Equipment Manufacturing Sector Weekly Report

Date: December 1, 2025
Analysts: Zhao Xiaochuang (S1030511010004), Yang Guizhou (S1030524060001)
Research Assistant: Dong Liyanan

Executive Summary

The Chinese equipment manufacturing sector demonstrated resilient performance in the fourth week of November 2025, outperforming the broader market benchmark. The Machinery, Power Equipment, and Automotive sectors recorded weekly gains of 2.47%, 2.23%, and 2.01% respectively, ranking 8th, 10th, and 11th among the 31 Shenwan Level-1 industries. In contrast, the CSI 300 Index rose by a more modest 1.64% during the same period. This relative outperformance underscores sustained investor interest in high-end manufacturing, energy transition infrastructure, and automotive innovation, despite macroeconomic headwinds.

This report provides a comprehensive analysis of four critical sub-sectors: Photovoltaic (PV) Inverters, Industrial Gases, Automotive, and emerging themes in Robotics and Energy Storage. Our core investment thesis rests on three pillars:

1. Structural Growth in PV Exports: The PV inverter sector is transitioning from pure scale expansion to "quality globalization." October 2025 data reveals a robust 6.4% year-over-year (YoY) growth in cumulative exports, driven significantly by policy-induced demand in Australia and steady uptake in emerging markets. Leading enterprises with strong technical moats and global service networks are poised to capture disproportionate value.
2. Bottoming Out in Industrial Gases: While overall demand remains tepid heading into the traditional off-season, specific segments like liquid argon have shown significant price resilience (+23.79% MoM in November). The industry is currently navigating an "anti-involution" phase, suggesting a structural bottom. We recommend focusing on industry leaders such as Hangyang Shares and Shaanxi Blower, who are better positioned to withstand pricing pressures and benefit from long-term capacity optimization.
3. Policy-Driven Automotive Resilience: Although weekly retail sales showed a slight YoY decline due to high base effects and tightening subsidy policies, month-on-month recovery is evident. The impending adjustment to electric vehicle (EV) purchase tax policies in 2026 is expected to catalyze year-end consumption. We maintain a positive outlook on整车 (OEMs) with strong brand equity, robust new product cycles, and scale efficiencies.

Furthermore, significant developments in humanoid robotics and energy storage highlight the rapid commercialization of next-generation technologies. Notable milestones include UBTECH’s substantial CNY 264 million contract for humanoid robots in border security and industrial inspection, and Jereh Group’s USD 100 million+ order for gas turbine generator sets in North American data centers. These events signal that the "new quality productive forces" narrative is translating into tangible revenue streams.

Investors should remain cognizant of risks including macroeconomic volatility, potential shifts in industrial policy, and intensifying competitive dynamics. However, the current valuation levels, combined with clear visibility into export-driven growth and domestic policy support, present a compelling risk-reward profile for selective exposure to the equipment manufacturing sector.

Key Takeaways

1. Photovoltaic Inverters: Export Momentum and Geographic Diversification

The global demand for solar energy continues to underpin strong export performance for Chinese inverter manufacturers. According to China Customs data, the total value of inverter exports reached USD 680 million in October 2025. For the first ten months of 2025, cumulative exports totaled USD 7.44 billion, representing a 6.4% YoY increase. This growth trajectory confirms the sector's resilience amidst global trade uncertainties and highlights the effectiveness of Chinese manufacturers in diversifying their geographic footprint.

The Australian Catalyst

A standout feature of the October data was the exceptional performance in the Australian market. Exports to Australia amounted to approximately USD 58 million, surging by over 200% YoY. This spike is directly attributable to the Australian government’s AUD 2.3 billion household energy storage subsidy plan, which officially commenced on July 1, 2025. Since July, Chinese inverter exports to Australia have recorded consecutive months of high double-digit YoY growth. This policy-driven demand underscores the importance of regulatory frameworks in shaping short-to-medium-term export dynamics. It also validates the strategic positioning of Chinese firms that have established strong distribution channels and brand recognition in mature markets like Australia.

