The overall performance of the machinery industry in 2020Q3 is improving, but the differentiation is still obvious. Among the 36 companies that the machinery industry has announced for the third quarter of 2020:
1). The performance of 28 companies is expected to increase, turn losses or reduce losses, accounting for approximately 78% of the total. Among them, 10 companies have a profit growth range of 0-50%, 6 companies have a profit growth range of 50%-100%, 4 companies have a profit growth rate of more than 100%, 6 companies have realized a loss, and 2 companies have realized a loss reduction.
2). The 8 companies' performance is expected to decrease or lose for the first time, and the number accounts for 22%. Among them, 7 companies are expected to experience a decline in performance, and 1 company has suffered its first loss. On the whole, the performance in the third quarter of 2020 is fully positive.
Construction machinery: gradually entering the small peak season, it is expected to maintain a high boom in the fourth quarter. In September, the sales of heavy trucks amounted to 136,000 units, an increase of 6% month-on-month and 63% year-on-year. Due to the high correlation between construction machinery and engineering heavy trucks, we expect the sales growth rate of excavators in September may exceed 50%. The off-season in the third quarter is not weak, and the revenue of OEM parts companies is expected to maintain high growth. At the same time, looking forward to the fourth quarter, the construction machinery industry is entering a small peak season. According to historical data, the sales volume of construction machinery products such as excavators increased quarter-on-quarter in the fourth quarter. We believe that the year-on-year growth rate in the fourth quarter indicates the prosperity of the industry in 1Q21. Benefiting from the start of major infrastructure projects and increased demand for equipment replacement, we expect construction machinery to maintain a high boom in the fourth quarter. Suggested attention: Sany Heavy Industry, Hengli Hydraulics, Zoomlion, Construction Machinery, Zhejiang Dingli, Xugong Machinery, Eddie Precision.
Oil service equipment: Affected by fluctuations in oil prices in the short-term, in the medium and long term, energy security strategies will promote upstream exploitation. The oil service equipment industry is expected to maintain a high boom. At present, there is still a large gap between my country's crude oil consumption and domestic supply, and the degree of external dependence is high. In the future, energy security is still a priority. In the context of the continuous advancement of the national energy security strategy, oil and gas exploration and development have increased, and capital expenditures have increased. Although short-term oil price fluctuations bring uncertainty, in the medium and long term, driven by the national energy security strategy, there is still broad room for demand for oil service equipment. Suggested attention: Jereh shares.
Laser industry: triple driving force resonance, the domestic laser industry chain market is expected to have broad prospects. Our analysis believes that the current core factors driving the growth of the laser industry chain mainly include three aspects:
1) Driving force 1: Relying on higher cost performance, laser equipment is continuously replacing traditional laser equipment, and the penetration rate of laser equipment is continuously increasing;
2) Driving force 2: Laser technology continues to mature, and lasers will continue to expand in 3C, new energy vehicles, photovoltaics and other application fields, which are expected to bring new demands for laser products;
3) Driving force 3: Limited by core components, the localization rate of medium and high power fiber lasers in my country needs to be improved. Under the autonomous and controllable process, localized substitution is expected to accelerate. Suggested attention: Baichu Electronics, Raycus Laser, Hymerus, Jept, etc.
Other industries: Structural opportunities are often present, focusing on the leaders in the subdivisions. Suggested attention: Juzi Technology, Jiechang Drive, Topstar, Jiejia Weichuang, Jingce Electronics, Zhongmi Holdings, Meiya Optoelectronics, Yizumi, etc.
Risk warning: there is a certain degree of uncertainty in macro policies; there are uncertainties in the external environment, etc.
