Group 1: Financial Performance - In H1 2025, the company achieved revenue of 18.181 billion yuan, a year-on-year increase of 13.21%, and a net profit attributable to shareholders of 1.230 billion yuan, up 25.05% year-on-year [1] - In Q2 2025, the company reported revenue of 9.032 billion yuan, a year-on-year growth of 11.22%, while net profit was 573 million yuan, increasing by 17.94% year-on-year [1] - The gross margin for H1 2025 was 22.32%, a decrease of 1.08 percentage points year-on-year, while the net margin was 6.34%, an increase of 0.01 percentage points year-on-year [1] Group 2: Market Position and Segment Performance - The company's market share in earthmoving machinery increased, with revenue of 11.652 billion yuan in H1 2025, a year-on-year growth of 17.26%, accounting for 64.09% of total revenue [2] - The loader business saw domestic and international revenue growth exceeding 20%, while global sales of electric loaders surged by 193% [2] - The excavator business experienced a revenue increase of 25.10% and a net profit growth of over 90%, with domestic and international sales rising by 31% and 22.10% respectively [2] Group 3: International Expansion and Strategic Initiatives - The company accelerated its globalization efforts, with overseas revenue reaching 8.523 billion yuan in H1 2025, a year-on-year increase of 10.52%, representing 46.88% of total revenue [3] - Emerging markets showed strong growth, with revenue in regions like South Asia, Middle East, and Africa seeing increases exceeding 80% [3] - The company approved an investment of 500 million yuan to establish a manufacturing plant in Indonesia, enhancing its local market presence and optimizing the global supply chain [3]

Investment Rating - The report maintains a "Buy" rating for the company [1][7]. Core Insights - The company achieved a significant growth in net profit for H1 2025, with revenue reaching 181.81 billion yuan, a year-on-year increase of 13.21%, and net profit of 12.30 billion yuan, up 25.05% [5]. - The company's market share in earthmoving machinery continues to rise, with revenue from this segment at 116.52 billion yuan, a 17.26% increase year-on-year, accounting for 64.09% of total revenue [5]. - The company is accelerating its globalization efforts, with overseas revenue of 85.23 billion yuan, a 10.52% increase year-on-year, representing 46.88% of total revenue [5]. Summary by Sections Financial Performance - In H1 2025, the company reported a gross margin of 22.32%, a decrease of 1.08 percentage points year-on-year, while the net margin was 6.34%, an increase of 0.01 percentage points [5]. - For Q2 2025, revenue was 90.32 billion yuan, an 11.22% year-on-year increase, with a net profit of 5.73 billion yuan, up 17.94% year-on-year [5]. Market Position - The company’s electric loader sales increased by 193% year-on-year, with over 50% of the industry’s electric loader exports coming from the company [5]. - The excavator segment saw a revenue increase of 25.10% year-on-year, with domestic and international sales growing by 31% and 22.10%, respectively [5]. International Expansion - The company is investing 500 million yuan in a manufacturing facility in Indonesia to enhance its local market presence and optimize its global supply chain [5]. - Emerging markets such as South Asia, the Middle East, and Africa showed strong growth, with some regions exceeding 80% revenue growth [5]. Earnings Forecast - The company’s earnings per share (EPS) are projected to be 0.93 yuan, 1.17 yuan, and 1.46 yuan for 2025, 2026, and 2027, respectively, with corresponding price-to-earnings (PE) ratios of 12x, 9x, and 7x [6][7].

Core Viewpoint - Pacific Securities report indicates that LiuGong achieved a net profit attributable to shareholders of 1.23 billion yuan in the first half of the year, representing a year-on-year growth of 25.05%, aligning with the previous performance forecast range of 20%-30% [1] Group 1: Financial Performance - In the first half of the year, LiuGong's revenue showed steady growth, with earth-moving machinery products outperforming the industry [1] - The company's overseas business accounted for 46.88% of total revenue in the first half of 2025, becoming a "ballast" for the company's performance growth [1] Group 2: Market Expansion - The growth momentum in overseas emerging markets is strong, with revenue growth rates in key regions such as South Asia, Central Asia, Indonesia, and Africa exceeding 80% [1] Group 3: Strategic Goals - According to the company's board resolution, LiuGong aims to achieve a revenue target of 60 billion yuan by 2030, with international revenue accounting for over 60% and a net profit margin of no less than 8% [1] - The six-month target price is set at 15.82 yuan, corresponding to a 17 times PE for 2025, with a "buy" rating given [1]

