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Construction Machinery: Full recovery of the industry |
Public date:2018-3-17 Hits：7324 |
In the four Juglas cycles since the United States began in 1982, the overall fluctuations of the machinery and equipment industry are much higher than the fluctuations in the growth rate of GDP and fixed asset investment. Since the end of 2016, the view of the opening of a new round of the global Juglaring cycle has been In the market, it is widely discussed that the construction machinery industry is facing a full recovery. In addition, environmental protection policies promote product renewal, stable growth in infrastructure investment, and implementation of the “Belt and Road Initiative” also provide new impetus to the development of the industry.
Judging from the stock price performance, in the past six months, the price trend of individual stocks in the construction machinery sector has significantly outperformed the market, benefiting from the increase in product prices and sales volume. Recently, due to the impact of global financial market turmoil, there has been a large correction. Once the stock market stabilizes, the related Leading stocks or an ideal mid-line buying opportunity.
Juglas cycle force
In terms of historical sales, the global sales of construction machinery experienced a positive growth for the first time in 2016 after experiencing a decline for five consecutive years. According to statistics, excavator sales in the world increased by 1.73% year-on-year in 2016, and it is expected to reach 24% in 2017. According to this market analysis, domestic construction machinery started a new round of the Zhu Gula cycle from the second half of 2016. From 2006 to 2016, construction machinery experienced a ten-year complete cycle of substantial expansion of production capacity to basically clearing inventory. Ten years can be divided into three phases:
1) From 2006 to 2009, with a large number of investment in real estate and infrastructure construction, construction machinery also entered the investment cycle. The net value of fixed assets in the industry continued to increase. The total value of fixed assets and construction-in-progress of key enterprises in construction machinery continued to increase. Capital in 2009 The growth rate of expenditure exceeds 30%.
2) From 2010 to 2011, construction machinery will enter the production capacity and credit expansion period. The high profitability in the previous period and the continuous increase in downstream demand stimulated major manufacturers to produce a large amount of production, and attracted customers by reducing the down payment ratio of credit sales and extending the repayment period.
3) 2012-2016 is the destocking period of the industry. During the five years, sales of main products of construction machinery declined year by year. Under the squeeze of the secondary market, the core host manufacturers' operating income and gross profit margins decreased, and the accounts receivable turnover rate and inventory turnover rate also fell sharply. Some of the core OEMs had to achieve capacity reduction and report restoration by reducing capital expenditures and selling receivables.
From July 2016, sales of the construction machinery industry began to rebound. The year-on-year growth rate of monthly sales of excavators exceeded 10%. Compared with 2016, excavator sales doubled in November 2017, and crane sales in October 2017 also increased by 153% year-on-year. At present, the growth rate of construction machinery remains low. Some industry insiders believe that according to the logic of matching with GDP growth, there has been a scissor gap in the amount of construction machinery.
For the logic of demand side of construction machinery, different factors have also been added in this new round of cycle. First, the “One Belt and One Road” initiative has brought a lot of overseas demand. Most of the countries along the “Belt and Road” countries are lagging behind in infrastructure construction and there is a huge market for construction machinery. The “Belt and Road” projects are mostly long-term projects and are expected to bring about continuous output of production capacity in the next three years. The second is the need for equipment replacement brought by environmental pressures in the new era. In response to the goal of “energy saving, emission reduction and green manufacturing”, some equipment that do not meet environmental protection standards will also exit the market and face upgrading. Third, investment in infrastructure construction has grown steadily. Infrastructure investment has always maintained a growth rate of around 15%, creating new demand. The PPP model has been continuously improved and standardized during the development process, and a large number of government projects have been launched. Take the excavator as an example, the sales volume trend in 2017 is basically in line with the growth rate of PPP investment growth.
Looking into 2018, the world's major construction machinery market is expected to continue its recovery. In 2016, demand for construction machinery in emerging countries represented by India increased, and sales in developed regions such as North America and Japan also picked up. In 2017, the year-on-year growth rate of excavator sales in China reached 99%. In the future, investment in downstream infrastructure construction in the emerging countries represented by China and India is expected to maintain high growth, thereby injecting continuous momentum into the recovery of the construction machinery market.
Selected leading stocks
Recently, due to the turbulence in the global stock market, market adjustments have been large, and the number of high-quality leading stocks in a number of sub-industries has fallen even further. Judging from the performance forecast, many companies have experienced rapid growth in performance. From the perspective of industry growth space and company competitiveness, related companies still have certain configuration values.
In the construction machinery industry, sales of excavators and loaders are far higher than those of concrete machinery and other road machinery. In the field of construction machinery, they have a light weight. Therefore, we must not only look for high-quality stocks from the field of excavator subdivisions, but also research excavators. The sub-sector is of great significance to the research of construction machinery as a whole. According to brokerage estimates, if the excavator's eight-year average life expectancy is estimated, the excavator in 2018 is expected to release 160,000 units. It is worth noting that the world-famous leading company Komatsu will raise Komatsu's full-model prices since January 1, 2018, while domestic manufacturers Sany Heavy Industry, Liugong and Xugong Machinery have expressed follow-up price adjustments. The reasons for this price increase include not only the increase in cost of raw materials at the cost end and the strong downstream demand at the income end to provide substantial support for price increases, but more importantly, the increase in industry concentration. As mentioned above, the industry's competitive landscape has substantially improved in the past five years. The market share of leading companies has generally increased and their bargaining power has increased. According to statistics, by the end of 2017, the market share of CR4 for large digging, middle digging, and small digging has all exceeded 50%, and CR8 has reached 85% or more. Manufacturers are more likely to reach a unified alliance, thereby realizing collective price increases, and Performance has greatly boosted.
From a sound point of view, investors can focus on Sany Heavy Industry (600031). In 2009, the market share of the company's excavator products was less than 7%, and it has continued to rise to about 22% by 2017, which fully demonstrates the company's product competitiveness. As the leading domestic construction machinery industry, the company is expected to fully benefit from the economic recovery of this round of industries, and with the further expansion of overseas markets, the performance in 2018 is expected to rise to a higher level. Looking at the secondary market trend, the stock price has recently returned to the vicinity of the current year. Currently, Sany Heavy Industry's share price is still in an upward trend. If it is effectively stabilized near the year line, investors may wish to participate in the wet storage, but once it is broken, investors Still need to abide by the transaction record to consider stop loss issues.
Xugong Machinery (000425), which has a relatively large stock price flexibility in the short-term, is also worthy of attention. As an industry leader, especially in the fields of truck cranes, road surface equipment, and piling machinery, the company has maintained the leading position in China for the first time in many years, concrete machinery and shoveling machinery, and fully enjoys the dividends of the industry's high degree of prosperity. The trend of future industry competition is Concentrated industry leaders, domestic alternative imports, the company's main business development momentum is good. As for the stock price trend, the short-term retracement rate is relatively large, and in the current situation of market instability, it is an option with both offense and defense.
Investors with higher risk appetite may be concerned about the recent uptrend of Liu Gong (000528). The company recently announced a pre-addition growth announcement: In 2017, the net profit attributable to shareholders of listed companies was 305 million yuan to 330 million yuan, an increase of 519% from the same period last year to 569%, of which the net profit of the company in the fourth quarter was between 26 million and 51 million yuan. The same benefit from the overall recovery of the construction machinery industry, but because the market value is smaller than the previous two, so the stock price flexibility is greater, investors with higher risk appetite can be actively concerned.
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