In the face of rising raw material prices and tight supply chain, the construction machinery industry is still in the adjustment cycle since the beginning of the year, and the total sales volume of excavators has fallen for five consecutive years year-on-year.
4. In May, the sales of construction machinery related industry chains were still unsatisfactory, the new order was inferior to the same period of previous years, and the Q2 industry data was expected to warm up or failed. However, many insiders believe that the worst may have passed. The policy transmission cycle generally lags 2-3 months, and the trend judgment of "low before high" in the construction machinery industry this year remains unchanged.
Domestic sales fell year-on-year for 14 consecutive months
Construction machinery is mainly used in the three downstream fields of infrastructure, real estate and mining, of which infrastructure is the most widely used. "The current situation of architectural decoration is not ideal. May was the peak season in previous years, but there are not many new orders this time of year. Compared with the same period last year, it is worse. The current situation is not optimistic." Hunan is engaged in building decoration engineering industry said.
"On the one hand, the operating rate of stock projects is not high, on the other hand, there are not many incremental projects." An insider engaged in municipal road and Bridge related projects disclosed.
According to the latest data on the wechat official account of China Construction Machinery Industry Association on the evening of June 8, the total sales volume of excavators in May this year was 20624, a year-on-year decrease of 24.2%. Among them, the domestic sales volume was 12179 sets, a year-on-year decrease of 44.8%; The overseas sales volume was 8445 sets, a year-on-year increase of 63.9%. Domestic sales fell for the 14th consecutive month.
Excavator data is the "barometer" of construction machinery. From January to March 2022, the cumulative sales volume of excavators was 77175 units, a year-on-year decrease of 39.2%; Among them, there were 51886 sets in China, a year-on-year decrease of 54.3%; 25289 sets were exported, a year-on-year increase of 88.6%. 4. In May, it decreased by 47.3% and 24.2% year-on-year respectively, and the decline began to narrow in May.
Statistics show that in the first quarter of this year, the revenue of the machinery industry fell slightly year-on-year, and the net profit attributable to the parent company fell significantly under the high base of last year: in 2022, the machinery industry realized a total revenue of 354.418 billion yuan in Q1, a year-on-year decrease of 0.4%; The net profit attributable to the parent company was 22.365 billion yuan, a year-on-year decrease of 22.39%; The net profit not attributable to the parent company was RMB 19.06 billion, a year-on-year decrease of 25.68%.
Taking Hengli hydraulic as an example, the Q1 revenue and net profit of this year decreased by 22.97% and 32.56% respectively. It is mainly due to the decline in the prosperity of downstream industries. The sales volume of the company's main products fell, of which the revenue of excavator cylinder products fell by 22% year-on-year.
The sales of Q2 is expected to be worse than that in the first quarter under the interference of the epidemic (since the second quarter). As for whether the strengthening of infrastructure can drive the industry to warm up, he believes that the situation of Companies in the industry is similar, and the main engine plant is the first to feel the change. There is inventory between the industrial chains. Only after the terminal sales, the order changes of the OEMs will be reflected.
A relevant person from a construction machinery main engine factory said that the poor sales data in the first two months of Q2 had something to do with the recurrence of the epidemic since April, which would have an impact on the operating rate, logistics, supply chain, etc. But he also said that now the construction machinery industry has reached the bottom.
Industry growth rate from negative to positive or extended to Q3
In the first five months of this year, the sales data of excavators were "hot outside and cold inside". According to the analysis of insiders, the sales situation in the foreign market this year is indeed good, but the main market of leading machinery enterprises is in China. The future growth rate still depends on the recovery progress of the domestic market.
On April 26 this year, the 11th meeting of the central financial and Economic Commission was held. The meeting pointed out that infrastructure construction should be comprehensively strengthened. In the view of the industry, this is a setting tone for relatively high infrastructure construction, which is crucial to stabilizing the economic fundamentals.
In this regard, insiders of the above road and bridge projects said that it will take some time from the release of the policy to the specific implementation. Now it is early June, and there will be a certain time difference. In addition, a leaseholder of construction machinery and equipment said that the repeated epidemic had led to the stagnation of many projects, which directly led to the decline of equipment rental rate, and the company's operation was not good in the first half of the year. Now that the epidemic situation is under control, it must be stronger than in the first half of the year.
It was learned from the annual shareholders' meeting held by Zoomlion recently that the prices of bulk raw materials and transportation costs have increased significantly, putting great pressure on the industry's gross profit margin and net profit margin. The company has carried out relevant diversified layout around the main equipment manufacturing industry. Last year, the emerging sector accounted for more than 1/5 of the company's revenue, an increase of nearly 6 percentage points over 2020.
The relevant person in charge of Zoomlion believes that the cross cycle adjustment of the national macro-economy and the implementation of "steady growth" measures objectively need a transmission process from the national economic development policies and monetary and financial support to the growth of business orders of engineering construction companies and the formation of physical workload, and then to the new procurement of building materials and even engineering machinery equipment.
XCMG machinery, which is close to the market value of Zoomlion, also said at the performance meeting in mid May that the domestic epidemic fluctuation had a certain impact on the first half of the year, but the company expected that the infrastructure investment and major projects would only be delayed, not reduced, but increased. It is expected that 2022 will show a trend of low before high. Some of the market influencing factors are continuous and some are phased. For example, the cost of freight and storage has more than doubled, but it will return to normal.
According to the analysis of the Research Report of Anxin securities, the recovery of industry demand depends on the strength of infrastructure policies. According to the calculation of the proportion of monthly sales of excavators in the past five years, under the neutral expectation (the annual industry growth rate dropped by 10%), it is expected that the industry growth rate is expected to change from negative to positive in August with the release of early backlog demand and the relief of the pressure of superimposed high base. In addition, the mechanical researchers of securities companies are more optimistic. They believe that as the "damping" of the epidemic decreases, June will be the inflection point of upward sales.
