According to the Zhijin Finance APP, HAITONG SEC released a Research Report stating that the global share of the forklift Industry has increased, and product structure has improved, positioning domestic leaders to open up market space and profit potential. Overseas markets have become an important market for China's forklift sales, with the sales volume in overseas markets approaching twice that of the domestic market. Both developed and Emerging Markets present expansion opportunities. On one hand, the global scale is expected to continue to steadily increase in the future; on the other hand, the market share of domestic leaders in overseas markets remains relatively low compared to foreign brands like Toyota Automatic Loom Works, indicating substantial room for growth in the medium to long term. In addition, the unit value of forklifts in overseas markets is relatively high, and exported products can achieve higher gross margins, with the overall profitability expected to improve as the proportion of overseas revenue for domestic manufacturers increases.

The main points of Haitong Securities are as follows:

Characteristics of the overseas market: demand for products varies by region, with an emphasis on product quality and after-market service.

Europe, the Americas, and Asia are the main markets for forklifts, with Asia's market growing faster in recent years; the penetration rate of electric forklifts is relatively high in the US and Europe. From the product perspective, European customers value eco-friendliness and operational comfort, American customers prioritize durability, while Asian customers focus on cost-effectiveness. Although the quantity of Class 1 and Class 2 vehicles exported from China is relatively small, it is beginning to enter a rapid development phase.

From the channel perspective, foreign customers pay considerable attention to the economic lifespan of products and prefer to procure forklifts through leasing rather than direct purchase, requiring forklift manufacturers to provide comprehensive services. In terms of competitive landscape, the main brands in the European and Asian markets are regional companies, while the leaders in the Americas are primarily Japanese and local American brands. Foreign enterprises such as Toyota and KION have built a comprehensive value chain through product sales and services. In comparison, there is still substantial room for improvement in the market share of domestic forklifts in high-end markets like Europe and America.

Advantages of Chinese forklifts: the trend towards Lithium Battery is inevitable, and advantages in the Industry Chain facilitate overcoming challenges.

China is a major producer and exporter of Lithium Batteries in the Global market, with its Lithium Battery production capacity accounting for over 70% of the total Global capacity. Battery manufacturers and equipment suppliers have rapidly iterated technology through rich practices and large-scale construction processes, continuously improving engineering capabilities, and forming excellent competitiveness in cost control, equipment production, and equipment precision.

Benefiting from the first-mover advantage of the Lithium Battery Industry Chain, domestic forklift companies such as Anhui Heli Co., Ltd. and Hangcha Group cooperate with leading domestic Lithium Battery manufacturers to ensure the supply capacity of core components through self-research and self-manufacturing, as well as directly purchasing from invested Lithium Battery business companies; methods such as investing in upstream Lithium Battery suppliers are employed to ensure the supply capacity of key components like batteries and Electronic Control assemblies. The application of Lithium Battery forklifts in China has rapidly gained popularity in recent years, with sales of Lithium Battery forklifts increasing from 0.0747 million units in 2019 to 0.3704 million units in 2023, achieving a CAGR of 49.21% from 2017 to 2023, and reaching a Lithium penetration rate of 31.56% in 2023.

It is recommended to pay attention to domestic leaders that actively practice Global Strategy and possess advantages in scale and Lithium Batteries.

1) Anhui Heli Co., Ltd. (600761.SH): The company's international strategy positioning is continuously upgraded, evolving from distribution, distribution + regional center, to "1 China headquarters + N overseas centers + X global teams," increasing the breadth and depth of overseas coverage. As of September 2024, the company's products are sold in over 180 countries and regions, holding the number one market share in over 30 countries and regions worldwide, covering over 95% of the countries and regions along the Belt and Road Initiative Concept. The company's overseas sales and revenue have experienced rapid growth, with complete machine export volume increasing by 21%/30% year-on-year in 2023/2024 H1, and overseas revenue growing by 31.94%/20.52%.

2) Hangcha Group (603298.SH): The company starts from the European and American markets, expanding globally with brand effects + localized deployment. Meanwhile, the company focuses on R&D, manufacturing, and supply chain proximity to local markets and has established a research center in the USA; in 2024, the company announced plans to invest in an assembly factory in Thailand to further enhance its comprehensive competitiveness. The company's overseas revenue has maintained rapid growth, with a CAGR of 16.76% from 2011 to 2023; in 2023, the share of foreign income reached 41%, an increase of 20 percentage points compared to 2011. In the future, the company plans to increase the export business volume to achieve 50% of the total business volume of the Group.

Risk Warning: Risks related to the international trade environment; risks of Exchange Rates fluctuations; intensified industry competition; domestic policies not meeting expectations; the company's overseas expansion slowing down, and new product development not meeting expectations.