06031 Overview

Market Growth: In January 2023, the shipment volume of tower cranes in Mainland China experienced a 7% year-on-year growth, ending a 30-month decline, attributed to improved market demand following policy changes in the real estate sector.

Stock Predictions: Citi Research anticipates that the positive market developments will boost stock prices for ZOOMLION and SANY HEAVY IND, with ZOOMLION being the top pick due to its significant crane machinery exposure and a target price set at HKD10.2.

Index Review Announcement: The China Securities Index Company and Hang Seng Indexes Company released the half-yearly review results for the Hang Seng CSI Shanghai-Hong Kong AH Smart Index, which includes the largest 50 AH companies under the Shanghai-Hong Kong Stock Connect programme.

Constituent Changes: The index maintains 50 constituent companies, with SANY HEAVY INDUSTRIES and SERES being newly included, while CEA and TSINGTAO BREWERY were excluded.

Future Share Class Determination: The share classes of the companies included in the index will be determined in March 2026, aligning with the monthly share class switching exercise.

Market Data: The report includes short selling data for the excluded companies, indicating significant short selling activity and ratios for both CEA and TSINGTAO BREWERY.

Daiwa's A+H Share Strategy: Daiwa's research indicates that its A+H share valuation premium strategy has performed exceptionally well, with cumulative relative returns increasing from 90% to 107.5% over two months, driven by rising global metal prices and China's construction machinery renewal cycle.

Impact on Specific Stocks: The strategy has notably benefited materials and industrial stocks, including CMOC, ZIJIN MINING, SANY HEAVY IND, and WEICHAI POWER, despite some experiencing short selling pressures.

Foreign Investment Trends: Many overseas investors are showing interest in Chinese tech companies, favoring H-shares due to geopolitical concerns, which may lead to increased foreign capital inflows and a potential rise in H-share prices.

Potential for A-Share Revaluation: As tech companies complete dual listings, their share prices may increase rapidly, creating opportunities for revaluation of A-shares compared to their H-share counterparts.

Strong Demand for Crawler Cranes: In November 2025, shipments of crawler cranes in China surged by 102% year-on-year, driven by equipment replacement needs and strong demand in renewable energy sectors like wind power.

Market Share Decline Among Top Manufacturers: The market share of the top four large excavator manufacturers decreased from 59.7% in 2024 to 58.7% in the first nine months of 2025, indicating increased competition in the Chinese construction machinery market.

Citi's Investment Ratings: Citi maintained its investment ratings for major companies in the construction machinery sector, with JSHL rated as a "Buy" with a target price of RMB 105, and SANY HEAVY IND rated as a "Buy" with a target price of HKD 31.

Short Selling Activity: ZOOMLION experienced short selling of $1.01 million with a ratio of 7.721%, while CONS MACHINERY was rated as a "Sell" with a target price of RMB 2.6.

Record IPO Activity in Hong Kong: In 11M25, 91 companies completed IPOs in the Hong Kong equity market, raising a total of $259.889 billion, marking the first time in four years that HKEX surpassed the $200 billion fundraising threshold and ranking first globally in fundraising amount.

Top Global IPOs: Notable companies among the top ten global IPOs this year include CATL, ZIJIN GOLD INTL, SANY HEAVY IND, and SERES, all contributing significantly to the overall fundraising totals.

SZSE Announcement: The Shenzhen Stock Exchange has made adjustments to the list of securities eligible for the Southbound Stock Connect.

New Additions: SANY HEAVY IND (06031.HK) and CIG (06166.HK) have been added to the list, effective immediately.

Implementation Measures: The changes are based on the "Shenzhen Stock Exchange Southbound Stock Connect Implementation Measures."

Effective Date: The adjustments took effect on the 24th of the month.