Currently, the construction machinery industry continues to be hot. The industry believes that the domestic resumption of work and production, infrastructure, and real estate are the main factors driving the rebound in construction machinery sales in the second quarter. It is expected that as the construction of the "two new and one high" construction continues in the fourth quarter, a number of major and large projects have been implemented one after another, the construction machinery industry will continue to maintain a high boom, and the growth momentum is expected to continue.
Since the second half of the year, the construction machinery industry has continued to be hot. According to the latest data from China Construction Machinery Industry Association, the 25 excavator manufacturers included in the statistics in August 2020 sold a total of 20,939 excavators of various types, an increase of 51.3% year-on-year. Domestic excavator sales have maintained a year-on-year growth rate of more than 50% for five consecutive months. The total sales in the first eight months of this year accounted for 89.3% of the total sales in 2019.
Excavators are one of the main types of construction machinery widely used in various large and small earth and stone works, and they are also one of the most sensitive types of machinery that respond to changes in downstream demand. It can be predicted that this year will be another bumper year for the construction machinery industry.
Rising month by month since the second quarter
In the first half of the year, affected by the new crown pneumonia epidemic, the overall operating rate of infrastructure across the country was insufficient, and the overall operating rate of construction machinery stock was not high, which brought short-term adverse effects on the upstream and downstream of the construction machinery industry.
According to statistics from the Construction Machinery Industry Association, the sales of the main products of 12 key enterprises in the industry in the first quarter were far below expectations, and the sales in the second quarter compensated for the gap between sales in the first quarter and expectations. The overall situation in the second quarter was better than that in the first quarter, and the sales in the first half of the year showed a trend of low and high. From April to June, sales of excavators, truck cranes, truck-mounted cranes, forklifts, road rollers, elevating work platforms, and aerial work vehicles hit the highest level in the same period in history.
The sales of construction machinery continued to surge, and the performance of related listed companies in the first half of the year was also very impressive.
According to data from the semi-annual report, the net profits of Sany Heavy Industry and Zoomlion, the leading OEMs, increased by 25.5% and 56.0% year-on-year, respectively. The net profits of Hengli Hydraulics and Eddie Precision, the leading parts and components, increased by 47.0% and 61.9 respectively. %.
At present, enterprises and analysis institutions in the industry believe that the domestic resumption of work and production, infrastructure, and real estate are the main factors driving the rebound in construction machinery sales in the second quarter.
Wanlian Securities stated that under the background of loose monetary policy, continuous promotion of "two new and one heavy", and increased environmental protection control, the boom of the construction machinery industry continued to exceed expectations.
Bank of China Securities pointed out that the continuous high growth in domestic excavator sales is mainly due to the increased counter-cyclical adjustments after the epidemic, the obvious increase in infrastructure investment, real estate investment still maintaining strong resilience, replacement of machines, environmental protection upgrades and elimination, and continued demand for natural renewal. Factor driven.
Digital and intelligent equipment exerts force
In the domestic and international markets, the needs of construction machinery users for equipment are constantly diversifying, and it is an inevitable choice for construction machinery to become intelligent in the future. Japan's Komatsu Manufacturing Co., Ltd. announced last year that it will start a verification test for construction machinery that uses artificial intelligence to achieve autonomous operation, and strive to achieve commercialization in 2021.
In the tide of international construction machinery powerhouses competing to develop digital technology, Chinese companies are also rising. For example, 5G remote driving, many companies such as Sany, Liugong, Shantui, Zoomlion, etc. have demonstrated 5G remote control technology. Some intelligent construction machinery with functions such as auxiliary operation, unmanned driving, status management, fleet management, safety protection, special operations, remote control, fault diagnosis, life cycle management and other functions have been practically applied, which has solved some problems in construction. Difficult problem.
At the same time, in order to meet the needs of economic construction for major engineering and technical equipment, a batch of high-end engineering machinery and major technical equipment was born in China. Major technical equipment such as large shield machines, large all-terrain cranes, two-wheeled slot milling machines, super-large excavators, high-performance all-terrain engineering vehicles, high-speed wheel excavators, and super-large flat-top tower cranes participated in major projects at home and abroad Construction has effectively improved the level and status of my country's construction machinery.
When talking about the development of product technology, Su Zimeng, executive vice president and secretary-general of China Construction Machinery Industry Association, said that up to now, the industry's digital and intelligent engineering equipment has achieved great results on the basis of early innovative research and development. Some core components have made new progress in realizing import substitution due to continuous improvement in design, manufacturing, and testing capabilities and levels. At the same time, he also said that overall, the level of digitalization, greening, and complete sets of some products needs to be improved, and the market competitiveness of some large-scale equipment and core components is still insufficient.
High boom expected to continue
Whether the growth momentum of the construction machinery industry can continue is the most concerned issue in the current industry.
From the analysis of the association, the industry is expected to develop steadily. The association predicts that the domestic construction machinery market demand will grow steadily throughout 2020. Based on environmental protection policies and investment policies, the association has given positive expectations for the Chinese construction machinery market in the next five years. According to the "14th Five-Year Plan" of China's construction machinery industry, it is estimated that from 2021 to 2025, the industry's average annual growth rate will reach 5%.
Judging from the analysis of industry institutions, the situation is generally optimistic. Pacific Securities pointed out that in the second quarter of this year, the off-season of construction machinery was not short, and sales of excavators continued to grow at a high rate in August, with abundant project reserves in various regions. In terms of funding, on August 7, the China Securities Regulatory Commission issued the "Guidelines for the Public Offering of Infrastructure Securities Investment Funds (for Trial Implementation)", which will provide support for expanding financing channels for infrastructure projects and reducing financing costs. Therefore, it is judged that the construction machinery industry sales in the second half of the year are expected to continue to exceed expectations.
Guosheng Securities analyst Yao Jian also judged that the improvement of the financing environment and the higher growth rate of infrastructure investment will continue the high boom of construction machinery. On the policy side, since the second half of last year, "wide credit" policies for infrastructure projects have been intensively introduced, and an improved financing environment will be a solid foundation for the increase in infrastructure investment growth.
From the perspective of construction machinery manufacturers, leading companies in the industry also remain optimistic about the second half of the year. Relevant executives of Zoomlion said at a recent performance briefing that due to the impact of the new crown pneumonia epidemic, the peak construction season of the construction machinery industry this year will be postponed by 2 to 3 months. The construction of the “two new and one high” continues to advance, and a number of major and mega projects have been implemented one after another. The industry will continue to maintain a high boom.
Xiang Wenbo, President of Sany Heavy Industry, has great confidence in the long-term development of construction machinery. He said that the huge domestic market has provided a good foundation for the development of China's construction machinery industry. "China's construction machinery industry must lead the world, and this trend is irreversible." Xiang Wenbo said.
