EB SECURITIES has released a research report indicating that domestic sales of excavators accelerated their growth in April 2026, while export sales performed strongly. Major manufacturers have issued notices to raise excavator prices, suggesting a potential reversal in the domestic price competition within the engineering machinery sector. This shift is expected to lead to a sustained improvement in the profitability of these manufacturers. The bank remains optimistic about the ongoing growth driven by equipment renewal cycles, which will continue to boost sales in the engineering machinery industry. In the short term, the sector has positive catalysts. Proactive fiscal policies are anticipated to stimulate infrastructure investment, ensuring a sustained recovery in medium-term demand. Furthermore, as the industry advances in internationalization, electrification, and experiences rising demand for mining machinery, leading engineering machinery companies are poised to see increases in both volume and profit. Additionally, the commencement of the Yarlung Tsangpo hydropower project is expected to further drive demand for engineering machinery.

Key points from EB SECURITIES are as follows:

**Accelerated Growth in Domestic Excavator Sales for April 2026** In April 2026, China's excavator sales (including exports) reached 28,745 units, a year-on-year increase of 29.8%. Domestic sales accounted for 16,920 units, growing 34.9% year-on-year. From January to April 2025, total excavator sales were 102,081 units, up 22.2% year-on-year, with domestic sales at 56,499 units, a 15.0% increase. The accelerated growth in domestic excavator sales in April 2026 reinforces the bank's view for the full year that the continuous growth from equipment renewal will drive sales. The previous sales cycle for excavators and other engineering machinery saw rapid growth from the low point in late 2015, peaking in early 2021. Considering the typical service life of 8-10 years for such equipment, the bank estimates a compound annual replacement growth rate of approximately 30% for domestic engineering machinery starting in 2026 and the following years, which is expected to provide strong support for future excavator sales. Moreover, the substantial export of used engineering machinery to developing countries has objectively reduced the domestic stock, which is another key factor supporting new machine sales.

**Three Major Manufacturers Issue Price Hike Notices, Signaling a Potential Reversal in Price Competition** Since May 2026, three major engineering machinery manufacturers—Sany Heavy Industry Co., Ltd., XCMG Construction Machinery Co., Ltd., and LiuGong—have issued notices to raise excavator prices. Sany Heavy Industry Co., Ltd. plans to increase prices by 5% effective May 15. XCMG Construction Machinery Co., Ltd. plans to raise prices by 3%-5% for different models starting June 1. LiuGong plans a 5% price increase across its full excavator product line effective May 20. While the price hikes are primarily influenced by rising upstream raw material costs, they fundamentally reflect the ongoing recovery in domestic excavator demand and the enhanced competitiveness of domestic manufacturers. As these price increases are implemented, the intense domestic price competition is expected to reverse, shifting from price-based to value-based competition. This change could lead to simultaneous growth in both volume and price for engineering machinery manufacturers.

**Strong Financial Support Ensures Sustained Recovery in Domestic Demand** On the financial front, the 2026 Government Work Report proposed a central government budget investment of 755 billion yuan and 800 billion yuan in ultra-long-term special treasury bonds for "dual major projects" construction this year. Additionally, 200 billion yuan in ultra-long-term special treasury bonds is allocated to support large-scale equipment renewal. The bank believes equipment renewal is the core driver of the current engineering machinery recovery. As the supporting funds are gradually deployed, the equipment renewal process is expected to continue, providing strong support for the sector's sustained recovery. Furthermore, the commencement of key projects like the Yarlung Tsangpo hydropower project is anticipated to continuously drive demand growth in the engineering machinery industry, ensuring a sustained recovery in domestic demand.

**Continued Growth in Excavator Exports for April 2026, Significant Potential Remains for International Expansion** Excavator exports in April 2026 reached 11,825 units, a year-on-year increase of 23.2%. From January to April 2026, excavator exports totaled 45,582 units, growing 32.5% year-on-year. The 2026 Government Work Report reiterated the commitment to further expand high-standard opening-up and strengthen alignment with Belt and Road Initiative countries. China's engineering machinery exports in 2026 face both opportunities and challenges, including changes in the Middle East situation, rising demand for infrastructure and mining machinery in Southeast Asia, Africa, and South America, and increased penetration into high-end markets in Europe and America. As China further expands its high-standard opening-up and leading companies increase their overseas presence, engineering machinery exports are expected to maintain a growth trend.

**Electric Loader Sales Maintain Strong Growth Trend in April 2026, Electrification Expected to Accelerate** Sales of electric loaders in April 2026 were 5,575 units, a year-on-year surge of 90.7%. The electrification rate reached 36.1%, an increase of 11.0 percentage points year-on-year. From January to April 2026, electric loader sales were 15,870 units, up 95.0% year-on-year, with an electrification rate of 29.5%, a rise of 10.2 percentage points year-on-year. The 2026 Government Work Report proposed accelerating the phasing out of outdated capacity and supporting the innovative application of green, low-carbon technologies and equipment. The bank views greening and electrification as key future development directions for the engineering machinery industry. Domestic manufacturers are leveraging the trend of electrification to gain competitive advantages, and the electrification process is expected to accelerate, leading to further improvements in manufacturers' revenue and profits.

**Forklift Sales Continue to Grow, Smart Logistics Opens New Growth Space** In March 2026, sales of various forklifts reached 175,971 units, a year-on-year increase of 15.0%. Domestic sales accounted for 120,611 units (including 666 AGVs), growing 11.8% year-on-year, while exports were 55,360 units (including 76 AGVs), up 22.4% year-on-year. From January to March 2026, total forklift sales were 398,612 units, a 14.5% year-on-year increase. Domestic sales were 253,084 units (including 1,874 AGVs), up 10.5% year-on-year, and exports were 145,528 units (including 270 AGVs), growing 22.1% year-on-year. The rapid development of industries like robotics and artificial intelligence is driving the increased penetration of unmanned forklifts. According to the "Industrial Development Blue Book of Fork-type Mobile Robots (2024 Edition)," sales of unmanned forklifts in China reached 39,000 units in 2025, a year-on-year increase of 39.3%, yet the penetration rate was only 3.2%, indicating vast market growth potential.

**Mining Machinery Sector Continues to Improve, Broad Growth Space for Domestic Manufacturers** Driven by increased global mining capital expenditure, expansion in emerging markets, and trends towards intelligence and electrification, the mining machinery sector continues to improve, with companies maintaining high levels of revenue and orders. Relevant data shows the global mining machinery market size was approximately $123 billion in 2025 and is projected to grow to $160.3 billion by 2030, representing a compound annual growth rate of about 5.4%. According to the "2025 Top 50 Global Mining Equipment Manufacturers" list, the total sales of the top 50 companies were $76.66 billion. Chinese companies accounted for $14.72 billion in sales, representing a 19.2% share. Compared to leading international mining machinery companies like Caterpillar and Komatsu, Chinese mining machinery enterprises still have significant room to increase their global market share. The bank believes mining machinery is an important future growth source for engineering machinery companies. With increasing global mining capital expenditure, Chinese mining companies expanding overseas, and the continuous improvement in product strength of Chinese mining machinery manufacturers, the market share of Chinese engineering machinery manufacturers in the mining machinery field is expected to increase substantially.

**Risk Analysis:** Infrastructure investment may fall short of expectations; engineering machinery exports may underperform; industry price competition may intensify; risks related to uncertainty in Sino-US tariffs; foreign exchange rate fluctuation risks.