Growth and Cyclical Rebalancing: Recommend Watching Construction Machinery + Rail Transit Equipment + General Equipment - 20260730

English summary

Growth is diverging, cyclical allocation is increasing. We recommend focusing on high-prosperity construction machinery, high-certainty rail transit equipment, and general equipment benefiting from manufacturing recovery. #Construction Machinery: High prosperity. In Jan-Jun 2026, excavator sales were 152,300 units, +26.4% YoY. Among them: domestic sales were 79,000 units, +20.4% YoY; exports were 73,300 units, +33.5% YoY. For four consecutive months from March to June, results exceeded expectations and growth accelerated. We judge that Q3 will see an inflection point for exchange rate impact; core targets: Sany Heavy Industry, XCMG Machinery, Zoomlion Heavy Industry, Zhejiang Dingli, Liugong, Shantui Construction Machinery; component companies: Hengli Hydraulic, Eddie Precision, Fushite, Weiwan Sealing, etc. #Rail Transit Equipment: High certainty. 1) Demand and capital expenditure are steadily rising. In H1, national railways completed passenger volume of 2.348 billion person-trips, +5.0% YoY; freight volume of 2.622 billion tons, +2.5% YoY; fixed asset investment completed 363.2 billion yuan, +2.1% YoY. 2) Aftermarket demand expands. ...