The performance of construction machinery last year can be said to be seriously exceeding expectations. Prior to this, the industry expects that the wave of machine replacement has reached its peak in 2019, but the sales of construction machinery will again achieve substantial growth in 2020.
According to industry statistics from the China Construction Machinery Industry Association, the 25 mainframe manufacturers included in the statistics in 2020 will sell a total of 327,600 units of various excavation machinery products, a year-on-year increase of 39.0%; of which, the domestic market sales of 292,900 units, a year-on-year increase 40.1%.
In January 2021, excavator sales continued to be vigorous. The China Construction Machinery Industry Association conducted statistics on 26 excavator manufacturers. The data showed that in January 2021, a total of 19,601 excavators of various types were sold, an increase of 97.2% year-on-year; Domestic 16,026 units, a year-on-year increase of 106.6%, and exports of 3,575 units, a year-on-year increase of 63.7%. In addition, loaders increased by 52.4% year-on-year, and bulldozers increased by 55.4%.
The boom is still expected
Affected by the epidemic, the data for January 2020 is low. Some investors may think that this year's high growth was caused by last year's low base. In fact, even if the data for 2020 is deducted, the sales of the three products (excavators, bulldozers, loaders) in January of this year are actually higher than the levels in 2019. Therefore, industry insiders stated that the overall level in the first half of this year will remain an order of magnitude higher than the levels in 2019 and 2020.
Both domestic and foreign data show that investment changes in real estate and infrastructure directly affect the prosperity of the construction machinery industry. From the historical data, the sales volume of excavators is highly correlated with fixed asset investment, especially the amount of real estate development investment completed. By 2019, the annual compound growth rate of excavator sales is about 15%, and the compound growth rates of real estate investment and infrastructure investment in the same period are 15.8% and 16.1%, respectively, and the data basically match. From the third quarter of 2008 to the first quarter of 2009, investment in real estate development dropped significantly. During the same period, the sales of excavators dropped sharply, and the highest single quarter fell by nearly 30%. During the period from the fourth quarter of 2015 to the second quarter of 2017, the recovery of real estate investment Machine sales have increased significantly.
According to data, from January to December 2020, the fixed asset investment in the real estate industry increased by 5.0% year-on-year and continued to rebound. From January to December, the investment in infrastructure construction increased by 3.4% year-on-year, including the production and supply of electricity, heat, gas and water. Industry investment increased by 17.6% year-on-year. According to data from Komatsu, the utilization hours of Komatsu China's excavators in January 2021 reached 110.5 hours, a year-on-year increase of 87.0%, which is at a reasonable level. In the context of the economic downturn, it is difficult for the country's investment enthusiasm to fade.
On the other hand, China is the largest single market for construction machinery, but the per capita ownership of domestic construction machinery is still very low. Taking excavators as an example, the current per capita ownership of excavators in China’s construction industry is 334 units per 10,000 people, while Japan’s In 2017, the per capita ownership of excavators reached 1,344 units per 10,000 people, nearly four times that of China. With the aging of the migrant workers in China and the gap of the new generation of migrant workers, it is a general trend to replace manpower with more machines. These alternative demands constitute an incremental market for construction machinery.
At the same time, foreign construction machinery attachments are used in many situations. There are almost 30 commonly used types, but we may not use more than 5 commonly used types. With the further increase in labor costs and the increase in the level of attachment capabilities, the domestic use of attachments will further increase. The increase of this kind of attachment will not only drive its own growth, it will also affect the sales of the large product excavator, and further expand its application areas. In some areas where people are used, the excavator can go directly into battle after being equipped with appropriate attachments.
From the perspective of export, many media advertised that the export of excavators last year also maintained a relatively large growth. This must be explained. Last year, the export of excavators increased mainly in the number of units, with nearly 47,000 exported. Customs data showed an increase of 26.1%, while the total export value of construction machinery fell by 13.6%. The rate of decline varies from month to month throughout the year. There was a lot of decline in the early period, but it began to pull back in the next few months. The rate of decline was shrinking, and the final decline was 13.6%.