Shift from "Scale" to "Quality"

The industry is undergoing a fundamental transformation. The era of indiscriminate scale expansion is giving way to a phase characterized by "quality going global" (Zhiliang Chuhai). Key drivers of this shift include:
* Technological Superiority: Higher efficiency rates, better grid compatibility, and advanced smart monitoring capabilities are becoming standard requirements in European and North American markets.
* Brand Equity: Established brands are commanding premium pricing and enjoying higher customer loyalty, reducing sensitivity to price wars.
* Global Service Networks: The ability to provide localized after-sales support, maintenance, and rapid response to technical issues is increasingly a decisive factor for utility-scale and commercial clients.

Consequently, leading enterprises that possess integrated capabilities in technology, branding, and global service are expected to consolidate market share and improve margin profiles. Emerging markets, particularly in Southeast Asia, the Middle East, and Latin America, are also becoming core growth engines, offering diversified revenue streams that mitigate reliance on any single region.

2. Industrial Gases: Price Dynamics and Sector Bottoming

The industrial gas sector exhibited mixed performance in November 2025, with notable divergence between bulk gases and rare gases. The market is currently in a consolidation phase, characterized by weak overall demand but signs of stabilization in specific segments.

Bulk Gas Price Trends (November 2025)

Data from Zhuochuang Information reveals the following price movements for key bulk gases as of November 26, 2025:

The significant surge in liquid argon prices is the most notable development. This increase is likely driven by reduced output from steel mills (a primary by-product source of argon) due to environmental restrictions or maintenance schedules, coupled with steady demand from welding and electronics manufacturing. In contrast, liquid oxygen and nitrogen prices remained relatively stable, reflecting balanced supply-demand dynamics in general industrial applications.

Rare Gases: Continued Softness

The rare gas segment continued to face downward pressure. Prices for high-purity helium, xenon, krypton, and neon remained flat month-on-month but declined year-on-year:
* High-Purity Helium (Bundle): CNY 97.23/cubic meter
* Xenon: CNY 22,700/cubic meter
* Krypton: CNY 215/cubic meter
* Neon: CNY 110/cubic meter

The persistent YoY decline in rare gases reflects the normalization of prices following the supply shocks of previous years and subdued demand from the semiconductor and display panel industries.

Outlook and Investment Implication

Looking ahead to December and January, the sector faces typical seasonal headwinds. The period surrounding the Lunar New Year is traditionally a slow season for industrial activity, leading to weaker demand. Consequently, we anticipate that overall gas prices will find it difficult to rise and may even face downward pressure ("hard to rise, easy to fall").

However, the broader narrative is one of sector bottoming. The industry is actively engaging in "anti-involution" (Fan Neijuan), where major players are prioritizing profitability and cash flow over market share gains through aggressive price cutting. This disciplined approach is helping to stabilize the market floor. We advise investors to focus on industry leaders with integrated air separation units (ASUs) and diverse customer bases, such as Hangyang Shares and Shaanxi Blower. These companies are better equipped to navigate price volatility and benefit from long-term contracts that provide revenue visibility.

3. Automotive Sector: Navigating Policy Shifts and Year-End Demand

The automotive sector presented a nuanced picture in the third week of November 2025. According to the China Passenger Car Association (CPCA), daily retail sales of passenger vehicles averaged 71,000 units. This figure represents a 7% YoY decline but a 7% month-on-month (MoM) increase compared to the same period in October.

Analyzing the YoY Decline

The 7% YoY decrease should not be interpreted as a deterioration in underlying demand. Instead, it is primarily a function of:
1. High Base Effect: November 2024 was an exceptionally strong month for auto sales, driven by aggressive promotional campaigns and early implementation of trade-in subsidies. Comparing against this elevated baseline naturally results in a statistical decline.
2. Policy Tightening: Since October, several regions have tightened the criteria for "trade-in" and "scrappage" subsidies. This administrative friction has temporarily dampened consumer enthusiasm, as buyers adjust to the new requirements or delay purchases in anticipation of further clarity.

