Everbright Securities: Excavator Exports Surge in January-February as Policy Support Sustains Industry Recovery

Report Summary

In January-February 2026, domestic sales of excavators faced short-term pressure due to the Chinese New Year holiday, while some non-excavator construction machinery sectors showed signs of recovery.

From January to February 2026, China’s total excavator (including exports) sales reached 35,934 units, a year-on-year increase of 13.1%. Among these, domestic sales were 15,478 units, down 9.2% year-on-year. Certain non-excavator construction machinery sectors showed clear signs of recovery: loader domestic sales increased by 11.5% year-on-year; truck cranes increased by 2.4%; crawler cranes increased by 30.3%.

In January-February 2026, due to the relatively late Chinese New Year holiday, domestic excavator sales were temporarily under pressure. Looking ahead to 2026, we remain optimistic about the continued growth driven by upgrades and replacements in the construction machinery industry. The previous cycle of excavator and other construction machinery sales saw rapid growth from late 2015 to early 2021, peaking in early 2021. Considering the typical lifespan of construction machinery is 8-10 years, we estimate a compound replacement growth rate of about 30% in China for 2026 and subsequent years, which could strongly support future excavator sales. Additionally, a large number of second-hand construction machinery are exported to developing countries, which objectively lowers domestic ownership levels and is an important factor supporting new machine sales.

Strong financial support ensures sustained recovery of domestic demand for construction machinery

In terms of funding, the 2026 government work report proposes an investment of 755 billion yuan from the central budget and 800 billion yuan in ultra-long-term special national bonds for infrastructure projects. It also plans to allocate 200 billion yuan in ultra-long-term bonds to support large-scale equipment upgrades. We believe that equipment renewal is the core driver of this cycle’s recovery. As support funds are gradually allocated, the process of machinery upgrades is expected to continue, further boosting industry recovery. The phased commencement of key projects like hydropower and water conservancy projects is also expected to sustain demand growth, ensuring ongoing domestic industry demand recovery.

Excavator exports surged in January-February 2026, with significant potential for overseas expansion

In January-February 2026, excavator exports reached 20,456 units, up 38.8% year-on-year. The government work report emphasizes further opening-up and strengthening cooperation with Belt and Road countries. Despite challenges posed by changing geopolitical situations in the Middle East, opportunities arise from increased infrastructure and mining machinery demand in Southeast Asia, Africa, and South America, as well as higher penetration rates in high-end European and American markets. As China continues to expand high-level opening-up, leading construction machinery companies are increasing overseas investments, and exports are expected to maintain growth.

Electric loader sales remained high in January-February 2026, accelerating electrification of construction machinery

Electric loader sales reached 5,132 units, a year-on-year increase of 112.7%. The electrification rate reached 24.1%, up 9.6 percentage points from the previous year. The government work report advocates accelerating the elimination of outdated capacity and supporting green and low-carbon technological innovations. We believe green and electric technologies are key future directions for the industry. Domestic manufacturers are leveraging the electric trend to surpass competitors, and the electrification process is expected to accelerate, further increasing revenue and profits for OEMs.

Forklift sales continue to grow, with smart logistics opening new growth opportunities

In January-February 2026, forklift sales totaled 222,641 units, up 14.1% year-on-year. Domestic sales were 132,473 units, up 9.3%; exports reached 90,168 units, up 22.0%. Rapid development of robotics and AI industries has increased the penetration of unmanned forklifts. According to the “Blue Book of the Forklift Industry Development (2024 Edition),” in 2025, China’s unmanned forklift sales reached 39,000 units, a 39.3% increase, but the penetration rate remains only 3.2%, indicating huge market growth potential.

Mining machinery industry remains optimistic, with broad growth prospects for domestic manufacturers

Driven by increased global mining capital expenditure, expansion in emerging markets, and trends toward automation and electrification, the mining machinery industry continues to improve. Revenue and orders for mining equipment remain high. Data shows that in 2025, the global mining machinery market was about $123 billion, expected to grow to $160.3 billion by 2030, with a CAGR of approximately 5.4%. According to the “Top 50 Global Mining Equipment Manufacturers 2025,” the total sales of the top 50 companies reached $76.66 billion, with Chinese companies accounting for $14.72 billion (19.2%). Compared to international giants like Caterpillar and Komatsu, Chinese mining machinery firms still have significant room for growth. We believe mining machinery will be an important growth driver for future construction machinery companies. As global capital expenditure on mining increases, Chinese mining companies expand overseas, and domestic product capabilities improve, China’s market share in mining machinery is expected to rise substantially.

Yarlung Zangbo hydropower project expected to boost construction machinery demand

On July 19, 2025, the groundbreaking ceremony for the Yarlung Zangbo River downstream hydropower project was held in Nyingchi, Tibet. As a mega-scale water conservancy project, it involves a total investment of about 1.2 trillion yuan and is currently the largest planned hydropower station globally. The project adopts a “diversion and straightening, tunnel water diversion” approach, with plans to build five cascade stations, some of which are expected to be operational by 2030, with full completion by 2035. Based on experience from the Three Gorges and other large hydropower projects, total equipment investment is estimated at 10-15% of project costs, i.e., 120-180 billion yuan. Considering the high-altitude construction environment and environmental protection requirements favoring new energy and unmanned equipment, actual demand for construction machinery could be even higher. Major equipment such as large excavators, tunnel boring machines, cranes, and concrete machinery are expected to be the main demand categories, providing sustained support for the industry.

Risk factors: Infrastructure investment may fall short of expectations; overseas exports of construction machinery may underperform; industry price competition could intensify; uncertainties related to US-China tariffs.

(Source: Everbright Securities)