We have received positive feedback on Zoomlion following the publication ofour 2026 capital goods sector outlook and investor call this week. Basedon our understanding, domestic demand for crane and concrete machinerycontinued to see meaningful recovery in Nov, while earth-moving’s growthremained solid. We estimate Zoomlion’s domestic machinery sales growth inOct-Nov to be 20-30% YoY, accelerating from 13% YoY in 3Q25. On theoverseas front, we believe the sales growth has also remained strong in Oct-Nov. We have left our earnings forecast unchanged. Our TP for Zoomlion A/Hare maintained at RMB12.0/HK$9.2, based on 2026E target P/E multiple of18.6x for A-share and 30% discount for H-share. Reiterate BUY.

Mining equipment is a structural growth driver. We highlighted in our2026 outlook report that mining equipment is an attractive area for Chinesemachinery players. Zoomlion’s mining equipment (including miningexcavators, mining trucks and aftermarket services) revenue accounts for6-7% of total revenue at present, and we expect such contribution willincrease to 15% over the coming few years.

Valuation for Zoomlion. Our TP for A-share of RMB12 is based on 18.6xP/E which is equivalent to the five-year average historical P/E of 13.7x plus1SD. Our above-average target multiple is to reflect Zoomlion’s emergingmarket expansion story with a full range of product offerings. Our TP for Hshare(HK$9.2) is based on a 30% H/A discount (based on the historicalaverage).

Key risks: (1) lack of sustainable recovery of non-earth-moving machinerydemand in China; (2) slowdown of overseas demand; (3) decline in miningcapex.