The total sales volume of excavators in January was +1.1% year-on-year, a positive year-on-year growth for ten consecutive months. In January 2025, 12,512 excavators of various types were sold, a year-on-year increase of 1.1%. Among them, domestic sales were 5,405 units, a year-on-year decrease of 0.3%; The export volume was 7,107 units, a year-on-year increase of 2.19%. The growth rate of excavator sales has been positive year-on-year for ten consecutive months since April 2024. In January 2025, the number of operating hours of excavators in China will be 66.2 hours/month, a year-on-year decrease of 17.2%, mainly due to the impact of the Spring Festival holiday. Considering the low base in February 2024, we believe that the growth rate of excavator sales is expected to accelerate this month. At the industry level, domestic demand is expected to recover growth due to factors such as the arrival of a new round of centralized replacement cycle, the gradual emergence of the effect of real estate easing policies, and the catalytic effect of the country's large-scale renewal policies. Overseas structural boom, the demand for infrastructure construction in countries along the "Belt and Road" continues to grow, driving export growth. It is recommended to pay attention to: XCMG Machinery (000425. SZ), Sany Heavy Industry Co., Ltd. (600031. SH), Zoomlion (000157. SZ）。

The manufacturing PMI fell in the off-season, focusing on the pro-cyclical recovery process. In January 2025, China's manufacturing PMI was 49.1, -0.1 pct year-on-year and -1 pct month-on-month; The manufacturing new orders PMI was 49.2%, +0.2 pct year-on-year and -1.8 pct month-on-month, and the manufacturing production PMI was 49.8%, -1.5 pct year-on-year and -2.3 pct month-on-month. January is the off-season for the traditional manufacturing industry, and it is normal for the index to fall. And this year's spring holidays are at the end of January and early February, and some enterprises have taken early holidays to suppress enterprise production. Industrial machine tools are the main varieties of general equipment, which are greatly affected by policy support and macroeconomy. We believe that under the background of strong policy support, the domestic macro economy is expected to stabilize, and the pro-cyclical recovery sector can be deployed on the left side of the dip. It is recommended to pay attention to: Huazhong CNC (300161.SZ), Neway CNC (688697.SH), Haitian Precision (601882. SH), Halma Technology (002595. SZ), Ou Keyi (688308. SH) and so on.

China and Mongolia signed an agreement on the construction of cross-border connecting railways, which is expected to contribute to the increase in new equipment. On February 14, 2025, China and Mongolia signed the "Agreement between the Government of Mongolia and the Government of China on the Construction of the Cross-border Connecting Railway between the Gashun Suhaitu-Ganqimoud Port", which is expected to start in April 2025 and be completed within two and a half years. During the period, it is expected to continue to release orders for rail transit equipment and provide stable business growth points for related enterprises. From the perspective of policy:

On July 18, 2024, the Ministry of Transport and other thirteen departments issued a notice on the issuance of the "Action Plan for Large-scale Equipment Renewal of Transportation", pointing out seven major renewal actions and pointing out that 2028 is the time node for the main goal to be achieved. From the perspective of demand: On November 5, 2024, China Railway Group issued the second bidding announcement for the 350-kilometer Fuxing EMU, bidding a total of 80 units, and the total bidding has reached 245 units as of November 2024. Policies promote the release of renewal demand, and the valuation center of the industry is expected to move up. Attention: CRRC (601766. SH), China Railway Industry (600528.SH), China General Number (688009.SH), etc.

The United States plans to strengthen the export control of instruments and push back the independent and controllable high-end instruments. On January 15, 2025, the U.S. Department of Commerce's Bureau of Industry and Security (BIS) issued an interim Final Rule (IFR) that imposes targeted export controls on certain scientific instruments, including high-parameter flow cytometry and liquid chromatography-mass spectrometry. As of the end of 2021, 97.9% of the large-scale mass spectrometry instruments in China's universities and institutes are imported instruments, and the number of domestic instruments is only 230 sets, accounting for 2.1%, and more than seventy percent of the mass spectrometry instruments come from the United States. We believe that the United States has strengthened the control of high-end scientific instruments in China, forcing the process of independent and controllable mass spectrometers and other high-end instruments to speed up, and the domestic mass spectrometer leader is expected to benefit. Suggested attention: LabTech (688056. SH), Concentrating Technology (300203. SZ), Hexin Instrument (688622. SH）。

Risk warning: macroeconomic prosperity is less than expected, fixed asset investment is less than expected, raw material price increase risk, industry and market competition risk, industrial policy change risk, third-party data error risk, etc.