CICC released a research report stating that global construction machinery OEMs have reported their 2Q26 results. Currently, domestic Chinese construction machinery companies derive approximately 60% of their revenue from overseas markets. The firm believes that end-market demand for overseas construction is likely to continue strengthening.

Specifically, data center and rental demand are driving North American requirements, while Latin America is primarily supported by public investment. CICC recommends keeping an eye on Sany Heavy Industry (600031.SH), XCMG Construction Machinery (000425.SZ), Hengli Hydraulic (601100.SH), Zoomlion Heavy Industry (000157.SZ), and Caterpillar, maintaining their earnings forecasts, ratings, and target prices unchanged.

Key Takeaways from CICC

Caterpillar: Revenue Beats Expectations, Strong Recovery in Americas

In 2Q26, construction industry revenue reached $8.346 billion, a 35% year-on-year increase. User sales grew for the sixth consecutive quarter, up 22%, while dealer inventories expanded by $400 million. Construction segment profit was $1.947 billion in 2Q26, a 57% year-on-year rise. Resource revenue for 2Q26 came in at $4.648 billion, up 20% year-on-year, with segment profit of $693 million, a 23% increase. Due to high order rates, the company expects full-year user sales to continue growing. Regionally, a significant recovery is evident in North and Latin America.

Komatsu: Solid Revenue Growth, Raises Full-Year Guidance

Construction equipment revenue was 502.6 billion yen, up 15.3% year-on-year, or 5.3% excluding currency effects. Africa, Oceania, the Americas, and Europe performed exceptionally well. Mining revenue totaled 462.4 billion yen, a 13.8% year-on-year increase, or 2% excluding currency fluctuations. The company has raised its sales volume forecast for seven main products in the Construction, Mining, and Utilities division from the April 2026 estimate of -5% to 0%, to a range of 0% to 5% growth.

Downstream Demand Outlook

Construction Demand: CICC expects overseas end-market demand for construction to continue strengthening. Data center and rental activities are fueling North American demand, while Latin America is being driven by public investment.

Mining Demand: Although coal demand is weak, leading to a notable decline in sales in Indonesia, strong demand for gold and copper ores is driving significant growth in Latin America and Africa. The firm is optimistic about sustained mining demand going forward.

Risks

Downside risks include weaker-than-expected end-market demand and tariff risks.