The Month-on-Month Recovery and Year-End Catalyst

Despite the YoY dip, the 7% MoM growth indicates that demand is recovering sequentially. More importantly, a significant policy catalyst is on the horizon. Starting in 2026, the purchase tax exemption for new energy vehicles (NEVs) will be halved. This impending change is expected to trigger a "rush to buy" effect in December 2025, as consumers seek to lock in the full tax benefit before it expires.

We therefore maintain a constructive view on the automotive sector for the remainder of the year. The combination of sequential recovery and policy-induced urgency should support robust sales volumes in December. Investors should focus on OEMs that possess:
* Strong Brand Equity: Brands that can command loyalty and pricing power.
* Compelling New Product Cycles: Launches of new models, particularly in the NEV segment, that align with current consumer preferences for smart connectivity and autonomous driving features.
* Scale Efficiencies: Manufacturers that can leverage volume to reduce unit costs and maintain margins amidst competitive pricing environments.

4. Emerging Themes: Robotics and Energy Storage Commercialization

Beyond traditional sectors, significant progress in humanoid robotics and energy storage highlights the rapid maturation of high-tech manufacturing.

Humanoid Robots: From Prototype to Paid Deployment

The sector witnessed two major developments confirming the transition from R&D to commercial application:
* UBTECH (09880.HK): On November 21, UBTECH won a bid for the "Fangchenggang Humanoid Robot Data Collection and Testing Center and AI Science Education Demonstration Project" in Guangxi, with a contract value of CNY 264 million. The project utilizes the latest Walker S2 industrial humanoid robots, capable of autonomous battery swapping. These robots will be deployed for border passenger screening, sentinel patrol, logistics, and facility inspection in large-scale manufacturing bases (steel, copper, aluminum). Delivery is scheduled for December 2025. Crucially, UBTECH reported that total orders for its Walker series humanoid robots in 2025 have reached CNY 1.1 billion (excluding research/education models), solidifying its position as a global leader in commercializing humanoid robotics.
* LimX Dynamics: On November 28, LimX Dynamics released video footage of its full-size humanoid robot, LimX Oli, navigating complex, unstructured terrain at a construction site. The robot demonstrated high-dynamic, continuous, and stable walking over soft sand, uneven stones, shaky planks, and debris. With 31 degrees of freedom and a height of 165 cm, Oli’s performance showcases advanced anti-disturbance capabilities and human-like gait control, indicating rapid technological progress in mobility and adaptability.
* Yiheda (301029.SZ): The company confirmed it supplies linear motion parts and small mechanical components to humanoid robot manufacturers, although this currently constitutes a low proportion of its total revenue. This highlights the broader supply chain opportunities emerging alongside OEM advancements.

Energy Storage and Power Equipment: Global Demand Surge

• National Development and Reform Commission (NDRC): On November 27, the NDRC highlighted that China’s new energy storage installed capacity has exceeded 100 million kilowatts (100 GW), which is more than 30 times the level at the end of the 13th Five-Year Plan. This accounts for over 40% of the global total. Technologies such as large-scale compressed air storage, high-safety chemical storage, and solid-state batteries are seeing active demonstration and deployment.
• Jereh Group (002353.SZ): In a conference call on November 27, Jereh announced it has secured a sales order for gas turbine generator sets for North American data centers, with a contract value exceeding USD 100 million. The company has built a highly integrated, modular, and intelligent gas power generation product portfolio, supported by strategic partnerships with Siemens and Baker Hughes. This order underscores the surging global demand for reliable, scalable power solutions driven by the AI and data center boom.
• Dfdou (002407.SZ): On November 29, Dfdou stated it has laid out polymer/gel solid-state battery systems and developed new fluorinated polymer electrolytes. Leveraging existing production lines, the company now has the capability to produce and install these batteries, marking a significant step in the commercialization of next-generation battery technology.

