CICC Machinery Industry's 25-Year Strategy: Focus on the Dual Main Lines of Cyclic Recovery and Technological Growth

The Zhitong Finance App learned that CICC released a research report saying that looking ahead to 2025, domestic demand is expected to be boosted by both fiscal and monetary policies, leading to improvements in machinery and equipment investment; while overseas Federal Reserve interest rate cuts and fiscal stimulus increase tariff risks, the export chain may diverge. Meanwhile, technological powerhouses and domestic substitution are still the only way to go. Therefore, I am optimistic about the two main lines: 1) boosting domestic demand brings opportunities for cyclical recovery under strong policies; 2) technological progress and domestic substitution bring investment opportunities in growth stocks. At the same time, the trend of outstanding Chinese companies going overseas remains unchanged, and companies with resilient overseas demand and strong competitiveness are expected to continue to increase their global share.

Real estate transportation equipment: Fiscal strength is expected to drive the upward trend in construction machinery, and the transportation equipment boom will continue

Construction machinery: Driven by finance and replacement demand, domestic demand for construction machinery is expected to increase; the internationalization process of domestic manufacturers will continue, and there is more room in the future; ships: as the peak of replacement of old ships approaches, industry demand is expected to remain high in 2025; in this round, the competitiveness of Chinese shipbuilders has been verified, and share growth and profitability are expected to be gradually realized; rail transit: orders in 2025 may fall from a high base, and considering the increase in maintenance delivery and performance The terminal is expected to continue to grow.

General equipment and services: focus on domestic pro-cyclical inflection points

General equipment: Since 3Q21, the domestic market sentiment has declined, and it is still at the bottom of the cycle. With the expansion of domestic policies, the industry is expected to reach an inflection point, focusing on demand recovery in machine tools, tools, robots, instruments, gearboxes, forklifts, etc.; third-party testing: After more than 2 years of industry decline, the competitiveness of high-quality enterprises has been further highlighted; with the recovery of domestic demand, industry demand is expected to bottom up.

Technological progress and strengthening the chain: optimistic about the growth opportunities brought about by scientific and technological progress

Embodied intelligence: Tesla humanoid robots are expected to be mass-produced in 2025; Huawei enters the market to further accelerate industrialization, and it is recommended to focus on domestic chain landing opportunities; industrial mother machines: focus on the promotion of localization of CNC systems, functional components, and advanced equipment; new energy equipment: focus on large-scale mass production of composite copper foil and iteration opportunities for BC photovoltaic cells; scientific instruments: implementation of equipment renewal policies and increased investment in technological research and development The demand side is expected to continue to improve; new products from domestic manufacturers will enter the harvest period.

Export chain: multiple factors resonate, performance or divergence

Hardware tools: Real estate restoration after US interest rate cuts, demand for durable consumer goods is expected to pick up; oil service equipment: equipment replacement and potential favorable policies are expected to drive up demand in North America, and China's electric drive fracturing equipment has a leading global advantage; two-wheelers: optimistic that the overseas share of high-displacement motorcycles will continue to rise.

Recommended targets

It is recommended to pay attention to Xugong Machinery (000425.SZ), Superstar Technology (002444.SZ), Yingliu (603308.SH), Dyl Laser (300776.SZ), Neway (603699.SH), Huarui Testing (300012.SZ), Rongzhi Rixin (688768.SH), Huarui Precision (), Jerry (002353.SZ), Dongwei Technology (Dubai), Hangzhou Oxygen (002430.SZ). 688059.SH 688700.SH

risk factors

Tariffs have risen; the boost in domestic demand has fallen short of expectations; and the promotion of new technologies and products has fallen short of expectations.