Since March, sales of excavators have maintained a good momentum, and the construction machinery industry represented by excavators has maintained a high prosperity.
This round of sales soared, not only because of the delay in market orders caused by the epidemic, but also because of the acceleration of infrastructure investment and the expected increase in equipment demand caused by the surge, as well as the factors of renewal under the background of environmental emissions upgrades.
Currently, excavator sales are entering the end of the traditional peak season. However, institutions generally expect that with the increase in counter-cyclical adjustments and the accelerated landing of infrastructure projects, which combined with a low base last year, the domestic excavator market is expected to appear in the third quarter.
The price increase did not affect sales recovery
According to the statistics of China Construction Machinery Industry Association, in May 2020, enterprises sold a total of 31,744 excavation machinery products, an increase of 68% year-on-year, far exceeding industry expectations. Among them, 29521 units were sold in the domestic market, a year-on-year increase of 76.32%. 2,223 units were exported, a year-on-year increase of 1.08%.
In the previous March and April, the sales volume of excavators were "40,000+" volume, respectively 49,408 and 45,426, an increase of 11.6% and 59.9% year-on-year.
In terms of product market structure, sales of large, medium, and small excavators maintained an overall growth trend. In May, domestic sales of large-scale excavators were 4,147 units, an increase of 59.3% year-on-year; sales of medium-sized excavators were 7,559 units, an increase of 70.2% year-on-year; sales of small-sized excavators were 17,815 units, an increase of 83.7% year-on-year.
In April, XCMG, Sany Heavy Industry, Zoomlion, Liugong and other companies have successively announced that they will increase the price of excavators, pumps and other equipment ranging from 5% to 10%, mainly due to the impact of the epidemic. The supply of supporting key components is tight, and the overall cost of production has risen sharply.
However, the rising prices of mainstream manufacturers have not affected the recovery of the construction machinery industry. GF Securities believes that the reasons behind the continued surpassing expectations for excavators include the continued issuance of special bonds, which has accelerated the implementation of infrastructure projects; the recovery of real estate investment has accelerated, and the sales of medium-sized excavators have rebounded significantly; protruding.
Kong Lingxin, chief analyst of the machinery industry of CICC Research Department, told First Finance that the successive resumption of construction and the improvement in infrastructure investment growth have driven excavator sales. In April, the national excavator operating rate reached 58.36%. The "digging machine utilization index" increased by 34.3% year-on-year, reaching a new high in the past two years. These two data reflect that the construction volume of the project is already at a relatively high level, and the operating rate may increase further in May and June.
While maintaining the growth in the demand for traditional infrastructure, the "new infrastructure" consisting of information infrastructure, converged infrastructure, and innovative infrastructure will further drive the demand for construction machinery.
Galaxy Securities said that the resumption of production and production in various places has gradually returned to normal levels, and key projects are being actively and orderly started. With the issuance of the second batch of special bonds to ensure stable investment, the recovery rate in the downstream has picked up and new infrastructure policies have been put in force, traditional infrastructure has been superimposed on new infrastructure, and the previously delayed demand is gradually being released. The acceleration of project approval and construction will maintain a certain intensity of future project construction progress.
The industry will continue to maintain a high prosperity
The continued boom in the construction machinery industry reflects the market's expectations for future fixed asset investment growth.
At present, the construction machinery industry has entered an opportunity period of improving quality and efficiency, and transforming and upgrading development. The strength of infrastructure construction is expected to continue to increase. At the same time, the construction of the "Belt and Road", the continuous rise in labor costs and the increase in environmental protection requirements will continue to support the steady increase in sales of construction machinery such as excavators.
GF Securities believes that the current demand for excavator renewal is still relatively strong. In the context of environmental protection emissions upgrades, there will still be a demand center of about 160,000 units in the next few years. At the same time, the current macroeconomic and monetary policies continue to be loose, and the mid- and long-term loan data of forward-looking indicators continue to improve, and the possibility of deterioration is very low.
Haitong Securities expects that the growth rate of excavator sales in June is still expected to increase by 50%, and the cumulative sales growth rate in the first half of the year is expected to exceed 20%. Looking back, it is inevitable that the construction machinery industry will enter the off-season compared to the previous season, but due to the low base in the third quarter of last year, and the new construction projects this year after the "two sessions" are expected to be gradually launched, the domestic excavator market is expected to appear in the third quarter. "Light" situation.
It is worth mentioning that the reform of state-owned enterprises will also inject new impetus into the industry. As a company that plays a decisive role in construction machinery and the entire equipment manufacturing field, the Xugong Group's mixed improvement exhibition has been widely concerned by the industry and also attracted the attention of the capital market.
On May 11, XCMG has signed strategic cooperation agreements with Su Mintou and the Su Chamber of Commerce. The next step will be to improve the work of XCMG Co., Ltd. governance, employee shareholding, and selection of professional managers. The mixed reform is expected to be completed by the end of the year.
Yang Dongsheng, general manager of XCMG Group Construction Machinery Co., Ltd., said that in accordance with the principle of highlighting the main business, XCMG Limited focused on the main business of construction machinery and core parts, divested non-main business assets to improve efficiency, and put it on light.
