April Excavator Sales Sustain High Growth, and Price Hikes May Support Margin Recovery

Overview

This report reviews Chinese April excavator sales data. According to CCMA data, total April sales were 28,745 units, up 30% year-over-year and down 23% month-over-month. Cumulative sales in the first four months of 2026 were 102,081 units, up 22% year-over-year. Morgan Stanley believes that improving domestic utilization and operating hours, along with higher export share and strong mining demand, indicate continuing support for the construction machinery cycle.

Core views

The core view is that the domestic construction machinery upcycle remains in place. Domestic sales rose 35% year-over-year in April, faster than the overall pace; exports rose 23% year-over-year, and cumulative sales in the first four months rose 32% year-over-year. At the same time, excavator price hikes starting in May may offset rising material costs and support month-over-month margin recovery. The report favors Sany, Zoomlion and Hengli Hydraulic, while the overall industry view remains In-Line.

Analysis framework

The report uses monthly sales, year-over-year and month-over-month changes, domestic and export split, price adjustments, and the valuation methods of key companies as the primary analytical framework. At the company level, the report uses methods including P/E multiples, A-H premium, and DCF to explain target price or valuation logic.

Methodology notes

• industry cycle trackingmonthly sales and domestic/export split

  Use excavator sales, year-over-year and month-over-month changes, as well as domestic and export mix, to assess construction machinery demand momentum.

  April total, domestic, and export sales all grew year-over-year, and the report therefore views the industry upcycle as still persistent.

• valuation methodP/E multiple method

  Apply a target P/E multiple to 2026 expected profit or EPS excluding FX impact.

  The report notes that Zoomlion H-shares use 13x 2026e P/E, with A-share target prices incorporating a 20% A-H premium; Sany uses 23x 2026e P/E; Hengli core business uses 35x 2026e P/E.

• valuation methodDCF

  Discount future cash flows over the long term to estimate business value.

  Hengli's humanoid robot components business uses DCF, discounting 2025-2050e cash flows, with WACC at 11% and terminal growth rate at 4%.

Asset mapping & comparison

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

• Sany Heavy Industry Co., Ltd. (600031.SS)

  One of the favored full-machine construction equipment names in the report, benefiting from the domestic construction machinery upcycle, excavator demand, and overseas penetration.

  Strengths

  Valuation is based on 23x 2026e P/E; foreign-exchange headwinds are seen as a short-term factor and broadly already priced by the market.

  Weaknesses

  Intensifying competition may weaken pricing power, and sales performance in emerging overseas markets may be below expectations.

  Comparison

  Highly sensitive to the industry cycle, and a key security for tracking the linkage between Chinese excavator sales and equity performance.

  Risks

  Domestic infrastructure and real estate investment growth below expectations, weaker-than-expected pricing power due to competition, and overseas sales underperforming versus expectations.

• Zoomlion Heavy Industry (000157.SZ/1157.HK)

  One of the favored construction machinery names in the report, benefiting from replacement demand and demand for excavators and aerial work platforms.

  Strengths

  H-share valuation is based on 13x 2026e P/E, with A-share target price derived using a 20% A-H premium.

  Weaknesses

  Sensitive to infrastructure, real estate, and overseas demand.

  Comparison

  Along with Sany, it is an OEM whose performance is affected by the industry upcycle and price hikes.

  Risks

  Infrastructure and real estate demand growth below expectations, and overseas demand below expectations.

• Jiangsu Hengli Hydraulic Co.Ltd (601100.SS)

  One of the favored hydraulic components and humanoid robot components-related names in the report.

  Strengths

  Core business is valued at 35x 2026e P/E, while humanoid robot components are valued with DCF; target price is Rmb133.

  Weaknesses

  Higher dependence on Chinese excavator and valve demand, and expansion of non-excavator component coverage.

  Comparison

  Compared with OEMs, Hengli is more focused on components and supply-chain penetration logic, while also containing upside from humanoid robot components optionality.

  Risks

  A sharp decline in Chinese excavator and valve demand, failure of non-excavator component share expansion, and slower-than-expected humanoid robot penetration.

Key data

• April total excavator sales28,745 units, y/y +30%, m/m -23%Cumulative sales of 102,081 units in the first four months of 2026, y/y +22%.
• April domestic sales16,920 units, y/y +35%, m/m -30%Cumulative sales of 56,499 units in the first four months of 2026, y/y +15%.
• April export sales11,825 units, y/y +23%, m/m -11%Cumulative sales of 45,582 units in the first four months of 2026, y/y +32%.
• Price increase rangeSany Heavy +5%, XCMG +3%-5%, Liugong +5%The hikes took effect on May 15, June 1, and May 20 respectively, mainly due to higher material costs.
• Hengli Hydraulic target priceRmb133Derived by combining a 35x 2026e P/E for core business with DCF for humanoid robot components.

Impact & implications

The sales data and price actions together point to possible improvement in construction machinery demand and profitability. For full-machine makers, domestic replacement demand, infrastructure and real estate construction intensity, and overseas penetration are key drivers; for component firms, excavator and valve demand and new business penetration may provide valuation support. If price hikes are accepted by the market, industry margins may show month-over-month recovery.

Risks

• Infrastructure and real estate investment growth below expectations could weigh on domestic construction machinery demand.
• Overseas demand below expectations or weak sales performance in emerging overseas markets.
• Intensifying competition could weaken firms' pricing power versus expectations, limiting full price pass-through.
• A sharp drop in Chinese excavator and valve demand.
• Humanoid robot penetration slower than expected, impacting related component valuations.

What to watch

• Subsequent monthly excavator sales year-over-year and month-over-month changes.
• Actual implementation and dealer-side acceptance of price hikes by Sany, XCMG, Liugong and others.
• Material cost movements and the extent of month-over-month margin recovery by OEMs.
• Domestic operating hours, equipment utilization, and infrastructure and real-estate construction activity.
• Changes in Chinese brands' overseas market share and global mining demand.
• Hengli's penetration and market share evolution within the humanoid robot components supply chain.