I. Do not change for a long time
Construction machinery is under pressure in the short term, and will not change for a long time. The sales volume of excavators from January to February was 19,200 units, a year-on-year decrease of 37.0%. The domestic market sales of 14,700 units, a year-on-year decrease of 46.5%. The significant year-on-year decline was due to the impact of the epidemic, and the resumption of downstream projects was slower than the same period. However, with the further verification of the inflection point of the domestic epidemic, the demand for preliminary suppression is expected to be released. Affected by the epidemic Although the sales volume of construction machinery in the first quarter was under pressure, considering that the downstream construction machinery related projects have a long construction cycle and the demand has a certain rigidity, the impact of the epidemic in the long run is more a delay in demand than a wipe out. With the gradual improvement of the domestic epidemic situation, the backlog of demand for construction machinery in the future is expected to usher in a rebound. The peak demand is expected to be postponed for about 4-8 weeks and arrive in April-July.
Anti-cyclical policies are expected to strengthen
Demand side: counter-cyclical policies are expected to strengthen, and the construction machinery sector is expected to benefit directly. The scale of local government bond issuance in January-February reached 12,271.5 billion yuan, a year-on-year increase of 56.9%. From the perspective of structure, the proportion of special debt increased from 42% to 77%, of which 60% was invested in infrastructure, compared with less than 30% in the same period last year. In addition, the recent new infrastructure policies continue to increase, which is conducive to the long-term demand boom of construction machinery. The counter-cyclical policy has generated some support for infrastructure investment and is expected to boost the boom in demand for construction machinery.
Supply side: "War epidemic" to ensure production, resumed work in good condition. According to our survey, leading hydraulic parts manufacturers are mostly local employees, and their composition is relatively simple, basically reaching 100%, and most of the OEM employees are employees of the surrounding provinces and cities. The affected areas are relatively less affected by the epidemic, as of March On the 11th, the rate of return to work was over 90%. In addition, construction machinery enterprises actively responded to the epidemic situation, adjusted the supply chain to eliminate the impact of inaccessible supply chains and employees in some regions, and issued bonds one after another to raise funds to ensure the company's epidemic prevention work and supplement its cash flow. At present, the resumption of work of leading enterprises is good, and they are able to cope with the lagging demand peak.
Third, the market share of OEMs is expected to increase
For the leader of construction machinery OEMs, the follow-up market share is expected to continue to increase. Affected by the epidemic, the company's own shutdown and supply chain logistics have been affected to a certain extent, leading to relatively low inventory of the OEM, especially the hydraulic parts that have been a long-term pain point for China's construction machinery enterprises, except for Sany Heavy Industry, Xugong Machinery, China OEMs other than Zoomlion are generally understocked, which may affect the number of subsequent peak demand deliveries. Therefore, the market share of leading OEMs with relatively sufficient stocks is expected to continue to increase. In addition, the resumption of work for major projects is faster than for small projects, especially for very large projects, such as the relatively low shutdown rate for mining equipment during the Spring Festival. Therefore, for large tonnage equipment such as large excavators, large truck cranes, and large tower cranes, the impact of the epidemic on Its sales impact is less than for small tonnage products. To sum up, the market share of core products of leading OEMs is expected to continue to increase, and Sany Heavy Industry, Xugong Machinery and Zoomlion Heavy Industry will continue to be recommended.
Fourth, the localization process of hydraulic parts may be accelerated
Hydraulic parts are affected by the spread of overseas epidemics, imports may be blocked, and the localization process is expected to accelerate. The hydraulic parts of domestic construction machinery, including pumps and valves, mainly rely on imports. World-class hydraulic parts leaders represented by Kawasaki Heavy Industries, Rexroth, KYB, Husco occupy the major market of hydraulic parts of construction machinery in China. However, due to the spread of overseas epidemics, the operation of the world's leading hydraulic parts enterprises has been affected to a certain extent, and the import of hydraulic parts in China may be blocked. At present, the domestic hydraulic parts supply side is working well. The leading hydraulic parts Hengli Hydraulics and Eddy Precision are close to 100%. They are able to cope with the rapid increase in demand in the future. The localization process of hydraulic parts is expected to accelerate. Continuously recommending hydraulic parts Leading enterprises Hengli Hydraulics, Eddy Precision.
risk warning. The overseas epidemic has spread significantly, the macro economy has fallen sharply, and the growth rate of real estate investment has fallen sharply.
