Shares of construction machinery companies are trending lower in Hong Kong trading, with SANY HEAVY IND (00631) dropping 6.83% to HK$18.00, SINOTRUK (03808) falling 5.58% to HK$38.58, SANY INT'L (00631) declining 3.42% to HK$9.045, and ZOOMLION (01157) slipping 2.05% to HK$5.72 at the time of writing.

The sell-off comes as the yuan appreciated more than 3% against the U.S. dollar in the first half of the year, reaching a three-year high. According to interim results from the four major equipment manufacturers, total exchange losses recorded under financial expenses for the first half of 2026 amounted to roughly RMB 4.37 billion, compared with aggregate exchange gains of approximately RMB 1.96 billion in the same period last year.

Where the pressure is heading next: Analysts at Soochow Securities note that currency-related headwinds for the sector have eased considerably in the third quarter, and they anticipate a marked improvement in both quarter-over-quarter and year-over-year earnings during this period.

GF Securities echoes this view, pointing out that exchange rate impacts dampened apparent profit growth for construction machinery firms in Q1 of 2026. In Q2, the high base from exchange gains in the same quarter of 2025 may continue to pressure year-over-year comparisons. However, looking ahead to Q3, once the exchange rate risk subsides, reported net profit for exporters is expected to align more closely with operating profit, delivering high-elasticity growth.