Construction Machinery Industry May Review

The momentum from excavators to other varieties of spread.

May engineering machinery sales again exceeded expectations, the current industry to maintain a business climate, good business quality, industry concentration increased, especially a few leading companies currently value 10-12 times, with a margin of safety. Thanks to loose monetary policy and the drop-off of local debt funds and the economic supplement steaming board since the fourth quarter of last year, the sector is expected to remain buoyant in 2020-2021, with the second quarter results expected to grow significantly. The main leading host enterprises full-year revenue growth target of 20-30%, we expect gross margin will increase; Engineering machinery industry performance forecast has the possibility of upward, continue to highly recommend Sany, Zhonglian, Hengli, Eddie.

In May, excavator sales were 68% year-on-year, again exceeding expectations (50% of the industry consensus). According to the statistics of the Engineering Machinery Industry Association, the 25 excavator manufacturers included in the statistics in May sold a total of 31,744 excavators of all kinds, up 68% YoY; From January to May, 145,800 excavators were sold, up 19.4% YoY, including 134,169 units in China, up 19.3% YoY, and 11,631 units were exported, up 20.7% YoY. From the product structure, small digging rapid growth, mainly by labor substitution, rural construction and the implementation of infrastructure around the big dig, middle-digging by the impact of investment, relatively obvious fluctuations, large-scale mining decline.

Digging machine sales to maintain rapid growth is due to: February market over-fall, resulting in market orders delay, capacity is not enough, many host plants in a state of out-of-stock, from May began to disappear, in June and July gradually resume the original market trend. In addition, the downstream infrastructure and real estate investment (old reform relay shed reform) are good, the total demand increased, especially infrastructure: January-April new special debt amounted to a total of 1.22 trillion yuan, from the new special debt for infrastructure projects, the proportion of funds for infrastructure projects, the main projects are transportation (rail, rail, toll road), hospital school construction, traditional industrial parks, ecological environmental protection, municipal construction, new infrastructure and so on. The proportion of investment in infrastructure was 69% (including 6% of new infrastructure and excluding hospitals), a significant increase from 24% for the whole of last year. Looking forward to the excavator industry throughout the year, this year is expected to maintain 20-30% growth, more than expected at the beginning of the year, the main reasons are: (1) environmental protection demand is relatively large, many places to implement the delimitation of high emission areas, the formation of new demand;

Loader sales have been growing steadily and exports have fallen sharply. A total of 12769 loaders were sold by 22 loader manufacturers in May, up 12.2% year-on-year. Among them: 3 tons and above loader sales of 12018 units, an increase of 14.5% year-on-year. Total sales in the domestic market 11,425 units, up 24.3% YoY, and export sales of 1344 units, down 38.5% YoY. From January to May, 53,712 loaders were sold, down 3.08% YoY, while total sales in the domestic market were 44,230 units, down 2.41% YoY, and export sales were 9482 units, down 6.12% YoY.