Jefferies has published a research report indicating that sales of construction machinery in mainland China saw a significant increase in April this year, driven by replacement demand and the shift towards electrification.

Exports for the first four months of 2026 have already surpassed the total for the entire year of 2025, with strong performance in markets across Africa, Oceania, and Latin America, while conditions in the EU and US markets have also shown improvement.

The firm noted that the US-Iran conflict has only caused minor logistical disruptions.

Jefferies reiterated its positive outlook on the sector.

It has lowered its profit forecasts for SANY HEAVY IND (HKEX: 06031) and Xuzhou Construction Machinery Group Co., Ltd. (SZSE: 000425) for the current and next fiscal years to reflect weak performance in 2025 and the first quarter of this year.

Conversely, the firm has raised its forecasts for Zoomlion Heavy Industry Science And Technology Co.,Ltd. (HKEX: 01157) to reflect its strong revenue performance last year.

Based on valuation considerations, Jefferies has upgraded its rating on Zoomlion's H-shares and A-shares to "Buy".

The target price for Zoomlion's H-shares has been raised from HK$6.3 to HK$10.9.

The firm maintains a "Buy" rating on Sany Heavy Industry's A-shares and has initiated coverage on its H-shares with a "Buy" rating and a target price of HK$24.

Due to weak earnings, it has downgraded Xuzhou Construction Machinery to a "Hold" rating.