Policy Support for Green Transition

• Beijing’s 15th Five-Year Plan Suggestions: Released on November 26, the plan emphasizes strict control of fossil energy, expanded use of local renewables (PV, geothermal), and the development of hydrogen energy. It aims to increase the proportion of green electricity entering Beijing and promote zero-carbon factories and parks.
• Consumption Stimulus: Six ministries, including the MIIT, issued a plan on November 26 to enhance the adaptability of consumer goods supply. This includes expanding low-altitude economy consumption (drones, private flying) and automotive aftermarket services (modification, camping, racing), providing additional tailwinds for specialized equipment manufacturers.

Market Performance Review

Sector Indices Performance (Nov 24 – Nov 28, 2025)

The equipment manufacturing sectors outperformed the broader market, reflecting investor confidence in the industry's fundamentals and policy support.

Source: Wind Info, Century Securities Research Institute

Sub-Sector Performance

Within the broader categories, performance varied based on specific thematic drivers:

Top Performing Sub-Sectors:
* Other Power Equipment: +4.52% (Driven by grid modernization and export optimism)
* Wind Power Equipment: +3.76% (Benefiting from offshore wind project accelerations)
* Auto Services: +2.86% (Reflecting growth in aftermarket and maintenance sectors)

Lagging Sub-Sectors:
* Rail Transit Equipment: +0.21% (Limited catalysts in the short term)
* Commercial Vehicles: +0.88% (Slower recovery in logistics freight demand)
* Passenger Cars: +1.17% (Despite the weekly gain, it lagged behind other auto sub-sectors due to the aforementioned YoY comparison issues)

Individual Stock Movements

Top Gainers (Nov 24 – Nov 28, 2025)

Machinery Sector:
1. Green Island Wind (301043.SZ): +35.45% | P/E (TTM): 38.3 | P/B: 3.9
* Sector: Refrigeration & AC Equipment. Likely driven by specific project wins or thermal management themes.
2. Aerospace Power (600343.SH): +24.17% | P/E (TTM): (71.2) | P/B: 11.2
* Sector: Other General Equipment. Volatile earnings profile but strong thematic appeal.
3. Tianyi New Materials (688033.SH): +23.77% | P/E (TTM): (3.0) | P/B: 1.2
* Sector: Rail Transit Equipment III.
4. New Star (300509.SZ): +23.73% | P/E (TTM): 41.7 | P/B: 6.6
* Sector: Printing & Packaging Machinery.
5. Bojie Shares (002975.SZ): +19.34% | P/E (TTM): 101.1 | P/B: 5.7
* Sector: Industrial Control Equipment.

Power Equipment Sector:
1. Haike Xinyuan (301292.SZ): +38.51% | P/E (TTM): (99.0) | P/B: 6.6
* Sector: Battery Chemicals. High volatility associated with lithium material pricing expectations.
2. One Stone (688733.SH): +26.88% | P/E (TTM): (395.6) | P/B: 3.0
* Sector: Battery Chemicals.
3. Huasheng Lithium (688353.SH): +24.58% | P/E (TTM): 0.0 | P/B: 0.0
* Sector: Battery Chemicals.
4. Ou Lutong (300870.SZ): +23.91% | P/E (TTM): 69.0 | P/B: 8.7
* Sector: Other Power Equipment III. Benefiting from server power supply demand.
5. Mingguan New Materials (688560.SH): +21.93% | P/E (TTM): (27.2) | P/B: 1.3
* Sector: PV Auxiliary Materials.

Automotive Sector:
1. Tianpu Shares (605255.SH): +35.35% | P/E (TTM): 605.9 | P/B: 24.4
* Sector: Chassis & Engine Systems.
2. Chaojie Shares (301005.SZ): +33.46% | P/E (TTM): 657.7 | P/B: 11.6
* Sector: Other Auto Parts.
3. Fusai Technology (301529.SZ): +22.02% | P/E (TTM): 39.4 | P/B: 4.4
* Sector: Body Accessories & Trim.
4. Silin Shares (301550.SZ): +19.16% | P/E (TTM): 128.2 | P/B: 13.5
* Sector: Chassis & Engine Systems.
5. Biaobang Shares (301181.SZ): +19.07% | P/E (TTM): 0.0 | P/B: 0.0
* Sector: Other Auto Parts.

