2025年政府工作报告显示，今年拟发行超长期特别国债1.3万亿元，比上年增加3000亿元；拟安排地方政府专项债券4.4万亿元、比上年增加5000亿元，将重点用于投资建设、土地收储和收购存量商品房、消化地方政府拖欠企业账款等。① This year's government work report further releases Bullish Signals, supporting "Two Heavy" Construction with greater intensity; ② The order for Construction Machinery-related companies shows signs of recovery after the Spring Festival. This year, with the commencement of several major Infrastructure projects, the order volume for Machinery manufacturers is expected to rise.
According to Caixin on March 5 (Reporter Huang Lu), the order for Construction Machinery in the Industry shows signs of recovery. Many industry insiders informed Caixin reporters that this year's government work report mentioned a stronger support for "Two Heavy" Construction, encouraging and guiding more private capital to participate in major Infrastructure and social welfare construction projects. The policy boost on Infrastructure investment will inject more funds into domestic engineering project commencement.
Infrastructure investment is a vital source of orders for Construction Machinery companies. In the secondary market, the Construction Machinery Sector has demonstrated strong performance recently. Companies like Shantui Construction Machinery (000680.SZ), Guangxi Liugong Machinery (000528.SZ), and Xiamen XGMA Machinery (600815.SH) have reached their daily price limit and closed at top prices today. Meanwhile, ZOOMLION (000157.SZ), Sany Heavy Industry (600031.SH), Jiangsu Hengli Hydraulic (601100.SH), and XCMG Construction Machinery (000425.SZ) are also among those with significant gains.
The government work report for 2025 indicates that this year plans to issue over 1.3 trillion yuan in ultra-long-term special national bonds, an increase of 300 billion yuan compared to last year. It plans to arrange 4.4 trillion yuan in special local government bonds, which is an increase of 500 billion yuan compared to last year. This will focus on investments in construction, land acquisition, purchasing existing properties, and addressing local government debts owed to enterprises.
In 2024, domestic excavator sales in China began to recover. In January 2025, influenced by the Spring Festival, domestic sales experienced a year-on-year decline of only 0.3%. A representative from a main engine factory informed Caixin that project commencement after the Spring Festival is promising, with outstanding domestic sales performance and expectations for good growth in excavators and earth-moving machinery sales in February and March. The last round of excavator and loader replacement cycle ended around 2020, and now old equipment entering a new replacement cycle will promote industry development. New policies mentioned in the government work report can inject funds into domestic Infrastructure and engineering project commencements, especially benefiting companies with high revenue proportions from earth-moving machinery. In addition, infrastructure developments in foreign countries are also bringing numerous opportunities for domestic enterprises.
During a recent institutional survey, XCMG Construction Machinery mentioned that the domestic sales in the industry have shown signs of recovery, especially the sales of earthmoving machinery have achieved positive growth for several months in a row. Recent trends in crawler cranes, mining machinery, and road machinery have also shown good growth. With accelerating natural equipment replacement demand and the impact of new special treasury bonds and long-term treasury projects, the domestic construction machinery industry is gradually entering an upward cycle.
According to today's Construction Machinery data, in February this year, China's Construction Machinery Market Index (CMI) was 106.68, a year-on-year increase of 13.53% and a month-on-month increase of 5.44%, with respective increases of 10.26 and 8.77 percentage points. This indicates that after February, especially following the Spring Festival holiday on February 10, the commencement situation in most domestic market projects has improved, and the gradually warming construction demand has led to an increase in overall equipment operating rates and operating hours.
Feedback from some main engine manufacturers and upstream component manufacturers suggests that since the beginning of this year, domestic orders have rebounded to varying degrees. The peak season for the Industry will arrive from March to May, increasing stock demand for main engine manufacturers, with orders for components like pumps, valves, and motors experiencing a year-on-year increase.
It is understood that after the approval of major Infrastructure project planning, the project enters the bidding stage, generally issuing bidding announcements 3-6 months in advance. Preliminary preparation work such as site leveling and temporary facility construction before the project starts may require some small Construction Machinery. Once the project officially begins, the demand for Construction Machinery will be released in a concentrated manner, and a large number of excavators, loaders, cranes and other equipment will be put into use, with the main machine manufacturers often able to harvest more Orders.
Infrastructure projects drive the demand for equipment upgrades. Zhi Peiyuan, Vice Chairman of the Investment Professional Committee of the China Investment Association for Listed Companies, told reporters from Financial Link that the "Two New" policy in 2024 has significantly stimulated the growth of equipment purchase investments. As we enter 2025, to continue promoting stable economic growth, facilitate industrial upgrades, and expand domestic demand, the government may further intensify policy efforts to effectively release the demand for equipment upgrades and promote growth in Orders for the Construction Machinery Industry.
However, personnel from the main machine manufacturers indicate that there is often a lag of one quarter from the policy launch to seeing effective results, and the extent of future terminal demand release still needs to be observed gradually.
Huo Hongyi, Chairman of Numantola Commercial Strategy Consulting, also told reporters from Financial Link, "Whether the release of equipment upgrade demand can fully translate into order growth for the industry still depends on downstream market demand, corporate financing capabilities, and the order fulfillment cycle. If companies are financially constrained or market demand falls short of expectations, equipment upgrades may just be a stock adjustment and won't bring large-scale new Orders. Therefore, this year, the Construction Machinery market still needs to pay attention to the rhythm of policy implementation and the actual Capital Trend."
Today, after hitting the high near 24,000 in the early session and entering bearish positions, the index fell sharply by nearly over 600 points, immediately recouping yesterday's losses significantly.
Moreover, today it broke the new high again, reaching a maximum of 24,076, but by the end of the market, it fell back by about 70 points, producing a bearish candle. The current trend has not yet been broken, but from the previous low until now, it has risen close to 6,000 points. It is believed that those with positions can continue to hold until there is a clear trend reversal for profit-taking. Those without positions can wait for a pullback to get in. Actually, it is hoped for a quick pullback, as it allows for entry and also provides a healthy breath.
Currently, the outlook remains the same as before. It is believed that even if there is a pullback, it shouldn't be too deep. However, if Futures fail to stabilize and close below 22,350, there may still be room for decline. The chance of Futures falling below 21,400 in the short term should be low, so it is considered that if a significant pullback occurs, it presents a good opportunity to incrementally go long. Recently, there has been a consistent approach to not hold positions overnight, only focusing on immediate trades, as there is no high chasing and no casual short selling.
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