Investment Rating - The report maintains a "Buy" rating for the company [5][7]. Core Insights - The company achieved a revenue of 18.18 billion with a year-on-year growth of 13.2% and a net profit of 1.23 billion, reflecting a 25.1% increase [1]. - The company aims to reach a revenue target of 60 billion by 2030, with international revenue accounting for over 60% and a net profit margin of no less than 8% [1]. - The demand for earthmoving machinery is supported by the ongoing equipment upgrades and the commencement of the Yaxia hydropower project, which is expected to further boost demand for large excavators and loaders [2]. - The company has seen a 10.5% year-on-year growth in overseas revenue, reaching 8.52 billion, with significant growth in emerging markets [3]. - The sales of electric loaders in China have surged by 172.8%, with the company benefiting from a leading position in the electric loader market [4]. Summary by Sections Financial Performance - In H1 2025, the company reported a revenue of 18.18 billion, a 13.2% increase year-on-year, and a net profit of 1.23 billion, up 25.1% [1]. - The gross margin stood at 22.3%, a slight increase of 0.2 percentage points, while the net margin remained stable at 6.3% [1]. Market Demand - The earthmoving machinery segment saw a revenue of 11.65 billion, growing 17.3% year-on-year, with loaders and excavators experiencing over 20% and 25% growth in sales, respectively [2]. - The commencement of the Yaxia hydropower project is expected to further enhance demand for the company's machinery [2]. International Expansion - The company achieved overseas revenue of 8.52 billion, marking a 10.5% increase, with a notable 40% growth in emerging markets [3]. - The company’s market share in earthmoving machinery has increased, with significant growth in sectors like mining and aerial work platforms [3]. Electric Machinery Development - The sales of electric loaders increased by 193.0% year-on-year, with the company capturing over 50% of the industry’s electric loader exports [4]. - The company has received over 20 intent orders for autonomous electric loaders, indicating strong market interest [4]. Profit Forecast and Valuation - The report projects a slight downward adjustment in net profit forecasts for 2025-2027, with expected profits of 1.86 billion, 2.46 billion, and 3.08 billion, respectively [5]. - The expected EPS for the same period is projected to be 0.92, 1.22, and 1.52 yuan [5].

Group 1 - The core viewpoint of the report is that China Galaxy has given a "recommended" rating for Liugong (000528.SZ) based on several positive indicators [1] - Domestic sales are recovering, and overseas sales and profitability have reached new highs during the same period [1] - The market share of excavators has increased both domestically and internationally, with a significant growth in global sales of electrical equipment and accelerated growth in emerging businesses [1] Group 2 - The gross profit margin has improved year-on-year, although there has been a slight increase in the expense ratio [1] - There has been an increase in accounts receivable exposure, which has impacted operating cash flow due to the company's own financing leasing business [1]

Summary of Key Points from Conference Call Records Industry Overview - The mechanical industry is experiencing a comprehensive upward trend, with various segments at different stages of growth [1] - The AI-related industry chain, including AIDC, PCB, 3C equipment, and smart logistics, is a focus for the Huatai Securities mechanical team for the second half of this year and next year [2] Company-Specific Insights Ice Wheel Environment - Ice Wheel Environment is expected to achieve over 700 million yuan in profit this year, with approximately 30%-35% coming from AI-related business [3] - The overall growth rate for the company may reach 25%-30% next year, with AI business expected to account for 45% [3] - Current valuation is around 15 times next year's profit, with a potential market cap increase to 19-20 billion yuan, indicating about 40% growth potential [3] Lian De Co., Ltd. - Lian De Co., Ltd. is benefiting from AI performance, with projected revenue of 1.6-1.7 billion yuan and profit of about 320 million yuan next year [4] - The current valuation is below 20 times, with potential to rise above 30 times as AI revenue share becomes clearer [4] - Recent stock performance has been affected by a share reduction announcement and market doubts about capacity realization [5] - Despite recent stock performance, the long-term investment opportunity remains strong due to high industry barriers and demand from the U.S. and domestic construction orders [6][7] New Flag Micro-Assembly - New Flag Micro-Assembly's expansion plan is expected to bring significant performance elasticity, with high profit margins and substantial valuation flexibility [9] Dazhu CNC - Dazhu CNC is expected to benefit from the AI PCB trend, with anticipated order volume reaching 10 billion yuan and a profit margin of about 40% [10] Quick Intelligent - Quick Intelligent operates in high-value-added businesses in the semiconductor and 3C fields, with a valuation corresponding to 22-23 times by 2026, indicating significant space and valuation elasticity [10] Industry Challenges and Risks New Energy Equipment - The new energy equipment sector is in a downward cycle, with declining contract liabilities and inventory indicators signaling reduced orders [12] - The photovoltaic equipment industry is currently profitable, but cash flow may deteriorate in the second half of 2025, with no signs of order recovery [13] Lithium Battery Equipment - The lithium battery equipment sector is performing strongly, with leading companies like CATL driving industry expansion [15] - The solid-state battery sector is impacting the lithium battery equipment landscape, providing opportunities for smaller equipment companies [16] Industrial Automation - The industrial automation sector has shown mixed results, with leading companies performing well while second-tier companies face challenges [18] - A recovery is anticipated in the fourth quarter of this year and into 2026 [18] Investment Recommendations - The Huatai Securities mechanical team recommends focusing on AI-related companies, including Ice Wheel Environment, Lian De Co., Ltd., and others in the mechanical sector [2] - Attention should also be given to the engineering machinery sector, which is expected to see a recovery driven by domestic and international demand [24][26] - The textile equipment sector is facing challenges due to tariffs, but companies like Jack and Huashu Technology are showing resilience [27][28] - The X-ray equipment sector is showing signs of recovery, with companies like Meiya Optoelectronics and Yirui Technology performing well [29] Conclusion - Overall, the mechanical industry and its related sectors present various investment opportunities, particularly in AI and engineering machinery, while also facing challenges in new energy and textile equipment sectors.

