Citi has expressed a preference for Sany Heavy Industry’s H-shares over its A-shares, citing intensifying competition in China’s large excavator market and evolving industry dynamics. In its latest assessment, the brokerage highlighted valuation differences and market exposure as key factors behind its stance.
According to Citi, competition in the large excavator segment is increasing as domestic and global manufacturers expand capacity and aggressively target market share. This heightened rivalry is putting pressure on pricing and margins, prompting a more selective approach toward construction equipment stocks operating in China’s mature segments.
Citi noted that while Sany remains a strong industry player with solid engineering capabilities and a diversified product portfolio, near-term challenges in the domestic market could impact performance. In this context, the brokerage believes H-shares offer relatively better risk-reward positioning compared to A-shares, supported by more attractive valuations and greater access to international investors.
The report also pointed out that overseas demand, export growth, and operational efficiency will be critical for equipment makers navigating a competitive Chinese market. Companies that can balance domestic pressures with global expansion are expected to perform better over the medium term.
Overall, Citi’s preference reflects cautious optimism—backing Sany’s strengths while acknowledging rising competitive intensity in China’s construction machinery landscape.