Note: Negative P/E ratios indicate net losses in the trailing twelve months. Zero values may indicate data unavailability or specific accounting treatments.

Top Losers (Nov 24 – Nov 28, 2025)

Machinery Sector:
1. Intelligent Self-Control (002877.SZ): -13.80%
2. Haimuxing (688559.SH): -8.12%
3. Kunchuan Intelligent (301311.SZ): -6.01%
4. Lanshi Heavy Equipment (603169.SH): -5.94%
5. Haichuan Intelligent (300720.SZ): -5.78%

Power Equipment Sector:
1. Dexin Technology (603032.SH): -9.93%
2. Jiangte Motor (002176.SZ): -8.70%
3. Meishuo Technology (301295.SZ): -7.86%
4. ST Mubang (603398.SH):* -7.74%
5. Rifeng Shares (002953.SZ):** -7.50%

Automotive Sector:
1. Huada Technology (603358.SH): -12.28%
2. Yingli Auto (601279.SH): -10.92%
3. Haima Auto (000572.SZ): -8.99%
4. Dengyun Shares (002715.SZ): -8.39%
5. Aolian Electronics (300585.SZ): -5.61%

The divergence between top gainers and losers highlights the stock-specific nature of current market dynamics, where thematic catalysts (such as AI power supplies, humanoid robots, or specific export wins) drive outsized returns, while companies facing operational challenges or sector-specific headwinds experience corrections.

Industry News and Corporate Announcements

Key Industry Developments

1. Humanoid Robot Advancements (LimX Dynamics):
   On November 28, LimX Dynamics released video evidence of its LimX Oli humanoid robot successfully navigating complex, unstructured construction site terrain. The robot demonstrated high-dynamic stability and human-like gait control while traversing soft sand, uneven stones, and shaky planks. This technological milestone reinforces the viability of humanoid robots for real-world industrial applications beyond controlled laboratory environments.

2. National Energy Storage Milestone (NDRC):
   On November 27, the National Development and Reform Commission (NDRC) announced that China’s new energy storage installed capacity has surpassed 100 GW, representing a 30-fold increase since the end of the 13th Five-Year Plan and accounting for over 40% of the global total. The commission emphasized the critical role of energy storage and hydrogen in building a new power system, highlighting progress in compressed air, chemical, and solid-state battery technologies.

3. Beijing’s Green Energy Blueprint:
   On November 26, Beijing released suggestions for its 15th Five-Year Plan, committing to strict carbon emission controls, the expansion of local renewable energy (PV, geothermal), and the development of hydrogen. The plan aims to increase green electricity imports, promote zero-carbon industrial parks, and enhance the city’s climate adaptation capabilities. This policy framework provides long-term visibility for clean energy equipment providers operating in the capital region.

4. Consumption Stimulus for Low-Altitude and Auto Aftermarket:
   Six ministries, including the Ministry of Industry and Information Technology (MIIT), issued a plan on November 26 to boost consumption by expanding supply in niche sectors. Key areas include low-altitude tourism and consumer drones, as well as automotive aftermarket services such as modification, RV camping, and racing. This policy supports diversified revenue streams for equipment manufacturers in these specialized niches.

5. Foreign Institutional Buying (Sany Heavy Industry):
   On November 21, Schroders PLC increased its stake in Sany Heavy Industry (06031.HK) by 709,600 shares at an average price of HKD 22.40, raising its holding to 8.07%. This move signals continued confidence from international institutional investors in the long-term prospects of China’s heavy machinery leaders, particularly those with strong overseas exposure.

Significant Corporate Announcements

1. UBTECH (09880.HK) – Major Humanoid Robot Contract:
   UBTECH secured a CNY 264 million contract for the Fangchenggang Humanoid Robot Data Collection and Testing Center. The project involves deploying Walker S2 industrial humanoid robots for border security, logistics, and industrial inspection. With total 2025 orders for the Walker series reaching CNY 1.1 billion, UBTECH is demonstrating clear leadership in the commercialization of humanoid robotics. Delivery is expected in December 2025.

