Investment Event: Premier Li Keqiang presided over the executive meeting of the State Council on February 14, listened to the report on the handling of the proposals proposed by the national two sessions in 2021, determined to promote the steady growth of the industrial economy, and proposed (1) for the new equipment and appliances purchased by small, medium and micro enterprises with a value of more than 5 million yuan this year, the depreciation of which is 3 years can be deducted before tax, and the depreciation is 4, 5 years The 10-year deduction can be halved and the tax deferment policy for small, medium-sized and micro enterprises in the manufacturing industry will be extended; (2) Guide and strengthen financial services, provide incentive financial support from the people’s Bank of China, increase inclusive small and micro loans, and promote the rapid growth of medium and long-term loans in the manufacturing industry; (3) We will strengthen and supplement the manufacturing chain and rebuild the industrial infrastructure, accelerate the construction of new infrastructure and the transformation of energy-saving and carbon reduction technologies in key areas, and expand effective investment.
Tax reduction policies and financial support are expected to promote small, medium-sized and micro enterprises to increase equipment investment and benefit the market demand of industrial machine tools. Steady growth is the main line of this year, and steady growth focuses on steady investment. We believe that in addition to infrastructure investment, manufacturing investment is also the focus of policy support this year. Last year, the growth rate of manufacturing investment reached 13.5%, which is the main force to stimulate fixed asset investment. This year, it is expected to continue to undertake the mission of stimulating fixed asset investment throughout the year. In January, the PMI of manufacturing industry was 50.1, which was above the balance line of prosperity and decline. It is expected that the expansion trend of manufacturing industry will continue. The national Standing Committee proposed that the pre tax deduction of equipment and appliances newly purchased by small, medium-sized and micro enterprises with a value of more than 5 million yuan and the guidance to strengthen the metal loan support for small, medium-sized and micro enterprises can effectively solve the problems of cash flow and cost reduction of small, medium-sized and micro enterprises and expand effective investment. The implementation of the policy will drive the demand for industrial mother machine products, including machine tools and injection molding machines.
China’s machine tool industry is large but not strong, the high-end needs to be broken through, and the industrial concentration is expected to increase. According to Gardner intelligence, China’s machine tool consumption in 2020 was US $21.3 billion (RMB 135 billion), accounting for about 31.9% of the world. In 2021, China produced 602000 metal cutting machine tools, with a year-on-year increase of 29.2%, and 210000 metal forming machine tools, with a year-on-year increase of 0.5%. Although China is a large machine tool country, it is large but not strong. The core parts of machine tools such as CNC system and high-end machine tools such as five axis CNC machine tools still rely heavily on imports. And the industry concentration is low. As of November 2021, there are still 931 metal cutting machine tool enterprises and 544 metal forming machine tools in China, and the enterprises in the industry are generally small. With the promotion of strengthening and supplementing the manufacturing chain, the industry concentration is improved and the development trend towards high-end is clear.
Under the background of the recovery of manufacturing investment, the boom of injection molding machine is expected to continue. Injection molding machine enterprises cut into the new application of large and super large die-casting machines and expand market space. In the first half of 2021, the injection molding machine industry had full orders under the manufacturing investment boom, and the supply was in short supply. In the third quarter, the boom slowed down with the decline of the manufacturing boom. We believe that under the background that the investment boom of manufacturing industry is expected to continue, the demand boom of injection molding machine will also continue. The pattern of injection molding machine industry is relatively stable. While stabilizing the injection molding machine business, leading Haitian International and Guangdong Yizumi Precision Machinery Co.Ltd(300415) are involved in large and super large die-casting machines, which are expected to open up market space under the integrated die-casting process of new energy vehicles.
Investment suggestions: continue to be optimistic about the investment opportunities in the manufacturing investment chain, and industrial mother machine products continue to benefit. The recommended targets of machine tools are Guangdong Create Century Intelligent Equipment Group Corporation Limited(300083) , Ningbo Haitian Precision Machinery Co.Ltd(601882) , Kede Numerical Control Co.Ltd(688305) , Qinchuan Machine Tool & Tool Group Share Co.Ltd(000837) , Nantong Guosheng Intelligence Technology Group Co.Ltd(688558) , Jiangsu Yawei Machine Tool Co.Ltd(002559) ; The recommended targets of injection molding machine are Haitian International and Guangdong Yizumi Precision Machinery Co.Ltd(300415) .
Risk tip: the growth rate of manufacturing investment is lower than expected, and the industry competition intensifies.
