China earthmoving machinery sector Report Interpretation

Overview

This monthly tracker assesses China’s excavator and loader demand using July and January-to-July 2026 sales data. Nomura concludes that industry conditions continued to improve, with exports cushioning domestic cyclicality and loader electrification advancing rapidly.

Core views

China’s earthmoving-machinery market maintained solid year-on-year growth in July 2026. Major manufacturers sold 19,521 excavators, up 13.9% year on year: domestic sales were 7,608 units, up 4.13%, while exports were 11,913 units, up 21.2%. For the first seven months of 2026, excavator sales totaled 171,841 units, up 24.8%; domestic sales rose 18.8% to 86,633 units and exports rose 31.7% to 85,208 units. The report views the faster export growth as evidence that overseas demand remains a key support even as domestic conditions stabilize. Loader data showed still stronger momentum. July loader sales were 11,774 units, up 30.8% year on year, with domestic volume of 5,770 units up 26.8% and exports of 6,004 units up 34.9%. In 7M26, loader sales reached 93,826 units, up 27.2%; domestic sales increased 17.4% to 47,166 units and exports increased 38.9% to 46,660 units. Nomura estimates that exports generated 60.0% of the year-on-year increase in excavator sales and 65.1% of the increase in loader sales in 7M26. It attributes this support to overseas channel expansion and product upgrades by leading Chinese original-equipment manufacturers, alongside growth in Belt and Road emerging markets. These developments should, in Nomura’s view, help offset domestic cyclical volatility. Electrification is progressing unevenly across the two product categories. Electric loaders represented 58.1% of domestic loader sales in 7M26 and 62.8% in July alone; July domestic electric-loader sales were 3,622 units. Electric-excavator adoption remained limited, at only 0.3% of domestic excavator sales in 7M26, with 227 units sold domestically during the period. The report links the low excavator penetration to more fragmented operating conditions and the requirement to sustain high-intensity workloads. Nomura argues that growth accelerated in 2Q26 relative to 1Q26 as domestic demand stabilized and improved while overseas demand remained strong. It expects domestic construction-machinery demand to benefit from equipment renewal and infrastructure work, including farmland and water-conservancy construction, while further emerging-market expansion and overseas channel development support exports. On this industry backdrop, it continues to recommend Sany Heavy Industry and XCMG, which have high earthmoving-machinery exposure, and component supplier Hengli Hydraulic.

Analysis framework

The report tracks monthly CCMA shipment data for excavators and loaders, separates domestic and export demand, and compares year-on-year growth and 7M26 cumulative volumes. It then estimates exports’ share of incremental industry sales, reviews electrification penetration by product type, and links the data to demand drivers and selected stock recommendations.

Methodology notes

• Industry AnalysisSupply-demand framework

  Monthly domestic and export sales-volume tracking for excavators and loaders

  The report uses shipment volumes and year-on-year growth to assess demand conditions, distinguishing domestic construction activity from overseas demand.

• Industry AnalysisUpstream-Midstream-Downstream Transmission

  Exports, OEM channel expansion and downstream infrastructure demand as drivers for machinery makers and a component supplier

  The report connects infrastructure and replacement demand to equipment sales, and connects OEM earthmoving exposure to the recommended manufacturers and component supplier.

• Valuation methodsP/E and PEG Valuation

  Target P/E multiples applied to 2026F EPS for recommended companies

  For the individual stock disclosures, Nomura derives target prices by multiplying its 2026 forecast EPS by a target P/E multiple, benchmarked against historical or peer valuation levels.

Asset mapping & comparison

Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).

• Sany Heavy Industry (600031 CH)

  Recommended beneficiary of continued earthmoving-machinery demand and export growth.

  Strengths

  High exposure to earthmoving machinery.

  Comparison

  Nomura applies a 24x target P/E to 2026F EPS of CNY1.21, in line with the company’s 10-year historical P/E average, to derive a CNY28.93 target price.

  Risks

  Global and regional competition, weaker R&D progress, weaker downstream demand, geopolitical and FX risks, and raw-material price volatility.

• XCMG (000425 CH)

  Recommended beneficiary of continued earthmoving-machinery demand and export growth.

  Strengths

  High exposure to earthmoving machinery.

  Comparison

  Nomura applies an 18x target P/E, broadly in line with comparable-company averages, to 2026F EPS of CNY0.76 to derive a CNY13.60 target price.

  Risks

  Global and regional competition, weaker R&D capability, slower mining-machinery expansion, weaker China and overseas demand, global operating complexity, geopolitical, raw-material and FX risks.

• Hengli Hydraulic (601100 CH)

  Recommended core construction-machinery component supplier linked to industry demand.

  Strengths

  Core construction-machinery component exposure.

  Comparison

  Nomura applies a 49x target P/E to 2026F EPS of CNY2.68 to derive a CNY131.12 target price; the multiple is at a discount to the peer-average 2026E P/E.

  Risks

  Weaker domestic and international downstream demand, geopolitical tensions, slower new-business expansion, raw-material price fluctuations, investment-project delays and FX risk.

Key data

• July 2026 excavator sales19,521 units; +13.9% y-yDomestic sales were 7,608 units (+4.13% y-y) and exports were 11,913 units (+21.2% y-y).
• 7M26 excavator sales171,841 units; +24.8% y-yDomestic sales were 86,633 units (+18.8%) and exports were 85,208 units (+31.7%).
• July 2026 loader sales11,774 units; +30.8% y-yDomestic sales were 5,770 units (+26.8% y-y) and exports were 6,004 units (+34.9% y-y).
• 7M26 loader sales93,826 units; +27.2% y-yDomestic sales were 47,166 units (+17.4%) and exports were 46,660 units (+38.9%).
• Exports' contribution to 7M26 volume growth60.0% for excavators; 65.1% for loadersNomura estimate based on incremental sales volumes.
• Domestic electric-loader penetration58.1% in 7M26; 62.8% in JulyElectric loaders accounted for 27,424 domestic units in 7M26 and 3,622 in July.
• Domestic electric-excavator penetration0.3% in 7M26227 electric excavators were sold domestically in 7M26.

Impact & implications

Nomura sees exports as a durable buffer against domestic cyclicality and believes the combination of equipment renewal, infrastructure projects and overseas channel expansion supports continued industry improvement. It highlights loader electrification as a meaningful product transition, while excavator electrification remains constrained by operating requirements.

Risks

• For Sany Heavy Industry, changes in global and regional competition, weaker R&D progress, weaker downstream demand, geopolitical and FX risks, and raw-material price volatility could impede the target price.
• For XCMG, weaker R&D capability, slower mining-machinery expansion, lower China and overseas demand, a complex global operating environment, geopolitical risks and input or FX volatility could impede the target price.
• For Hengli Hydraulic, weaker domestic or international downstream demand, geopolitical tensions, slower new-business expansion, raw-material-price fluctuations, project delays and FX risk could impede the target price.