2. Jereh Group (002353.SZ) – North American Data Center Order:
   Jereh announced a sales order exceeding USD 100 million for gas turbine generator sets destined for North American data centers. The company has established a strategic partnership with Baker Hughes to secure core component supplies, complementing its existing collaboration with Siemens. This order validates Jereh’s ability to compete in high-end global power equipment markets and capitalizes on the surging demand for reliable power in the AI era.

3. Dfdou (002407.SZ) – Solid-State Battery Capability:
   Dfdou confirmed on its interactive platform that it has developed novel fluorinated polymer electrolytes for solid-state batteries and possesses the production capacity to install these batteries in vehicles using its existing lines. This announcement positions Dfdou at the forefront of the next-generation battery technology race, potentially unlocking new valuation multiples as solid-state batteries move closer to mass adoption.

4. Yiheda (301029.SZ) – Robotics Supply Chain Role:
   Yiheda clarified that it supplies linear motion parts and small mechanical components to humanoid robot manufacturers. While the revenue contribution is currently low, the company’s role as a one-stop procurement platform for non-standard automation parts positions it well to benefit from the scaling of the robotics industry across multiple sectors (3C, lithium, auto, PV, semiconductors).

5. Changrong Shares (300195.SZ) – PV Project Approval:
   The subsidiary Gansu Jianrong received investment credit filing certificates for two 50MW PV projects in Jinchang, Gansu. This regulatory approval is a key milestone for the company’s new energy business, although construction timelines and financing details remain subject to uncertainty. Successful implementation will contribute positively to future operating performance.

Risks / Headwinds

While the outlook for the equipment manufacturing sector is generally positive, investors must carefully consider the following risks:

1. Macroeconomic Volatility

Global economic growth remains uneven. A slowdown in major economies such as the United States or the Eurozone could dampen demand for capital goods and consumer durables, including automobiles and industrial machinery. Domestically, if China’s economic recovery loses momentum, industrial capex and consumer confidence may weaken, impacting order books and sales volumes.

2. Industrial Policy and Trade Barriers

The equipment manufacturing sector, particularly PV inverters and electric vehicles, is sensitive to geopolitical tensions and trade policies.
* Tariffs and Restrictions: Potential increases in tariffs or non-tariff barriers in key export markets (e.g., EU, US, India) could erode profit margins and restrict market access for Chinese manufacturers.
* Subsidy Changes: Domestic subsidies for NEVs and home energy storage are subject to policy adjustments. As seen in the automotive sector, tightening of subsidy criteria can cause short-term demand fluctuations. The phased reduction of NEV purchase tax exemptions in 2026, while a short-term catalyst, may lead to a demand trough in early 2027 if not managed effectively.

3. Intensifying Industry Competition ("Involution")

Despite efforts towards "anti-involution," competition in sectors like lithium batteries, PV components, and industrial gases remains fierce.
* Price Wars: Aggressive pricing strategies to gain market share can compress gross margins, affecting profitability even if revenues grow.
* Overcapacity: In certain segments, such as lithium battery materials and standard industrial gases, overcapacity may persist, leading to prolonged periods of low prices and reduced return on invested capital (ROIC).

4. Technological Disruption and Execution Risk

• Robotics: While the commercialization of humanoid robots is progressing, the technology is still in its early stages. Issues related to reliability, cost-effectiveness, and scalability could delay widespread adoption. Companies investing heavily in R&D may face execution risks if product launches are delayed or fail to meet performance expectations.
• Solid-State Batteries: The transition to solid-state batteries involves significant technical hurdles. Delays in mass production or failure to achieve cost parity with liquid electrolyte batteries could impact the competitive positioning of companies like Dfdou.

5. Raw Material Price Fluctuations

Volatility in the prices of key raw materials such as lithium, copper, aluminum, and rare earth metals can impact manufacturing costs. While some companies have pass-through mechanisms, sudden spikes in input costs can squeeze margins if not fully hedged or passed on to customers.

Rating / Sector Outlook

Sector Outlook: Overweight (Selective)

We maintain an Overweight rating on the Equipment Manufacturing sector, with a preference for companies demonstrating strong export capabilities, technological leadership, and exposure to high-growth themes such as humanoid robotics and energy storage.

