A few days ago, China Construction Machinery Industry Association held the "China Brand Day Theme Activity and Leasing Expo Booth Map" ceremony, which was a warm-up for the 2020 International Leasing and Technical Equipment Expo to be held in Beijing from October 21st to 23rd . It is understood that at the 2020 International Leasing and Technology Equipment Expo hosted by the China Construction Machinery Industry Association, it will focus on the display of advanced construction machinery leasing new technologies, new products and the latest rental management and service results. Li Hanbing, secretary general of China Construction Machinery Leasing Branch, said that in 2019, China will become the world's largest construction machinery rental market with a market size of about 700 billion yuan. After more than 30 years of development, China's construction machinery rental industry is entering a critical period of development, moving from quantity growth to quality and efficiency, from small and micro to a single large-scale direction.
There is still a gap in the development of the industry, the identity threshold needs to be broken
Although my country's construction machinery rental industry has been greatly developed, but compared with developed countries in the world, there is still a gap. From a global perspective, the leasing market accounts for 25% of the total value of construction machinery; only 10% of my country's construction machinery products have entered the leasing market. At present, there are still some enterprises in the domestic construction machinery financing and leasing industry with low management level, insufficient behavior in the industry, immature development of the industry, uneven main bodies of the industry, and large scale differences.
In addition, from an in-depth analysis, the financial leasing industry has obvious characteristics of cyclical fluctuations along the economy. Needless to say, the previous oil crisis and global financial crisis, this sudden new crown epidemic can be said to disrupt the development of the entire industry, especially the financial leasing companies mainly based on aircraft leasing are affected by it. At the same time, China's leasing industry has formed a pattern of different rules in the same industry in China's development history. Financial leasing companies are not allowed to engage in the business of absorbing non-bank shareholders’ time deposits of more than 3 months (inclusive), inter-bank lending, nor can they issue financial bonds or even lend to financial companies within the same group.
In this way, compared with financial leasing companies, financial leasing companies have lost the ability to replenish liquidity simply and quickly in case of emergencies. On January 8, 2020, the China Banking and Insurance Regulatory Commission issued the "Interim Measures for the Supervision and Management of Financing Leasing Companies (Draft for Comment)", which adjusted the leverage multiple to not exceed 8 times the net assets of the total risk assets, and included the entrusted lease into the risk assets. Category, further limiting the upper limit of leverage multiples. And financial leasing companies continue to use the highest leverage multiple of 12.5 times. All these have had a greater impact on the development and growth of the construction machinery financing and leasing industry, and have increased the risk of employment. In this regard, industry companies need to work together to discuss related countermeasures and actively improve themselves to promote the healthy and sustainable development of the industry.
Resource optimization and precise management
Precision management is an effective means to improve operational efficiency and enhance value creation capabilities. Regulatory departments’ leverage multiple restrictions and the assessment of the shareholder’s debt ratio have also prompted financial leasing companies, including construction machinery, to balance development speed and capital needs, and change the mode of relying mainly on leverage and interest margins to achieve profitability.
As China's financial leasing industry (including construction machinery financing leasing industry) still has the phenomenon of homogeneous competition, many people in the industry have proposed to take the road of professional and differentiated development. However, as a large financial leasing company, specialization and differentiation are by no means only to do business in a certain specialty and field and implement differentiated services in this specific field, otherwise the impact of cyclical economic fluctuations cannot be relieved. This epidemic has caused unprecedented impacts on some companies specializing in passenger aircraft and passenger car rental. Health, distance education, agricultural production, and green logistics have developed better. Therefore, to achieve a certain scale of financial leasing companies, it is necessary to do a moderately diversified business layout according to their own business foundation and team situation. A good business layout is to obey the national strategy and serve as a firm supporter of the government's counter-cyclical adjustment.
The vigorous development of China's construction machinery financing and leasing industry has led more and more construction machinery manufacturers and agents to start exploring the leasing business in depth. According to the statistics of the China Construction Machinery Industry Association's Agent Working Committee, there are currently more than 65.2% of construction machinery agents The merchant has been involved in the equipment leasing business. For agents, not only can they cultivate new businesses, but they are also a means of hedging business risks, and they are also an important part of building a "circular management" model. In the domestic construction machinery industry, China Lianhe Heavy Industry (000157) and XCMG Group started the leasing business earlier.
Zoomlion's financial leasing company's main business is to provide financial leasing services for the sale of domestic engineering cranes, construction cranes, concrete machinery and other products. Zoomlion achieved the expansion of sales of equipment by means of financial leasing, and the turnover obtained through this method accounted for more than 20% of the group's total revenue; XCMG Group's financial leasing company, through the approval of the Ministry of Commerce and the State Administration of Taxation, became Pilot financial leasing domestic investment, this move greatly expanded the sales of XCMG construction machinery equipment and improved the overall strength of XCMG Group. At present, a number of excellent enterprises with well-equipped and standardized management have emerged in the field of leasing of tower cranes, forklifts, aerial work platforms, earthmoving machinery, road machinery, engineering cranes, concrete machinery, pile driving machinery and other products in China.
The outbreak of the new coronary pneumonia epidemic has brought a certain impact to the market, but with the effective control of the epidemic, the construction machinery market is gradually rejuvenating. Although the rental level will decline with fierce competition, but with the diversification of equipment products and the continuous expansion of application fields, the scope of use will be wider, and the construction machinery finance leasing industry is promising.
