A research report indicates that the heavy truck industry remains at the starting point of an upward cycle, with the expanded scope of trade-in subsidy policies in 2025 expected to accelerate the return to average domestic sales levels. While export growth has temporarily slowed, the overseas market space remains vast. Considering the currently low valuations of truck stocks and the potential for future profits to reach new highs alongside sales volumes, the investment value of truck stocks has not been fully explored. Vehicle manufacturers recommended include Sinotruk Jinan Truck Co.,Ltd. (03808, 000951.SZ), Foton Motor (600166.SH), and FAW Jiefang (000800.SZ), which have alpha in product market share and outstanding export performance.

**Sales Performance:** August heavy truck wholesale, terminal, and export sales increased by +46.7%, +66.0%, and +15.6% year-on-year respectively.

According to the China Association of Automobile Manufacturers, August heavy truck wholesale sales reached 92,000 units, up +46.7% year-on-year and +7.9% month-on-month. From January to August 2025, cumulative heavy truck wholesale sales totaled 716,000 units, up +14.5% year-on-year.

According to compulsory traffic insurance data, August heavy truck terminal sales reached 67,000 units, up +66.0% year-on-year and +3.7% month-on-month. From January to August 2025, cumulative heavy truck terminal sales totaled 486,000 units, up +25.3% year-on-year. August heavy truck terminal sales maintained high year-on-year growth, with trade-in policies showing significant effects.

According to the General Administration of Customs, August heavy truck exports reached 39,000 units, up +15.6% year-on-year and +10.3% month-on-month. From January to August 2025, cumulative heavy truck exports totaled 246,000 units, up +7.1% year-on-year.

Specifically, August heavy truck exports to regions excluding Russia reached 38,000 units, up +71.7% year-on-year and +14.3% month-on-month. From January to August 2025, cumulative heavy truck exports to regions excluding Russia totaled 241,000 units, up +41.7% year-on-year.

August heavy truck exports to Russia reached 344 units, down -96.9% year-on-year and -77.6% month-on-month. From January to August 2025, cumulative heavy truck exports to Russia totaled 5,278 units, down -91.2% year-on-year.

The domestic heavy truck industry is expected to have approximately 12%-40% flexibility in sales volume for 2025, with current January-August domestic heavy truck sales performance within expected ranges.

According to compulsory traffic insurance data, cumulative heavy truck terminal sales from January to August this year reached 486,000 units. Based on normal seasonality annualization, full-year domestic heavy truck industry sales are expected to reach 723,000 units, representing a 20.0% year-on-year increase.

**Inventory:** Inventory levels are in a healthy position. According to industry data, as of the end of August 2025, total heavy truck industry inventory was 129,000 units, down 0.03 thousand units year-on-year and up 0.3 thousand units month-on-month. The dynamic inventory-to-sales ratio (current month total inventory/3-month rolling average of terminal sales) was 2.4, within a reasonable range.

**Demand:** Logistics demand has recovered somewhat since the beginning of 2025. According to the National Bureau of Statistics, August highway freight turnover showed a 3.8% year-on-year growth rate for the single month. From January to August 2025, cumulative highway freight turnover growth rate was 3.9% year-on-year, indicating some recovery in logistics demand since the beginning of 2025.

**Market Share:** According to the China Association of Automobile Manufacturers, Foton Motor's heavy truck cumulative wholesale sales market share from January to August 2025 increased by +5.4 percentage points year-on-year to 12.6%.

According to compulsory traffic insurance data, from January to August 2025, Dongfeng Group, Shaanxi Auto Group, and Foton Motor's heavy truck cumulative terminal sales market shares increased by +0.8, +1.0, and +2.3 percentage points year-on-year to 21.1%, 11.5%, and 12.3% respectively.

According to the China Association of Automobile Manufacturers, from January to August 2025, Sinotruk Group and Foton Motor's heavy truck cumulative export market shares increased by +5.1 and +5.2 percentage points year-on-year to 45.8% and 8.7% respectively.

**Risk Factors:** Declining industry prosperity; rising raw material prices; intensifying industry competition.