Adjustment of construction machinery industry to deepen leading enterprises is expected to benefit

The industry adjustment that started in the construction machinery industry last year has already made the differentiation of the company's camp more and more obvious. Liugong and Shantui have issued pre-reduction announcements; according to the CICC forecast, leading companies such as Sany Heavy Industry and Zoomlion are expected to achieve growth of 10% to 15% and complete their full-year forecasts.

The good news is that under the policy dividend of "steady growth" in the second half of the year, infrastructure construction is picking up, new construction starts will increase, and construction machinery sector is expected to bottom out. "It is expected that by the third quarter of this year, about 8 or 9 months, there will be a certain recovery of demand." Wealth Li, the senior investment analyst for the construction machinery industry in Lyon, believes that leading companies such as SANY will benefit from the industry adjustment and recovery process. .

Performance Polarization In the first half of the year, most construction machinery companies have been sad for their days. The data shows that in the first quarter, the cumulative operating income of 9 listed companies in the national construction machinery industry totaled 45.2 billion yuan, a year-on-year decrease of 12.7%, the lowest since 2009. However, shuffling at the same time, the performance of construction machinery companies also showed differentiation. According to the survey data of China International Capital Corporation, Sany Heavy Industry is still able to achieve a positive growth of 20% in the first half of the year, benefiting from the start of affordable housing and channel sinking. It is the biggest beneficiary. The excavator business situation is similar. The relative market share of Sany Heavy Industry excavators was 12.2% at the end of last year, 16% in the first quarter of this year, and increased to 18% in the first half of this year.

The cash flow of some leading companies is also relatively optimistic. Taking Sany Heavy Industry as an example, its net cash flow from operating activities in the first quarter was an outflow of RMB 4.3 billion, which is a seasonal factor. Judging from the disclosures made by Sany Heavy Industry in 2010 and 2011, the operating cash flow in the first quarter was relatively high. Bad period, and will gradually improve in the second quarter, such as operating cash flow in the first quarter of 2011 -34.05 billion yuan, the second quarter was 3.608 billion yuan.

Considering that the company's operating scale is quite different, the indicator of accounts receivable turnover rate can more accurately reflect the status of the enterprise than the absolute value of accounts receivable. In the first quarter of 2012, the balance of receivables of Sany Heavy Industry was RMB 20,502 million, and the turnover rate of receivables in the first quarter was 0.898 times, which was the industry leading level.

The market bottomed out Despite the poor performance of the industry in the first half of the year, various phenomena revealed that the market has passed its most difficult period.

"From the situation I have grasped in June, many companies have seen a month-on-month growth," said Su Zimeng, secretary general of the China Construction Machinery Industry Association. Market monitoring showed that the sales of main excavators of the industry in May was 10,870 units in May, a year-on-year decrease of 24%, and the decrease rate of about 40% from the previous April had been significantly narrowed. The sales of key enterprises Sany Heavy Industry and Liugong etc. The growth rate has been positive.

In addition, monetary policy has gradually relaxed. On July 5, the central bank announced that it would cut interest rates starting from July 6 and cut interest rates less than a month from the last time on June 8. According to estimates, a reduction of 0.31% in the loan interest rate will increase the listed company's net profit in 2012 by 1.12% year-on-year. At the same time, lower financing costs will reduce the cost of customer purchases, which will help the industry release potential demand.

In the second quarter, GDP grew by 7.6% year-on-year, for the first time in 12 quarters, it broke “8.” The follow-up policy tone should be “8.” In addition, the CPI in June rose by 2.2% year-on-year, also leaving behind the introduction of “stable growth” economic stimulus policies. space.

With the restart of a number of major infrastructure projects such as railways and water conservancy, the demand for major products will gradually improve in the second half of the year. Galaxy Securities even anticipates that as one of the most profitable products in the industry, the sales growth of concrete pump trucks in 2012 is expected to reach 20%. Su Zimeng believes that overall, China's construction machinery market will grow steadily this year, and the 12% increase is more reasonable.

Li Qianlong, a strong enterprise manager, said that in the current intense competition in the industry, companies that can maintain a certain gross profit margin are certainly companies with very good cost control. In the process of market consolidation during the industry adjustment period, large-scale enterprises will benefit from it. CIC Securities believes that in the long-term, market share will continue to be concentrated in leading companies such as Sany Heavy Industry, leading companies will become increasingly dominant.

Taking concrete machinery as an example, commodity concrete is being promoted to prefecture-level cities, sales channels are sinking, and industry barriers to entry are high. In addition to Sany and China United, there are no new and powerful enterprises to enter. With the increase in customer arrivals at the downstream mixing plant, the new station will increase the demand for equipment, and leading manufacturers will have a strong position in the industry chain.

In the case of slowing domestic investment, foreign markets are even more of a place for companies to "save." Su Zimeng said that this year's export growth will be better than the previous two years, reaching more than 30%. It is worth mentioning that Sany Heavy Industry's export of all products in the first half of the year even increased by 130%. In the export strategy, Sany, Xugong, Liugong, and China United have all implemented cross-border acquisitions. Through mergers and acquisitions, the proportion of future industry leading company exports will reach 30% to 40%.