The excavator market was booming in the first half of the year, and sales continued to exceed expectations. It is expected to maintain high growth in July. In the first half of 2020, a total of 170,000 excavators were sold, a year-on-year increase of 24.2%; among them, 25,000 units were sold in June, a year-on-year increase of 62.9%. In January and February, due to the Spring Festival holiday and the spread of the new crown pneumonia epidemic, the sales of excavators showed negative growth. However, since the resumption of work and production in March, the construction period has been compressed and the demand has shifted back, and the sales of excavators have returned to the growth trajectory. Sales in April, May, and June have become more popular, and the sales of excavators have increased by more than 60% year-on-year. The downstream demand is strong, and the OEMs once appeared in short supply. In April, the prices of excavators from major OEMs all increased. As the price of excavator products fell sharply last year, the profit margin of excavator agents was low, and operations were difficult. This price increase will also rebuild the upstream and downstream of the industrial chain. Good ecology is expected to push the industry into a stage of high-quality development.
According to data from the official WeChat account of Sany Group, core component manufacturers scheduled production growth of more than 70% year-on-year in July. Combined with the inventory consumption of OEMs, it is expected that excavator sales in July will continue to maintain rapid growth. Generally speaking, July and August are the traditional off-season for sales of construction machinery, but this year, under the background that provinces and cities vigorously issue special bonds to stabilize the economy, it is expected that the excavator market this year will show the characteristics of "not off-season".
The issuance of trillion-level special bonds and anti-epidemic special government bonds has accelerated, and infrastructure investment is expected to continue to boost the industry's prosperity. In 2020, the counter-cyclical adjustment of China’s infrastructure investment will continue to increase, and the government will launch a pilot program for public offering of REITs in the field of infrastructure; the two sessions "proposed that local government special bonds are planned to be 3.75 trillion yuan this year, an increase of 1.6 trillion yuan over last year, and special bonds will be increased. The proportion of project capital that can be used to increase the proportion of special bonds invested in infrastructure, etc. In May, local government special bonds issued 1.03 trillion yuan, a record high in a single month; in the first half of the year, local government special bonds totaled 2.37 trillion yuan , A year-on-year increase of 52.9%. In May, the issuance of treasury bonds was 677.32 billion yuan, a significant increase year-on-year. According to the specific plan of the Ministry of Finance, this year’s 1 trillion yuan anti-epidemic special treasury bonds will be issued in mid-June and will be issued before the end of July. The transfer to local governments is mainly used for public health and other infrastructure construction and anti-epidemic related expenditures, and part of the funds is reserved for local governments to solve special difficulties at the grassroots level.
In addition, in the second quarter of this year, China Railway Group increased its railway investment plan and increased the organization and implementation of construction in progress. The completed investment was 245.9 billion yuan, an increase of 11.4% year-on-year, of which 179.7 billion yuan was completed in infrastructure investment, a year-on-year increase of 16.4%; With the deployment of the "transportation power" policy and the country's six guarantees, it is expected that railway investment will continue to grow rapidly this year.
In addition, the Ministry of Water Resources stated that my country plans to focus on the construction of 150 major water conservancy projects from 2020 to 2022, with a total investment of about 1.29 trillion yuan, which will drive direct and indirect investment of about 6.6 trillion yuan. Driven by a series of policies, it is expected that the growth rate of infrastructure investment in the second half of the year will remain relatively fast and long, which will drive the boom of the construction machinery industry to continue to rise.
Real estate investment still has high resilience, and the post-cycle products of construction machinery usher in the peak period of upgrading. From January to May of 2020, the newly started area of housing was 700 million square meters, a year-on-year decrease of 12.8%; the cumulative completed real estate development investment was 4.6 trillion yuan, a year-on-year decrease of 0.3%. Since 2020, due to the impact of the epidemic, the newly started area of houses and the cumulative completed real estate development investment have both declined, but the decline continued to narrow in May; real estate investment still has high resilience, and real estate investment is expected to drive the construction machinery industry The effect will continue.
The last round of construction machinery sales peak period was from November 2008 to September 2011; generally speaking, the service life of an excavator is about 8 years. Since the end of 2016, the excavator will enter the peak period of stock equipment replacement. Directly accelerate the recovery of the construction machinery industry.
Truck cranes, concrete machinery, tower cranes, etc., as post-cycle products of construction machinery, lag behind excavators in recovery, and their lifespan is about 10 years. It is expected that the peak period of their renewal will continue in the next few years. On the other hand, the tightening of environmental protection policies, and backward models that do not meet emission standards are expected to accelerate the clearance, which will strongly promote the replacement tide.