Core Viewpoint - The acceleration of overseas expansion by listed companies is driven by policy support, technological innovation, and globalization strategies, with overseas business becoming a significant growth driver for performance [1] Group 1: Overseas Business Performance - In the first half of the year, 3,019 A-share listed companies reported overseas business revenue totaling 4.90 trillion yuan [1] - Companies with overseas business revenue exceeding 100 billion yuan include China National Petroleum Corporation, BYD, Midea Group, and Luxshare Precision [2] - BYD reported sales of 464,300 new energy vehicles overseas, a year-on-year increase of 128.25% [2] - Haier Smart Home achieved overseas sales revenue of 85.23 billion yuan, accounting for 46.88% of total revenue, with a year-on-year growth of 10.52% [3] Group 2: Market Expansion Strategies - The "going out" strategy of listed companies has evolved from merely exporting products to a more integrated approach involving local market penetration [3] - Localized teams are essential for meeting local demands and enhancing competitiveness in overseas markets [3] Group 3: Diversified "Going Out" Models - Companies are diversifying their overseas strategies to include production, technology, and capital expansion [4] - For instance, Sailun Group plans to invest 291 million USD in a tire production facility in Egypt, while BYD is set to establish a CKD factory in Malaysia [4] - Jiangsu Hengrui Medicine is collaborating with Merck Group for the commercialization of a drug, receiving an upfront payment of 15 million euros [4] Group 4: Capital Expansion - Hangzhou Guoli Microelectronics acquired 100% of Belgian company LUCEDA for 40 million euros, marking a significant move in capital expansion [5]

Investment Rating - The report maintains a "Buy" rating for the mechanical equipment industry, particularly highlighting investment opportunities in PCB equipment and undervalued high-growth engineering machinery [1]. Core Insights - The PCB equipment sector is expected to benefit significantly from the increasing demand for high-end HDI boards driven by AI computing server needs, with a projected market value growth of 33% year-on-year in 2024 [2][3]. - The engineering machinery sector is poised for sustained performance due to a cyclical upturn, with domestic excavator sales increasing by 22.3% year-on-year in the first half of 2025 [4]. - The oil service equipment market is entering a performance realization phase, driven by high demand in the Middle East, with projected revenue growth for leading companies like Jerry and Neway [5]. Summary by Sections PCB Equipment - Major PCB manufacturers are planning significant expansions in high-end HDI production capacity, with investments exceeding 60 billion yuan from companies like Shenghong Technology and Huadian [2]. - The global HDI board market is expected to grow at a rate of 18.8% in 2024, significantly outpacing the overall PCB industry growth of 5.8% [2][3]. - Key equipment segments to watch include drilling, exposure, and plating, with specific companies like Dazhu CNC and Xinqi Microelectronics highlighted for their roles in these areas [3][20]. Engineering Machinery - The domestic market is expected to maintain a 2-3 year upturn, with significant sales growth in excavators and loaders, supported by improved funding and replacement logic [4]. - The performance of leading companies such as Sany Heavy Industry and XCMG is expected to continue improving, with notable revenue and profit growth reported [4]. - The upcoming large-scale infrastructure projects, such as the Yarlung Tsangpo River project, are anticipated to further boost demand for engineering machinery [25][26]. Oil Service Equipment - The oil service equipment sector is experiencing a boom due to high demand in the Middle East, with significant investments projected in energy projects [5][38]. - Companies like Jerry and Neway are expected to see substantial revenue growth, with Jerry's revenue growth projected at 49% in Q2 2025 [5]. - The market for oil service equipment in the Middle East is expected to reach a scale of over 100 billion USD, indicating significant growth potential for Chinese companies [5][38].

