Construction machinery is a typical strong cyclical manufacturing industry, and the industry’s prosperity is anchored by four major variables: domestic infrastructure implementation, real estate construction, equipment renewal and replacement, and overseas infrastructure investment.
Sany Heavy Industry is the leader in domestic construction machinery. Its products cover all categories of excavators, concrete machinery, hoisting machinery, and new energy engineering equipment. Its business spans domestic and global markets. Secondary market prices are affected by multiple factors such as industry cycle fluctuations, raw material costs, overseas geopolitical environment, and sector capital rotation.
From the perspective of the industry’s macro environment, after the construction machinery industry fell from the cycle high point in 2021, after several years of capacity clearance and demand adjustment, the industry’s growth logic has undergone a fundamental change at this stage. It was mainly driven by real estate in the past, switching to a new pattern of equipment updates + infrastructure support + overseas exports.
From the analysis of the domestic demand side, the last round of hot-selling equipment in the industry was concentrated from 2016 to 2021. According to the 8 to 10-year use cycle of construction machinery, a large number of old equipment has entered a centralized scrapping and replacement cycle. Construction machinery trade-in subsidy policies have been implemented in many places in China, continuing to release the demand for stock replacement.
At the infrastructure level, special bonds continue to increase the construction of major projects such as transportation, water conservancy, urban renewal, and industrial parks, supporting the lower limit of domestic demand for engineering machinery; the real estate side is still in the inventory adjustment stage, and new construction data are weak, which suppresses the demand for medium and large tonnage engineering equipment. Small excavators maintain steady growth due to municipal and farmland transformation needs.
On the supply side, the industry price war that has lasted for many years has gradually eased. In 2026, leading complete machine manufacturers will gradually increase the prices of excavator products, and the industry’s profit recovery is expected to rise. However, the industry’s existing production capacity is still abundant, and the low-price competition among small and medium-sized manufacturers has not completely disappeared.
Overseas markets have become the core growth of the industry. Infrastructure construction in emerging economies around the world is accelerating. Domestic construction machinery continues to seize global share with its cost-effective advantages. Overseas revenue has become a safety net for the performance of leading companies.
Based on the fundamentals and operating data of Sany Heavy Industry, relying on the complete machine industry chain, global localized production base, and mature distribution system, the company’s domestic market share of excavating machinery and concrete machinery has consistently ranked first in the industry.
In 2025, the company’s annual revenue will be 89.7 billion yuan, a year-on-year increase of 14.4%. The net profit attributable to the parent company will be 8.408 billion yuan, a year-on-year increase of 41.2%. The operating cash flow will be close to 20 billion yuan, and the profit quality will remain stable.
In the first quarter of 2026, the revenue was 24.147 billion yuan, a year-on-year increase of 14.03%, and the net profit attributable to the parent company was 2.481 billion yuan, a slight year-on-year increase of 0.46%. The slowdown in profit growth was mainly dragged down by the large exchange losses caused by the appreciation of the RMB. After excluding the impact of exchange, the main business profit increased significantly. The gross profit margin of the current period increased slightly, and the price increase gradually offset the impact of raw material fluctuations.
In terms of business structure, the three core categories of excavators, concrete machinery, and cranes contribute more than 70% of revenue; the global layout has achieved outstanding results, with overseas revenue accounting for more than 60% in 2025, African regional revenue growing at a year-on-year rate of over 55%, European and American high-end market products continuing to make breakthroughs, and overseas business gross profit margins significantly higher than domestic ones, becoming the core source of profits.
The new energy transformation has been steadily implemented, and the sales of electric excavators, electric mixers and other products have grown rapidly. The annual new energy equipment revenue has doubled year-on-year. Electric products have gradually opened up the second growth curve; after-market maintenance and equipment rental businesses have steadily expanded, optimizing the company’s long-term income structure.
The research and development end focuses on iteration of intelligent and low-carbon complete machines, continues to optimize product energy consumption and construction efficiency, and consolidates product competition barriers.
In terms of secondary market capital and valuation, the market’s pricing logic for Sany Heavy Industry is clearly divided.
Long-term industrial funds anchor the three long-term logics of equipment update cycles, global expansion, and new energy equipment expansion, and continue to track fundamental indicators such as monthly domestic excavator sales, overseas orders, and changes in product gross profit margins; short-term funds follow the rotation of the machinery sector, commodity raw material prices, and changes in domestic and overseas macro data. The rapid exchange of chips brings short-term fluctuations in the market.
A horizontal comparison of listed companies in the same industry shows that the company’s full-category product layout + global first-mover advantages are prominent, and it has the dual attributes of cyclical recovery and new energy growth. The valuation trend is also affected by the expected recovery of the industry cycle and the liquidity of the market. The difference in capital expectations for different holding periods further amplifies the room for stock price fluctuations. Subsequent valuation changes are closely bound to the pace of domestic and foreign demand realization and the extent of profit restoration.
Objectively sort out the multiple uncertainties and risks hidden in corporate operations: First, the recovery of domestic real estate investment is less than expected, dragging down the demand for medium and large-tonnage construction machinery, and the recovery rate of domestic demand is lower than market prediction; second, overseas geopolitical friction, rising trade barriers, and frequent exchange rate fluctuations, there are periodic disturbances in overseas business revenue and profits;
Third, the prices of upstream raw materials such as steel have fluctuated significantly, eroding the profit margins of complete machine manufacturing; fourth, peers are accelerating their overseas expansion and new energy product layout, and domestic and overseas market competition continues to intensify, which may suppress the room for product price increases; fifth, the technology iteration of the new energy engineering machinery industry is accelerating, and if the progress of product development and implementation is not as fast as that of peers, it may lose market segment share.
Looking at the medium and long-term development of the industry, the four major industrial logics of updating existing equipment, steady growth of infrastructure, exporting domestic equipment overseas, and intelligent transformation of new energy have not undergone fundamental changes. The construction machinery industry has a solid foundation for growth.
The short-term market is affected by random factors such as commodity price fluctuations, domestic and overseas monthly production and sales data, sector capital flows, and the pace of macro policy implementation. There is strong uncertainty in price fluctuations.
Market participants who pay attention to the target can long-term track the industry’s monthly production and sales data, raw material quotations, overseas project implementation progress, gross profit margin changes and other key information, and rationally view secondary market fluctuations based on industry fundamentals.
This article is only a financial observation and analysis and does not constitute any investment advice.
There are risks in the stock market, so investment needs to be cautious.
