According to Orient Securities, excavator sales growth rebounded in November, with domestic sales improvement reflecting structural economic recovery and export growth signaling enhanced industry competitiveness. The firm believes market expectations for sectoral structural improvements will rise, leading to lower risk assessments and creating favorable investment opportunities in mid-cap blue-chip companies. Relevant stocks mentioned include Hengli Hydraulics (601100.SH, not rated), Liugong (000528.SZ, not rated), Zoomlion (000157.SZ, buy), and XCMG Machinery (000425.SZ, not rated). Key observations from Orient Securities are as follows:
**Excavator Sales Growth Rebounds in November** Data from the Construction Machinery Association shows that from January to November 2025, total excavator sales reached 212,200 units, up 16.7% year-on-year. Domestic sales rose 18.6% to 108,200 units, while exports grew 14.9% to 104,000 units, demonstrating strong growth resilience. In November alone, excavator sales increased 13.9% year-on-year to 20,027 units, with domestic sales up 9.11% (9,842 units) and exports surging 18.8% (10,185 units). Both domestic and export growth rates improved compared to October, indicating a modest recovery in industry sentiment and short-term investment opportunities.
**Domestic Sales Reflect Structural Economic Improvement, Exports Highlight Competitiveness in Emerging Markets** Domestically, the excavator market structure is improving, with small excavators maintaining high demand (reflecting automation needs) and large excavators gaining share (driven by infrastructure and mining projects). Medium excavators remain subdued, reflecting ongoing challenges in real estate construction. On the export front, emerging markets continue to drive demand due to urbanization, with Chinese manufacturers strengthening competitiveness and market share through overseas expansion. Overall, November’s growth rebound signals structural economic recovery.
**Structural Improvement Expectations Rise, Focus on Mid-Cap Blue-Chips** Orient Securities notes that the rebound in construction machinery sales, led by excavators, reflects structural economic improvements. This is expected to lower risk assessments in DDM model denominators, benefiting mid-cap blue-chip investments. While large companies will continue to benefit from overseas growth, mid-cap blue-chips offer greater upside potential, particularly in the construction machinery sector.
**Risk Factors** Potential risks include macroeconomic volatility impacting investment, high overseas interest rates dampening demand, escalating trade friction, and rising raw material costs affecting profitability.
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