With the improvement of the domestic epidemic prevention and control situation and the improvement of the resumption of work, major projects in various regions have been started one after another, and the demand for excavators has gradually increased. Overall, the construction machinery industry has benefited from strong demand, tight supply chains, and major product prices rising one by one. In the secondary market, price increases are expected to trigger an active inflow of funds, and the construction machinery industry is growing strongly.
It can be seen that the price of the pump truck rose by 5-10% last Wednesday. On Wednesday, XCMG's excavators began to increase prices, small excavators increased prices by 10%, and large excavators increased prices by 5%. The core logic behind the continuous rise in the prices of various types of construction machinery is the strong demand in the industry. Northeast Securities analyst Liu Jun pointed out that the main supporting factors of the industry include the continued growth in the scale of downstream infrastructure real estate investment demand, thereby driving the continued growth in demand for equipment holdings. Secondly, the main categories of construction machinery also have their own growth logic. Excavators also have drivers to replace loaders, increase micro-excavation penetration and accelerate the speed of overseas markets. The penetration rate of the pump truck in the rural market still has a large penetration space, and the tower crane has a huge pulling effect on the industry demand for prefabricated buildings.
Considering that the terminal price of excavators usually decreases at the beginning of the year and after the holiday, the main reason is that everyone is not sure what impact this epidemic will have on construction machinery. The top priority is to grab a share. The primary consideration for construction machinery companies is to expand their scale. The losses of this round of price reductions are mainly borne by the dealers. Liu Jun said that the current price increase is a normal return, and the terminal price will change with changes in sales and inventory. At present, the industry is generally in short supply and the possibility of price increases is high. From the perspective of the impact on the industry, the price increase will directly cover the dealer level, and the sales growth brought by the strong demand of the industry will further promote the steady growth of this year's performance. Continue to comprehensively examine the diverse construction machinery industry and recommend investors to pay attention to Sany Heavy Industry, Xugong Machinery, Hengli Hydraulics, Zoomlion, etc.
Sany Heavy Industry (600031) Continued the rapid growth
The company is a leading enterprise in the construction machinery industry. Its products cover all kinds of construction machinery, forming a diversified business pattern. Since the recovery of the construction machinery industry in 2016, the company's parent company's revenue and net profit have grown rapidly, operating cash flow has improved significantly, operating efficiency has improved significantly, per capita output is three times the previous round of industry highs, and operating risks have been significantly reduced The ageing structure of accounts receivable has been continuously optimized, achieving high-quality growth. Societe Generale pointed out that as the number of construction machinery equipment enters a high level, according to the update cycle calculation, the demand for equipment update will continue to grow, becoming the leading force for the industry to continue to improve in this round. At the same time, the upgrade of emission standards will promote the concentration of existing equipment upgrade peaks and further enhance the certainty of industry growth in the next few years. The company expects net profit to reach 10.81-18 trillion yuan in 2019, a year-on-year increase of 76.58% -92.93%, and its performance continues to grow rapidly.
XCMG (000425) has obvious valuation advantages
The company is a leading company in the field of cranes in China, and its market share ranks first in the industry all the year round. In the first half of 2019, the crane business accounted for 37% of total revenue and gross profit margin reached 50%. Since 2015, the gross profit margin of XCMG Machinery Cranes has rebounded rapidly, reaching about 25% in the first half of 2019, basically the same as in 2010. The restoration of the crane's gross profit margin has boosted the company's overall gross profit margin and net profit margin. GF Securities pointed out that the company is currently a low-value construction machinery OEM. from this angle
With the booming excavator industry, the company's revenue and profitability have increased rapidly. From 2015 to 2018, the compound growth rates of the company's operating income and net profit were 75.3% and 85.01%, respectively. At present, the company's production scale and technical level have ranked among the forefront of the world's hydraulic field, and is expected to become a world-class leader in hydraulic components. Anson Securities pointed out that the steady increase in excavator sales has driven the steady increase in demand for excavator hydraulic components. It is estimated that the market space of excavator cylinders will be 4.1 billion and 4.2 billion yuan from 2020 to 2021, and the market space of pump valves will be 5.5 billion yuan and 5.6 billion yuan. At present, the excavator cylinders have been basically localized, but the localization rate of pumps and valves is still less than 20%, and the localization process of hydraulic components such as pumps and valves is expected to accelerate. At present, the verification work of Hengli large excavation pump valves by major OEMs at home and abroad is steadily advancing, with a verification period of 1-2 years. After the verification is passed, it is expected that the excavation pump valve business will show a leaping growth.
Hengli Hydraulics (601100) accelerated the localization process
In 2019, the company's industry was driven by factors such as infrastructure investment, equipment updates, environmental protection upgrades, and manual replacement, and overall growth continued to maintain a strong momentum. Among them, the company's specific revenue reached 13.9 billion yuan, a year-on-year increase of 36.75%, and the crane undergraduate income reached 22.1 billion yuan, a year-on-year increase of 77.57%. At the same time, the market position of the company's leading products continues to rise, and the market share of lifting machinery and concrete machinery products continues to maintain a "leading" position. Northeast Securities pointed out that due to the development of prefabricated buildings, the boom of the tower crane industry is expected to continue, and the company as an absolute leader is expected to fully benefit. The concrete machinery continued to recover and the permeability of the small pump truck increased. The company is one of the duopoly enterprises in the industry and has sufficient development potential. The high-altitude operation vehicle has a good growth trend in the future, which is the company's key training variety in the future. In terms of business volume and profitability, there is still great potential for development. In general, the company's development is relatively certain.
Zoomlion (000157) has high development certainty
The company acquired Shanghai Pangyuan Leasing Co., Ltd. and Sichuan Zigong Tiancheng Construction Machinery Co., Ltd. in 2015. Among them, the main business of Zigong Tiancheng Construction Machinery is low-end tower cranes, which have good synergy with listed companies. Shanghai Pangyuan Leasing's main business is tower crane leasing, which involves the downstream industrial chain of the company's main products. Through this acquisition, the company has enhanced its manufacturing capabilities in the field of construction machinery, opened up downstream customers, and entered the equipment rental service industry from equipment manufacturing. Yuekai Securities pointed out that the penetration rate of construction machinery equipment rental in the construction machinery market is also increasing. In 2018, the penetration rate of the construction machinery rental industry has exceeded 50%. In the future, with the advantages of the equipment leasing business, the penetration rate of leasing in the construction machinery industry will further increase. In addition, there are no more than 100 professional construction machinery leasing companies with assets above 50 million yuan. The market competition pattern is extremely fragmented. There are few large leasing companies, and leading leasing companies have a lot of room for expansion.
Construction Machinery (600984) Ample room for expansion
The company's technology research and development has been steadily advancing, entering the high-end hydraulic parts industry, and gradually developing into a new profit growth point for the company. Shanxi Securities pointed out that in the long run, with the continuous strengthening of the national counter-cyclical adjustment policy, the overall demand for construction machinery will gradually become normal. Short-term fluctuations will not change the medium- and long-term trends. With the effective control of New Crown Pneumonia, the marginal effects of this policy are expected to increase. As the leading enterprise in the hydraulic breaker industry, the company will gradually resume downstream business, and the sales volume of the main engine manufacturers will gradually increase.
