Guojin Securities: Machine tool performance is accelerating, and prosperity is further improving

The Zhitong Finance App learned that Guojin Securities released a research report saying that the global machine tool industry is currently entering a new upward cycle, with a cumulative total of 1248,383 billion yen in new orders from January to July 2026, an increase of 38% over the previous year, including export orders of 922.253 billion yen, an increase of 42% over the previous year. This round resonates with the procyclical recovery and the explosion of emerging industries, and continues to be optimistic about the boom in the machine tool industry. The boom in the machine tool industry has accelerated. Domestic and foreign companies all performed well in the second quarter reports. Revenue grew at an accelerated pace and profits were released flexibly. More companies signed new orders and broke record highs. It is recommended to focus on leading domestic machine tool companies.

Guojin Securities's main views are as follows:

The global machine tool industry is currently undergoing a new upward cycle

Looking at data from China, Germany, and Japan, the global machine tool industry bottomed out in 23 years and is currently undergoing a new upward cycle. Overall, the 26-year data has improved markedly. In particular, according to the latest data disclosed by the Japan Machine Tool Association, in July 2026, the Japanese metal cutting machine tool industry signed a new order of 193.102 billion yen, an increase of 50.4% over the previous year, including export orders of 139.864 billion yen, an increase of 50.5% over the previous year. Thanks to high demand growth in the manufacturing industry in China and the US, orders for Japanese machine tools exploded. From January to July 2026, a total of 124.383 billion yen of new orders were signed, an increase of 38% over the previous year, including export orders of 922.253 billion yen, an increase of 42% over the previous year.

The growth in the performance of domestic companies accelerated the release of flexible profits, and new orders signed by overseas companies repeatedly broke new highs

Benefiting from the recovery of industry sentiment, the 2Q26 revenue and profit growth of leading domestic companies generally further accelerated. As capacity utilization increased, the net interest rate level also returned to a high level of nearly two years. At the same time, contract debt was also on the rise, and several companies announced production expansion to meet future growth needs. Overseas companies such as Fanuc, Demagison Seiki, and Makino generally reached a record high, reflecting the high level of prosperity in the global middle and high-end manufacturing industry. For example, DMG's 2Q26 new orders increased by about 41% year on year, with orders from China growing at a rate of about 87%. Fanuc's FA business (including CNC systems for core components of machine tools) 2Q26 has increased by about 64% year on year. Both midstream machines and upstream core components are currently seeing strong demand. A number of overseas companies further revised their revenue and order guidelines for the whole year in the second quarter.

This round resonates with the procyclical recovery and the explosion of emerging industries, and continues to be optimistic about the boom in the machine tool industry

The current machine tool sector is booming. On the one hand, the bank believes that it is being driven by the upward inventory cycle of the domestic manufacturing industry. Referring to historical rules, a complete inventory upward cycle usually lasts 1.5-2 years. This round of active inventory replenishment will begin in mid-2025. Based on a 3-6 month conduction delay, the upward cycle of equipment demand will continue from the end of 2025 to the first half of 2027 to the end of 2027. On the one hand, it is compounded by the explosion of emerging industries such as robotics and liquid cooling. For example, Tsugami Machine Tool China's other revenue, which includes AI computing power, tools, humanoid robots, etc., reached 46% in fiscal year 26, with a share of 50% in the second half of the year; Genesis AI hardware (liquid cooling, optical module) signed new orders of 1,056 million yuan, an increase of 352.8% over the previous year, accounting for 20% of total orders; the emerging sector began to contribute significantly to the increase in performance. Under the influence of the pro-cyclical recovery and the explosion of emerging industries, the duration and intensity of the current boom cycle in the machine tool industry may exceed expectations, and we continue to be optimistic about the boom in the industry.

Risk Alerts

The recovery in the machine tool industry's boom falls short of the expected risks, and the progress of domestic substitution falls short of the anticipated risks.