In September, the domestic excavator operating index was 95.3 hours, a year-on-year increase of 6.9%. In September 2024, the number of operating hours of Komatsu excavators in China increased by 6.9% year-on-year; In August 2024, the number of operating hours of Komatsu excavators in China was 93.0 hours, a year-on-year increase of 3.3%, and the number of operating hours increased year-on-year for two consecutive months. In September 2024, 15,831 excavators of various types were sold, a year-on-year increase of 10.8%. Among them, domestic sales were 7,610 units, a year-on-year increase of 21.5%, higher than the previous CME expectations. The domestic market was adjusted by counter-cyclical policies, and the impulse market bottomed out at the end of the quarter, and the export market gradually recovered. The long-term logic of the industry (1) the recovery of domestic demand, (2) the update cycle, and (3) the improvement of overseas competitiveness have not changed, and we are optimistic about the long-term development of the industry. It is recommended to pay attention to: XCMG Machinery (000425. SZ), Sany Heavy Industry Co., Ltd. (600031. SH), Zoomlion (000157. SZ）。

The roller screw supplier plans to build a new base, and the mass production of humanoid robots is approaching. On October 14, 2024, Beite Technology announced that it plans to invest 1.85 billion yuan to build a planetary roller screw project to help the company's robot-related technologies and products land and achieve commercialization and large-scale production. The current industrial development presents: 1) there are many participants, and many leading companies are involved in the layout; 2) The whole machine products cooperate with downstream factories to jointly promote the landing of products; 3) The whole machine factory mostly cooperates with large models, and AI+ has become a development trend. In the medium and long term, the trend of the industry towards industrialization, commercialization and large-scale development has not changed, and the scientific and technological attributes of the sector are strong and the callback is sufficient during the year, with high flexibility. It is recommended to pay attention to: Sanhua Intelligent Control (002050. SZ), Wuzhou New Year (603667. SH), green harmonics (688017. SH), Leisai Intelligent (002979. SZ), Best (300580. SZ), Keli Sensing (603662. SH）。

In the context of policy combinations, the pro-cyclical "industrial machine" sector is expected to accelerate its recovery. On September 6, 2024, the mobilization and launching ceremony of the "Industrial Machine Tool +" production and demand docking deployment of hundreds of enterprises was held in Changzhou City, Jiangsu Province. This event is expected to continue to carry out a series of activities for precise docking of production and demand, promote the promotion and application of innovative products of industrial machine tools, and promote the integration and development of industrial machine tool industry chain enterprises. Industrial machine tools are strategic and basic industries related to national security and development. China's industrial machine tool industry has formed a complete industrial system, but there is still a distance from the international advanced level in terms of high-end technology and industrial chain support. Recently, the policy direction has been further expanded, from tax incentives to production and demand docking. On August 6, 2024, the State-owned Assets Supervision and Administration Commission (SASAC) issued the "Guiding Opinions on Standardizing the Procurement Management of Central Enterprises", pointing out that central enterprises should take the lead in using innovative products in key areas of scientific and technological innovation such as satellite navigation, chips, high-end CNC machine tools, and industrial robots. Under the background of strong policy support, China's machine tool application scenarios have been further opened, and the process of domestic substitution is expected to accelerate; Combined with large-scale equipment updates, the pro-cyclical "industrial machine tool" sector is expected to accelerate recovery. It is recommended to pay attention to: Huazhong CNC (300161. SZ), Neway CNC (688697. SH), Haitian Precision (601882. SH), Halma Technology (002595. SZ), Ou Keyi (688308. SH) and so on.

The policy supports the participation of private capital in railway construction, which is expected to stimulate the vitality of the industry. On October 8, 2024, the National Development and Reform Commission (NDRC) introduced the relevant situation of "systematically implementing a package of incremental policies to solidly promote the optimization of the upward structure of the economy and the continuous improvement of the development trend". "The participation of private capital in the construction of railways is expected to stimulate the vitality of the industry. From a policy perspective: On July 18, 2024, the Ministry of Transport and other thirteen departments issued a notice on the issuance of the "Action Plan for Large-scale Equipment Renewal of Transportation", pointing out seven major renewal actions and pointing out that 2028 is the time node for the main goal to be achieved. From the perspective of investment: in 2023, the national railway will complete the investment in fixed assets of 764.5 billion yuan, a year-on-year increase of 7.5%, and the total investment is expected to reach 839.9 billion yuan in 2024. From the perspective of demand: On August 16, 2024, China Railway issued the second batch of advanced repair bidding, with a relatively high proportion of five-level repairs, and rail transit equipment entered the maintenance cycle. The recent increase in the industry is relatively small, and the policy promotes the release of renewal demand, and the valuation center of the industry is expected to move up. Attention: CRRC (601766. SH), China Railway Industry (600528.SH), China General Number (688009.SH), Jinxi Axle (600495. SH) and so on.

The National Standing Committee approved five nuclear power projects, focusing on long-term investment opportunities in nuclear power equipment. On August 19, 2024, after deliberation at the executive meeting of the State Council, it was decided to approve five nuclear power projects, including the first phase of the Xuwei project in Jiangsu. The five nuclear power projects approved this time include the first phase of the Jiangsu Xuwei project of CNNC, the first phase of the Guangdong Lufeng project of CGNPC, the first phase of the Shandong Zhaoyuan project, the second phase of the Zhejiang Sanao project, and the first phase of the Guangxi Bailong project of the State Power Investment Corporation, with a total of 11 units. From 2019 to 2024, the number of approved nuclear power units in China will be 6, 4, 5, 10, 10, and 11 respectively, and nuclear power will enter a normal development. Subsequently, as the project progresses, the orders of equipment manufacturers will be gradually delivered, and the performance will be gradually confirmed. You can pay attention to: Jiadian shares (000922. SZ), China Nuclear Science and Technology Co., Ltd. (000777. SZ), Jingye Intelligent (688290.SH), Jiangsu Shentong (002438.SZ), Kexin Electromechanical (300092.SZ), Lanshi Heavy Equipment (603169.SH), etc.

Risk warning: macroeconomic prosperity is less than expected, fixed asset investment is less than expected, raw material price increase risk, industry and market competition risk, industrial policy change risk, third-party data error risk, etc.