Event:
China Construction Machinery Industry Association released the excavator sales data in January 2022. In January 2022, the 25 main engine manufacturing enterprises included in the statistics sold 15607 excavators, a year-on-year decrease of 20.38%; Among them, 8282 units were sold in the Chinese market, a year-on-year decrease of 48.32%; The export sales volume was 7325 units, with a year-on-year increase of 104.90%.
Comments:
In January, the sales volume of excavator in China continued to decline year-on-year, and the export maintained a strong growth. In January 2022, 15607 excavators were sold, with a year-on-year decrease of 20.38% and a month on month decrease of 35.07%; China sold 8282 units, down 48.32% year-on-year and 46.30% month on month; The export sales volume was 7325 units, with a year-on-year increase of 104.90% and a month on month decrease of 14.97%. The monthly sales volume of excavators and China’s monthly sales volume have negative year-on-year growth for 9 consecutive months, which is mainly affected by the high base factor. It is expected that the year-on-year growth rate in April will turn positive. The rapid growth of export sales is mainly due to the recovery of overseas markets, coupled with the high cost performance of Chinese brand products and the enhancement of core competitiveness. Export sales are expected to maintain a high growth rate in 2022. In terms of sales volume, the sales volume of 1873 and 1023 units decreased by 40.50% and 40.50% respectively, compared with that of 1873 and 1029 units, respectively, with a year-on-year decrease of 43.50% and 40.50% respectively.
The number of capital construction projects started gradually increased, and the new special bonds played a role in steady growth. According to the incomplete statistics of Mysteel, 6634 projects were started in 20 provinces in China in January 2022, with a month on month increase of 33%; The total investment was 4.9 trillion yuan, an increase of 68% year-on-year and 8% month on month. After the new year’s Day holiday, major projects in many regions started successively, and the total investment of projects started in January increased significantly year-on-year. The Ministry of Finance issued in advance the new local government debt limit of 1.78 trillion yuan in 2022, including general debt limit of 0.32 trillion yuan and special debt of 1.46 trillion yuan. The new local debt wholesale in advance will be invested in infrastructure construction projects, which will promote economic and investment growth and play a role in stabilizing growth. In January 2022, the amount of newly issued local government bonds was 583.7 billion yuan, of which the amount of newly issued general bonds and special bonds were 99.3 billion yuan and 484.4 billion yuan respectively. More than 60% of the new special debt is invested in infrastructure projects, which are used for municipal and industrial park infrastructure, transportation infrastructure, agriculture, forestry, water conservancy, energy, urban and rural cold chain logistics infrastructure, etc.
Investment suggestion: in January 2022, the sales volume of excavators in China continued to decline year-on-year, and the export sales volume maintained a high growth rate. In January, the year-on-year growth of the number of capital construction projects started and the total investment accelerated, and the continuous issuance of new special bonds will effectively stimulate the demand for construction machinery and equipment. It is suggested to pay attention to the leaders in the construction machinery industry: Zoomlion Heavy Industry Science And Technology Co.Ltd(000157) (000157), Xcmg Construction Machinery Co.Ltd(000425) (000425).
Risk tips: macroeconomic downturn, decline in industry prosperity, deterioration of overseas trade environment, rise in raw material prices, less than expected issuance of special bonds, less than expected infrastructure / real estate investment, etc.
