GF Securities: The heavy truck industry is still in an upward cycle, and profits are expected to follow a record high in sales

The Zhitong Finance App learned that GF Securities released a research report saying that the heavy truck industry is still in an upward cycle. Under the continuation of the 26-year trade-in policy, the domestic heavy truck industry has remained stable, and the growth in heavy truck exports continues to drive the industry upward. Considering that truck stocks are currently generally undervalued, future profits are expected to follow record sales highs, and the investment value of truck stocks has not yet been fully exploited.

The main views of GF Securities are as follows:

Sales volume: Heavy truck wholesale, terminals, and exports in May were +23.3%, +19.4%, and +20.8%, respectively

According to the China Automobile Association, wholesale sales of heavy trucks in May were 109,000 units, +23.3% year-on-year and -6.4% month-on-month; cumulative wholesale sales of heavy trucks in January-May '26 were 544,000 units, +23.3% year-on-year. According to Jiaotong Insurance, heavy truck terminal sales in May were 75,000 units, +19.4% year-on-year, and -18.5% month-on-month: The cumulative sales volume of heavy truck terminals in January-May '26 was 332,000 units, +16.3% year-on-year. According to the General Administration of Customs, 41,000 heavy trucks were exported in May, +20.8% year-on-year and -4.3% month-on-month; a total of 201,000 heavy trucks were exported in January-May '26, +42.3% year-on-year. Among them, 41,000 heavy trucks were exported outside of Russia in May, +20.9% year-on-year and -4.6% month-on-month; in January-May '26, a total of 199,000 heavy trucks were exported outside of Russia, +43.4% year-on-year. In May, 711 heavy trucks were exported to Russia, +11.6% year-on-year and +14.9% month-on-month; in January-May '26, a total of 2,355 heavy trucks were exported to Russia, -12.2% year-on-year.

Inventory: Inventory is in a healthy position

Inventory replenishment is clearly cyclical, and the peak period for industry inventory replenishment usually occurs in Q1/Q4. At the end of 25Q4, the total inventory of the heavy truck industry increased by 60,000 vehicles month-on-month. This is the first time since 21 that Q4 inventory has been added. At the beginning of '26, there was another significant increase in inventory, and the total inventory of the heavy truck industry increased by 40,000 vehicles month-on-month at the end of 26Q1. According to data from the Chamber of Commerce, as of the end of May '26, the total inventory of the heavy truck industry was 185,000 vehicles, up 47,000 vehicles from month to month, and 10,000 units from month to month. The dynamic inventory ratio (total inventory for the current month/rolling average of terminal sales in the past 3 months) was 2.7, which is within a reasonable range.

Demand: Logistics demand has recovered since the beginning of '26

According to the National Bureau of Statistics, the monthly year-on-year growth rate of road cargo turnover in May '26 was 2.4%; the cumulative year-on-year growth rate of road cargo turnover from January to May '26 was 3.1%, and logistics demand has been rising steadily since the beginning of '26.

Market share: According to the China Automobile Association, the cumulative wholesale sales market share of Sinotruk Group and Foton Heavy Truck increased year-on-year from January to May '26, +0.3pct, +1.4pct to 28.4% and 13.9%

According to Jiaotong Insurance, the cumulative terminal sales share of Sinotruk Group, Sinotruk A, and Foton Heavy Truck all increased year-on-year from January to May '26, +1.6pct, +2.3pct, and +1.8pct to 19.4%, 11.0%, and 13.1%, respectively. According to the China Automobile Association, the cumulative export market share of Sinotruk Group, Dongfeng Motor, and Foton Heavy Truck increased year-on-year from January to May '26, +1.0pct, +2.6pct, and +1.4pct to 46.7%, 10.1%, and 10.4% year-on-year.

Risk warning: industry sentiment is declining; raw material prices are rising; industry competition is intensifying, etc.