Core Viewpoint - The company has demonstrated strong financial performance in the first half of 2025, with significant growth in net profit and sales across various business segments, particularly in traditional and emerging markets [2][3]. Financial Performance - The company achieved a net profit of 1.23 billion yuan, representing a year-on-year increase of 25.05% - The non-recurring net profit reached 1.146 billion yuan, up by 27.01% - The gross profit margin improved by 0.22 percentage points, and the return on equity increased by 0.99 percentage points [2]. Business Segments - The traditional earthmoving business generated revenue of 11.7 billion yuan, growing by 17% - Loader revenue increased by over 20%, with electric loader global sales surging by 193% - Excavator revenue rose by 25%, with domestic and overseas sales increasing by 31% and 22% respectively, leading to a market share increase of 1.6 percentage points domestically and 0.5 percentage points globally [2]. Overseas Market Performance - The company achieved record highs in overseas product sales, major client revenue, overall income, and net profit in the first half of the year - The overseas gross profit margin improved by 1.5 percentage points, with significant growth in emerging markets such as South Asia, Indonesia, and Central Asia, exceeding 40% [3]. Strategic Goals - The company announced its 14th Five-Year Plan, aiming for 60 billion yuan in revenue by 2030, with international revenue accounting for over 60% and a net profit margin of no less than 8% - The strategy focuses on core earthmoving machinery, development of mining equipment, industrial vehicles, and emerging businesses [4]. Investment in Indonesia - The company plans to invest 500 million yuan in a high-level manufacturing plant in Indonesia, expected to be operational by 2026 - This facility aims to meet the demand in Southeast Asia and mature markets in Europe and North America [5]. Financial Outlook - The company noted an increase in accounts receivable and a decline in operating cash flow, primarily due to overseas expansion and installment sales credit policies - The outlook for the second half of 2025 remains positive, with expectations of continued growth in the domestic construction machinery industry and favorable conditions in emerging markets [6].

Financial Performance - The company achieved an operating revenue of 18.181 billion CNY in the first half of 2025, a year-on-year increase of 13.21% [2] - Domestic revenue reached 9.658 billion CNY, growing by 15.69%, while overseas revenue was 8.523 billion CNY, up by 10.52% [3] - The international business accounted for 46.88% of total revenue, providing a solid foundation for the company's development [3] - Net profit attributable to shareholders was 1.230 billion CNY, reflecting a growth of 25.05% [3] - The gross profit margin increased by 0.22 percentage points, and the return on equity rose by 0.99 percentage points [3] Business Segments - Traditional earthmoving business revenue was 11.7 billion CNY, with a growth of 17% [3] - Loader revenue grew by over 20%, and electric loader sales surged by 193%, leading the industry in electrification [3] - Excavator revenue increased by 25%, with domestic and overseas sales rising by 31% and 22% respectively [3] - Emerging business segments, including industrial vehicles and lifting machinery, also showed significant profit growth [3] International Expansion - The company is accelerating its global layout, with overseas sales and net profit reaching historical highs in the first half of 2025 [4] - The overseas gross profit margin improved by 1.5 percentage points, with revenue from major industry clients increasing [4] - Emerging markets, particularly in South Asia, Indonesia, and Central Asia, saw growth rates exceeding 40% [4] Strategic Goals - The company aims to achieve a revenue target of 60 billion CNY by 2030, with international revenue exceeding 60% and a net profit margin of no less than 8% [5] - Key strategies include focusing on core earthmoving machinery, developing mining equipment, and enhancing global operational capabilities [5] Market Outlook - The Chinese engineering machinery industry is expected to continue its growth recovery in the second half of 2025, driven by equipment renewal cycles and increased investments in infrastructure [10] - The European market is anticipated to show slight recovery due to accelerated infrastructure projects and rising electrification [10] - Despite uncertainties in overseas markets, emerging markets are expected to maintain stable growth, supported by political and economic stability [10]