The main reason is that small products or some products with lower unit prices account for a relatively high proportion of exports. In January 2021, 3,575 excavators were exported. From last year's point of view, only December was above this data. The number of other months from January to November is less than the number of January this year. Industry insiders predict that in 2021 The export value may maintain a growth of about 10%.
At the end of last year, the Ministry of Ecology and Environment issued the ecological standards for construction machinery, which will be implemented around the end of next year. Judging by the current progress, some companies have also entered some substantive processes in technical preparations, and the switch of emission standards will also promote the change. Machine tide.
The Matthew effect becomes more obvious
After the reshuffle of the industry downturn, the concentration of the construction machinery market has further increased, coupled with the demand for equipment replacement (products basically need to be updated during the peak sales period of 2009-2013), the industry has stepped out of the trough, and the overall profitability has improved significantly. The leading share of domestic construction machinery is relatively stable, and the leading position will continue to be maintained in the future. From the perspective of the market structure, the competitive landscape of the domestic excavator industry has undergone great changes since 2009. With the improvement of the comprehensive competitiveness of domestic brands, the cost-effective advantages of products have gradually become prominent, and the market share has continued to expand.
For the whole year of 2020, foreign-funded excavator sales accounted for 37.4%, which fell to 30.6% in January this year. Before 2002, the domestic excavator market was almost monopolized by foreign capital, and the domestic excavator market share was less than 10%. Domestic brand excavators have gradually realized the substitution of foreign brands from scratch. As of 2020, the total share of the five leading companies Sany, Xugong, Carter, Liugong, and Lingong is 71.73%. If the foreign-funded Carter is removed, the market share of the remaining four domestic companies is 61.91%, the concentration is still very high. Since last year, Zoomlion has also begun to vigorously develop its excavator business, and plans to make up for the shortcomings of earth-moving machinery. The excavator business will achieve a market share of more than 2% in the first year. The company is the last to impact the competitive landscape of the excavator industry. A variable.
Compared with the field of excavators, domestic concrete machinery is more concentrated and presents a pattern of duopoly competition. SANY and Zoomlion’s concrete pump trucks have a combined market share of more than 50%, and they are in Gaomi where the arm length exceeds 50 meters. The total market share of end-pump trucks exceeds 90%.
The truck crane industry has a clear competitive landscape. The three major manufacturers of XCMG, Zoomlion, and Sany have outstanding market competitiveness. Compared with other manufacturers, the market share of CR3 has exceeded 80% in the past 10 years, and the market share has further increased to 90% in the past two years. Above, industry concentration has increased. In the past few years, XCMG has occupied half of the truck cranes for a long time, and its market share has exceeded the sum of Zoomlion and SANY. Since the recovery of the current economic cycle, XCMG's market share has gradually declined. Zoomlion and SANY rely on differentiated product technology innovation and The market share of the high-quality sales service system continues to increase, and the share gap between the three main OEMs is gradually narrowing. In 2020, XCMG’s market share will fall to about 36%, and Zoomlion and Sany will increase to about 30% and 26% respectively. The industry competition pattern of "dividing the world" is basically established.
It can be seen intuitively from the data that key construction machinery such as excavators, concrete machinery, and cranes have been basically monopolized by the top companies, and small and medium-sized enterprises have no room for survival.
On the other hand, in the international market, the strength of local giants continues to improve. Take Sany Heavy Industry, a representative company in the industry, as an example. From 2017 to 2019, the company's per capita revenue was 270.94, 321.13, and 4.1011 million yuan, an increase of 60.14% and 18.52 year-on-year. %, 27.71%, showing a rapid growth trend. In 2017, it exceeded Komatsu 2.3762 million yuan, which was 14.02% higher than Komatsu. In 2019, it exceeded Caterpillar's 3.6339 million yuan for the first time, which was 12.86% higher than Caterpillar.
In the past, in the course of cyclical market fluctuations, the competitive landscape of the construction machinery industry has been continuously optimized, and the market share of leading companies has further increased. The current cyclical volatility of the industry has been converged, which will help improve the valuation of leading companies in the context of high performance certainty.
