China Securities' forecast for the machinery industry in the second half of 2025 highlights several promising trends. The machinery sector emerged as a notable performer, ranking sixth in A-share gains during the first half of the year. Notably, stocks related to robotics shone particularly brightly. Despite the current lull in domestic demand, industry players are resolutely pursuing overseas expansion opportunities. Looking ahead to the latter half of 2025, hard technologies like embodied intelligence and controlled nuclear fusion are anticipated to serve as pivotal catalysts for reviving domestic demand. Concurrently, the combination of low valuations and high dividend yields is poised to benefit from the prevailing downward trend in interest rates. Furthermore, industries demonstrating global competitiveness deserve close attention. In light of these factors, China Securities advises increasing investments in the machinery industry.