• Photovoltaic Inverters: Positive. The shift towards quality exports and the diversification into emerging markets and policy-driven regions like Australia provide a stable growth trajectory. Leaders with strong brands and service networks are preferred.
• Industrial Gases: Neutral to Positive. The sector is bottoming out. While short-term price pressure exists due to seasonal factors, the long-term consolidation and "anti-involution" trends favor market leaders. We recommend accumulating positions in high-quality names like Hangyang Shares during dips.
• Automotive: Positive. The year-end rush driven by tax policy changes and sequential recovery supports near-term sales. Focus on OEMs with strong product cycles and cost advantages.
• Robotics & New Energy Tech: High Growth/Speculative. The commercial breakthroughs by UBTECH and Jereh validate the investment thesis. However, valuations may already reflect some of this optimism. Investors should monitor order execution and margin realization closely.

Recommended Investment Themes

1. "Quality Going Global": Companies with proven success in exporting high-value-added equipment (inverters, construction machinery, power generators) to diverse global markets.
2. New Quality Productive Forces: Leaders in humanoid robotics, solid-state batteries, and advanced energy storage systems that are transitioning from R&D to commercial revenue.
3. Policy Beneficiaries: Firms positioned to benefit from domestic green energy initiatives (Beijing’s 15th Five-Year Plan) and consumption stimulus measures (low-altitude economy, auto aftermarket).

Investment View

The equipment manufacturing sector stands at a pivotal juncture, characterized by the convergence of cyclical recovery, structural transformation, and technological innovation. The data from November 2025 provides compelling evidence that Chinese manufacturers are successfully navigating the transition from domestic-centric, scale-driven growth to global, quality-led expansion.

Strategic Allocation Recommendations:

1. Core Holdings in Export Leaders:
   Investors should establish core positions in leading PV inverter and machinery companies with robust overseas revenue streams. The consistent growth in inverter exports, particularly the surge in Australia, demonstrates the resilience of these businesses against domestic saturation. Look for companies with high gross margins in international markets and strong balance sheets.

2. Satellite Positions in High-Growth Tech:
   Allocate a portion of the portfolio to high-growth themes such as humanoid robotics and solid-state batteries. Companies like UBTECH and Dfdou are pioneering new markets. While these investments carry higher volatility, the potential for exponential growth as these technologies scale is significant. Monitor quarterly order books and delivery metrics to gauge commercial traction.

3. Value Plays in Consolidating Industries:
   In sectors like industrial gases, where growth is slower but stability is improving, focus on industry consolidators. Hangyang Shares and Shaanxi Blower offer defensive characteristics with upside potential from market share gains and operational efficiency improvements. These stocks can serve as stabilizers in a portfolio exposed to higher-beta tech names.

4. Tactical Trading on Automotive Policy:
   The automotive sector offers a tactical opportunity around the year-end. The anticipated rush in NEV sales before the 2026 tax change creates a short-term catalyst. Investors may consider trading ranges around major OEMs with strong NEV portfolios, taking profits as the year-end peak approaches and reassessing positions in early 2026 based on actual sales data and policy implementation.

Conclusion:

The November 2025 data reinforces our conviction that the Chinese equipment manufacturing sector is evolving into a more sophisticated, globally competitive industry. The combination of steady export growth, policy-supported domestic demand, and breakthroughs in frontier technologies creates a multi-layered investment opportunity. By focusing on quality, innovation, and global reach, investors can capitalize on the sector’s long-term structural trends while managing short-term cyclical risks. We recommend a balanced approach, combining stable exporters with high-growth tech innovators, to optimize risk-adjusted returns in the coming quarters.

Disclaimer: This report is prepared by Century Securities Co., Ltd. for informational purposes only and does not constitute an offer to sell or a solicitation of an offer to buy any securities. The information contained herein is based on sources believed to be reliable, but Century Securities does not guarantee its accuracy or completeness. Investors should conduct their own independent research and consult with financial advisors before making investment decisions. Past performance is not indicative of future results.