China Securities Co., Ltd. released a research report stating that robots shone brightly at the CES exhibition, with the industry expected to deeply benefit from AI development. As Tesla's Gen3 gradually enters a new product launch phase, domestic manufacturers are accelerating their new product releases and capital operations. The firm recommends focusing on high-quality segments at the bottom, seizing certainty and core changes. In construction machinery, excavators experienced a year-end rally in December, and the firm continues to be optimistic about a strong start in Q1 2026. The major memory cycle has begun, and orders for semiconductor equipment companies are expected to maintain high growth rates. Mid-term acceptance for solid-state batteries is proceeding as scheduled, with technical solutions further converging. As OEMs are about to commence bidding, the firm is optimistic about the spring season rally for lithium battery equipment. The main views of China Securities Co., Ltd. are as follows: Humanoid robots were a standout at CES, and the industry is poised to benefit profoundly from AI advancements. Both domestic and international robots impressed at CES, demonstrating excellent motion performance, AI intelligence, and real-world application scenarios. AI is progressively expanding from software to comprehensively permeate the physical world. As a crucial carrier for AI application, robotics will deeply benefit from the development of the AI industry. Furthermore, Musk's recent interview comments on Optimus once again demonstrated confidence, noting that V3 possesses human-level hand dexterity, an AI brain, and mass production capabilities. Subsequent product releases and mass production progress deserve close attention. Upcoming catalysts such as Gen3 project awards, new product launches, and the IPO progress of domestic robotics manufacturers warrant significant focus. At the current bottom, it is advisable to concentrate on premium segments and grasp core changes like certainty and dexterous hands. In December, excavator sales, both domestic and export, achieved double-digit growth, showing an unexpected year-end rally. The firm remains optimistic about a strong start in Q1 2026. Excavator sales in December 2025 reached 23,095 units, a year-on-year increase of 19.2%. Domestic sales accounted for 10,331 units, up 10.9% year-on-year, while exports reached 12,764 units, surging 26.9% year-on-year. Total excavator sales for 2025 were 235,257 units, an increase of 17% year-on-year. Domestic sales totaled 118,518 units, up 17.9%, and exports were 116,739 units, rising 16.1% year-on-year. Non-excavator machinery has performed exceptionally well since Q3. In November, domestic sales of truck cranes and crawler cranes increased by 26% and 102% year-on-year respectively, while exports grew by 8% and 53% year-on-year, with crawler cranes performing particularly strongly. The firm anticipates the domestic market could achieve over 10% growth in 2026, with exports potentially growing more than 15%, indicating sustained positive resonance from both domestic and international demand. The IPO application of ChangXin Technology has been accepted, marking the start of a major memory cycle. Equipment companies are expected to maintain high order growth rates. Regarding downstream capacity expansion, capital expenditure by fab plants is projected to continue rising in 2026, with memory showing the strongest certainty. Advanced logic is expected to maintain robust performance, while mature logic may face slight pressure. In terms of localization rates, downstream players are generally accelerating the verification and adoption of domestic equipment. The localization process for components, especially module-based parts, is expected to speed up, indicating an overall positive fundamental trend for the sector. The push for mass production of solid-state batteries is intensifying, and national standards are gradually being refined. The firm is optimistic about the sector's spring season rally. At CES 2026, Finnish startup DonutLab announced plans to launch the world's first all-solid-state battery, attracting significant attention. Successful delivery would mark a major milestone for the global solid-state battery industry, signifying the technology's transition from the laboratory to mass-produced vehicles. Additionally, the national standard for solid-state batteries, "Solid-State Batteries for Electric Vehicles - Part 1: Terminology and Classification," has entered the public consultation stage. The draft standard aims to regulate industry-specific terminology, which will greatly reduce the confusion caused by inconsistent nomenclature. As mid-term acceptance proceeds on schedule, pilot line samples from various companies undergo rigorous testing. Technical solutions are expected to further converge, enhancing certainty. Leading battery manufacturers and OEMs are anticipated to initiate a new round of order bidding, highlighting the allocation value of the solid-state battery sector during the spring rally. AI PCBs are expected to continuously drive demand for updates and upgrades in PCB equipment. The PCB industry is characterized by a return to an upward cycle, product premiumization, and factory establishment in Southeast Asia. Increasing output and evolving processes are likely to persistently fuel demand for updating and upgrading PCB equipment. Within PCB equipment, the value share of drilling, laser drilling, inner layer imaging, outer layer imaging, plating, and inspection equipment is approximately 15%, 5%, 6%, 19%, 19%, and 5% respectively. These are segments with both high value content and high barriers, directly determining the interconnection density, signal integrity, and production yield of circuit boards. AI is driving the industry towards higher layer counts, finer wiring, and greater reliability, demanding more advanced processing techniques and bringing significant changes across all segments. It is recommended to focus on companies like Dingtai Tech in the drilling segment and Victory Precision in the plating segment. Domestic and export sales of large forklifts maintained growth in November, supporting a positive outlook for the expansion of smart logistics-related businesses. Large forklift domestic sales grew +5% in July, with exports up +8% year-on-year; August saw domestic sales +11% and exports +17%; September recorded domestic sales +16% and exports +23%; October figures were domestic sales +8% and exports +13%; November showed domestic sales +4% and exports +11%. The firm is optimistic about the simultaneous upward trend in both domestic and international demand for forklifts. Leading companies are actively deploying in smart logistics and unmanned forklifts, having launched embodied intelligence-related products for the logistics sector in Q4 this year. The trend towards "unmanned" operations is expected to see rapid volume expansion. Key recommendations in the machinery sector include Hengli Hydraulic, Orbbec, Liugong, XCMG, Jereh, NaiPu Mining Machine, Sany Heavy Industry, Zoomlion, Anhui Heli, Hangcha Group, CTI, Sincere, Lead Intelligent, Bozhon Precision, Haitian International, Yizumi, Rigol, ZJN, and Maxcer. Risk analysis includes risks associated with fluctuations in the domestic macroeconomy, volatility in overseas markets, and risks that downstream capacity expansion may fall short of expectations.
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