping An Insurance stated it is persistently increasing investments in strategic emerging industries, advanced manufacturing, new infrastructure, and value-oriented stocks.
New China Life Insurance is continuously optimizing its equity asset allocation structure and firmly supports the development of the capital market.
China Life Insurance Group expressed firm confidence in China's economic prospects and the long-term positive trend of the capital market. Recently, its primary investment platform, China Life Asset Management, has been actively allocating in the market, with net purchases of A-shares and on/off-exchange fund equity assets exceeding 10 billion yuan in a single day.
Lung Fung Group (SEHK: 02290) reported retail sales through its stores for the first quarter amounted to approximately HK$829 million, representing a year-on-year increase of about 21.2%.
Harbin Electric (SEHK: 01133) issued a positive profit alert, expecting its attributable net profit for the first half of 2026 to reach approximately 1.7 billion yuan, a significant increase from about 1.05 billion yuan in the same period last year. The growth is primarily attributed to steady revenue growth and improved operational efficiency leading to a higher gross profit margin.
YIP'S CHEMICAL (SEHK: 00408) announced a positive profit forecast, expecting its interim net profit to increase by not less than 110% year-on-year. The substantial growth is mainly due to: 1) a significant profit increase from its solvents joint venture business, driven by soaring product prices and successful market positioning; 2) progress in expanding market share for its inks business, with both sales volume and tonnage rising, leading to improved segment profit; 3) consolidation of the financial results of Beijing Xinnuo Haibo Petrochemical Technology Development Co., Ltd., a leading chemical gas recovery and treatment company in China, following the acquisition of approximately 60% of its equity in December 2025. This profit growth was partially offset by 4) a one-time gain from the sale of idle land in Shanghai's Jinshan recorded in the first half of 2025.
China Longgong (SEHK: 03339) issued a positive profit alert, expecting its first-half net profit to increase by 16% to 27% year-on-year. The increase is mainly due to vigorous development and improvement of its product series, continuous expansion in domestic and overseas markets leading to steady growth in production and sales, and effective cost control measures improving the overall product gross profit margin.
Lee & Man Paper Manufacturing (SEHK: 02314) announced a positive profit forecast, expecting interim profit to be between approximately HK$1.33 billion and HK$1.39 billion, representing a year-on-year increase of 64% to 71%. This profit growth is mainly due to an increase in the group's profit margin.
SH ELECTRIC (SEHK: 02727) issued a positive profit alert, expecting its interim attributable net profit to be between 920 million yuan and 1.0 billion yuan, an increase of approximately 12% to 22% year-on-year. The profit growth for the first half of 2026 is primarily attributed to operational improvements in some core business segments, as well as non-recurring gains from government subsidies and the disposal of equity in certain subsidiaries, which collectively provided positive support for profitability.
SMART-CORE (SEHK: 02166) issued a positive profit alert, expecting its profit attributable to shareholders for the first half to increase by not less than 460%. The growth is mainly due to an overall increase in demand for the group's integrated circuit chips. Benefiting from the booming development of AI technology and growing market demand, the group's business units related to AI infrastructure, namely optical communication and storage products, achieved significant growth during the period.
Stock Spotlight
DAJIN (SEHK: 01081) announced that its subsidiary, Tangshan Dajin Offshore Engineering Co., Ltd., recently secured an order for 3+1 bulk carriers from a Greek shipowner, with a total contract value of approximately 2.1 billion yuan. The order comprises 3 firm vessels and 1 optional vessel, where the shipowner has the right to decide within two months after signing the contract whether to build the vessel at the agreed price. The total contract value for the 4 vessels is approximately 2.1 billion yuan, with the 3 firm vessels valued at about 1.575 billion yuan and the optional vessel at about 525 million yuan.
In response to investor inquiries on an interactive platform, Dajin stated that as of the end of 2025, its cumulative overseas order backlog exceeded 10 billion yuan, with deliveries scheduled mainly over the next two years. These projects cover multiple offshore wind farm clusters, including those in the North Sea and the Baltic Sea in Europe.
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