Huachuang Securities: The strong performance of excavator domestic sales in March, optimistic about the benefit of policy-driven construction machinery.

Huachuang Securities released a research report stating that in terms of domestic sales, the excavator market began to improve continuously in March 2024. In terms of tonnage structure, small excavators led the rebound, large excavators achieved year-on-year positive growth in the second half of 2024, and medium excavators turned positive in the fourth quarter of 2024. The rigid demand for equipment updates and interventions of policies and regulations are expected to continue to drive the recovery of the domestic excavator market, and the industry is expected to stabilize and improve. In terms of exports, excavator exports turned positive year-on-year in August 2024 and continued until the end of the year; loader exports saw a year-to-date cumulative increase of 13.8% in 2024, indicating that China's construction machinery is maintaining a competitive edge in the international market. With major manufacturers gradually improving their overseas layout, the advantages of Chinese brands in products and services are gradually being highlighted, and it is expected that the export market will continue to show good growth in the future. Huachuang Securities' main points include: - Domestic sales of excavators in March continued to outperform expectations, investment in improving domestic demand continues to drive the industry, accelerating its upward trend. According to the China Construction Machinery Industry Association, excavator sales in March 2025 reached 29,590 units, an increase of 18.5% year-on-year, with 19,517 units sold domestically, a 28.5% increase year-on-year; and 10,073 units exported, a 2.87% increase year-on-year. The total sales of excavators in the first quarter were 61,372 units, a 22.8% increase year-on-year, with 36,562 units sold domestically, a 38.3% increase year-on-year, and 24,810 units exported, a 5.49% increase year-on-year. The China Construction Machinery Market Index (CMI) in March was 128.56, up 18.28% year-on-year, indicating a continued improvement in market sentiment. With multiple factors such as market demand, availability of funds, inventory, and climate, the industry is showing a stable upward trend. - Loader domestic sales in March increased by 23.2% year-on-year, and the penetration rate of electrification continued to rise. In March 2025, sales of various types of loaders reached 13,917 units, a 12.9% increase year-on-year. The domestic market sold 8,168 units, a 23.2% increase year-on-year, and exports sold 5,749 units, a 0.95% increase year-on-year. The total sales of loaders in the first quarter were 30,567 units, a 14.8% increase year-on-year, with 16,379 units sold domestically, a 24.7% increase year-on-year, and 14,188 units exported, a 5.21% increase year-on-year. With factors such as the ease of mobility, increasingly strict environmental requirements in downstream scenarios, and the benefits of lower prices of lithium battery raw materials, the penetration rate of electrification of loaders is quickly increasing. In March 2025, sales of electric loaders reached 2,802 units, with an electrification rate of 20.1%, maintaining a rapid upward trend compared to the overall rate of 10.4% in 2024. China is leading the industry in electrification of construction machinery, and the trends of electrification and lithium-ionization are conducive to accelerating product penetration overseas, with Chinese major manufacturers expected to continue to increase their influence overseas and catch up with European, American, and Japanese major manufacturers. - The export value of construction machinery in January-February 2025 increased by 7.4% year-on-year, with diversified development in export regions. In the first two months of 2025, China's construction machinery export trade amounted to 8.011 billion US dollars, a 7.4% increase year-on-year, maintaining a high growth rate. By region, Russia, the United States, and Indonesia ranked the top three in terms of export value, with 630 million, 610 million, and 410 million US dollars respectively, with year-on-year changes of -18.8%, +4.8%, and +20.1%. The United States and Indonesia both continued to improve year-on-year. Among the top 10 countries in terms of export value, countries with higher growth rates were mainly distributed in the Middle East and Southeast Asia, with Saudi Arabia, the United Arab Emirates, and Malaysia experiencing increases of 30.2%, 45.3%, and 32.1% respectively. Additionally, countries such as Guinea and Kazakhstan showed impressive growth rates of 173.9% and 57.5%, demonstrating strong performance. Risk warning: Slowdown in domestic economic recovery; intensified market competition; fluctuation in raw material prices.