The organization is optimistic about the construction machinery
Recently, the market trend has been more volatile, and many of the blue-chip stocks have been adjusted back, looking for stocks that have been wrongly killed and become potential opportunities in the market.
Market participants said that sales of construction machinery represented by excavators continued to grow in 2019, leading to high growth in the performance of leading companies. The overall valuation of the construction machinery sector is at a historically low level, and the leading target still has both valuation and performance flexibility.
Industry boom continues
From the fundamentals of the industry, the latest statistics from the China Construction Machinery Industry Association show that 25 excavator manufacturers that were included in the statistics in September 2019 sold a total of 15,799 excavators, an increase of 17.8%. The domestic market sold 13,182 units, a year-on-year increase of 12.5%. Exports reached 2,617 units, a year-on-year increase of 54.9%. From January to September, the cumulative total sales volume was 179,195 units, a year-on-year increase of 14.7%; the cumulative domestic sales of 159,810 units, an increase of 12.2%; cumulative exports of 19,385 units, an increase of 39.9%.
Bank of China International Securities Machinery Equipment Industry analyst Yang Shaohui predicted that the industry's annual sales exceeded 220,000 units is a high probability event, and is expected to hit 230,000 units.
From the perspective of different models in the domestic market, sales of small, medium and large digging in September were 8077, 3057 and 2048, respectively, up 15.8%, 4.8% and 12.2% respectively. Yang Shaohui said that the growth rate of small-digging sales in July-September has remained at double-digit level. The expansion of application scenarios, machine substitution, and rural revitalization are the long-term logic to promote the growth of small-digging sales. The domestic small-scale excavation has not touched the ceiling. Therefore, the sales volume of small-scale digging will continue to grow positively in the future; the growth rate of real estate investment is still high, and the growth rate of infrastructure investment has also increased. The growth rate of medium-digging sales has remained at around 5%, and it is expected to remain relatively stable in the future.
For the reason that the industry's prosperity remains high, Zhang Dongming, an analyst at Bohai Securities Machinery Industry, believes that the supporting factors come from four aspects. First, the investment in real estate and infrastructure fixed assets increased significantly, and downstream demand rebounded significantly. Second, the construction machinery purchased around 2011 has reached the replacement cycle, and the demand for renewal is strong. Third, the environmental protection requirements are increasingly strict. Vehicles that do not meet emission standards are subject to operational restrictions. Fourth, the “One Belt, One Road” initiative has effectively boosted the export of construction machinery.
Leading share continues to increase
After the industry's downturn, the concentration of construction machinery market has further improved, and the overall profitability has improved significantly. In September, the sales volume of the three domestically produced leading Sany Heavy Industry, Xugong and Liugong increased by 13.4%, 48.0% and 61.1% respectively. The market share in January was 25.3%, 14.1%, and 8.3% respectively. Sany Heavy Industry was slightly lower than the average growth rate of the industry due to the high base in the same period last year. The sales growth of Xugong and Liugong continued to far exceed the industry's growth rate. Level.
Yang Shaohui said that in the future, with the improvement of the level of technology in the domestic leading enterprises, the product price-performance advantage will be further highlighted and the service system will be improved, the market share will further expand.
China Aviation Securities said that the macro economy is still facing downward pressure. Under the background of countercyclical regulation, higher-intensity infrastructure investment will continue, especially the local debt quota issued in advance, which will provide financial support for local government infrastructure investment. The capital construction investment demand superimposed the demand for construction machinery renewal, and continued to maintain an optimistic view on the construction machinery industry. It is recommended to continue to pay attention to the industry head enterprises.
“The domestic leading share continues to increase throughout the current cycle, and the share of Japanese and Korean excavators continues to shrink.” Dongxing Securities Industry Research said that the rise of self-owned brand excavators is an important trend in the industry over the past decade, with Sany and Xugong. With the rise of domestic brands, the share of Japanese and Korean brands has been greatly reduced. The domestic excavator brand has great service and product advantages, and the market share is expected to continue to increase in the future. At present, the overall valuation of construction machinery is at a historical low level. The leading index of construction machinery still has both valuation and performance flexibility. The balance sheet of the sector continues to improve, the cash flow and business cycle are obviously improved, and the subsequent microdata is not pessimistic. space.