Citi’s latest industry analysis highlights a divergence in sector trends, with positive data emerging for AI PCB equipment makers while construction machinery faces headwinds. The bank noted that August revenue for Taiwan’s Leader Electronics (3167.TW) surged 153% year-over-year, marking a new high in its growth trajectory and signaling accelerated demand for AI-driven PCB equipment.

In contrast, data from the China Construction Machinery Association shows domestic excavator shipments in August rose just 4% year-over-year to 7,986 units, marking the second consecutive month of single-digit growth. Citi views this as an early sign of a potential cyclical shift in China’s excavator market. Additionally, tower crane utilization rates reported by Pangyuan, the country’s largest tower crane leasing firm, have declined year-over-year for six straight months since February.

These findings present a mixed outlook for key players. The bank sees the data as positive for AI PCB equipment maker Han's CNC (03200), but negative for construction machinery firms Sany Heavy Industry (06031) and Zoomlion Heavy Industry (01157). Citi also favors Tsugami China (01651), citing solid fundamentals and its inclusion in the Stock Connect program.

Based on Citi’s valuation, the H-share target price for Han's CNC is set at HK$189 with a “Buy” rating, while Sany Heavy Industry’s H-share target is HK$29, also rated “Buy.” Zoomlion carries a target of HK$8.9 with a “Buy” rating, and Tsugami China is rated “Buy/High Risk” with a target of HK$72.

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