Xiaomo: China's factory automation growth cycle is still complete, and high-value automation and robotics companies have more advantages

The Zhitong Finance App learned that J.P. Morgan Chase released a research report saying that China's factory automation (FA) growth cycle is still complete, but the recovery is becoming more selective, and growth and quality are increasingly concentrated in high-value, innovation-driven automation and robotics segments.

According to the latest MIR data, FA sales rose 8% year on year in the second quarter of 2026, the industrial automation (IA) market remained roughly flat, only up 0.2% year on year, while process automation (PA) fell 4% year on year. At the product level, AC servo motors increased 25% year-on-year, small PLCs (programmable logic controllers) increased 15%, medium and large PLCs increased 14%, and industrial robots increased 17%.

The bank suggests refocusing on backward companies and supply chain beneficiaries for the rest of the year, especially Sanhua Intelligent Control (02050) and Hengli Hydraulic (601100.SH) related to the Tesla robot ecosystem, as well as Top Choice (09880) and Huichuan Technology (300124.SZ) in the FA field. The bank is still optimistic about high-quality leading companies with clear innovation and execution advantages.