Event: according to the industry statistics of China Construction Machinery Industry Association, in February 2022, the 26 host manufacturing enterprises included in the statistics sold 24483 sets of various mining machinery products, a year-on-year decrease of 13.5%. Among them, the sales volume in the Chinese market was 17052 units, a year-on-year decrease of 30.5%; The export sales volume was 7431 units, a year-on-year increase of 97.7%.
Key investment points:
In February, the sales volume of excavators exceeded expectations: the sales volume in China decreased by 30.5% year-on-year, and the export sales volume increased by 97.7% year-on-year. CME had previously predicted that the sales volume of excavators in February decreased by 22% year-on-year, while the actual sales volume decreased by 13.5% year-on-year, exceeding market expectations. From the perspective of domestic and foreign sales structure, China's sales volume decreased by 30.5% year-on-year, benefiting from the steady growth demand, and the year-on-year decline narrowed; Foreign sales increased by 97.7% year-on-year. During the epidemic period, Chinese manufacturers improved their competitive position in the international market with the advantage of product cost performance, and the sales volume maintained a strong momentum. In terms of China's sales volume structure, 1537 units (≥ 28.5t) were sold in February, with a year-on-year decrease of 40.9%, accounting for 9.01%, and a year-on-year decrease of 3.34pct; The sales volume of medium excavation (18.5t ~ 28.5t) was 4000 units, a year-on-year decrease of 46.1%, accounting for 23.46%, a year-on-year increase of 0.66pct; The sales volume of small excavation (18.5t) was 11515 units, with a year-on-year decrease of 20.7%, accounting for 67.53%, and a year-on-year increase of 2.57pct. The year-on-year decline of all models has narrowed, in which the recovery of small excavation is faster, mainly benefiting from the improvement in the demand for small projects such as rural construction, municipal engineering and construction.
The annual GDP growth target is 5.5%, and infrastructure investment is expected to become the main starting point of economic growth. On March 5, the government work report set a target of 5.5% economic growth in 2022, higher than the 4.8% growth rate previously predicted by the IMF in January. As China's consumption under the export and epidemic situation still faces uncertain factors, under the triple pressure of "shrinking demand, supply shock and weakening expectation", in order to achieve medium, high-speed and stable growth on the basis of high base, infrastructure construction, as the economic driving force directly led by the government, is expected to become the main starting point of stable growth.
The issuance of local government special bonds continued to accelerate, providing financial guarantee for moderately advanced infrastructure investment. The growth of infrastructure investment is highly uncertain, and the demand for construction machinery is expected to continue to improve. By the end of February, local governments had issued 877.5 billion yuan of special bonds, accounting for 60.1% of the amount issued in advance. The issuance continued to accelerate, providing a strong financial guarantee for moderately advanced infrastructure investment this year. Superimposed on the implementation of some projects with about 2.5 trillion special bonds in the second half of last year, the certainty of infrastructure investment growth in 2022 is high. As the upstream of the infrastructure industry, the construction machinery industry is expected to benefit directly, and the marginal demand is expected to be continuously improved.
In the environment of increasingly stringent environmental protection policies, the general trend of electrification of construction machinery remains unchanged. The "national four" standard for non road mobile machinery will be fully implemented in December. It is expected that construction machinery is expected to usher in a small peak of replacement demand in 2022 and 2023, while electric construction machinery can achieve rapid development by virtue of its many advantages in policy support, operation cost and intelligent upgrading.
Investment strategy: under the main tone of China's steady growth, China's demand for construction machinery is expected to pick up marginally; After the rising product power of Chinese enterprises and the catalysis of the epidemic, the international competitive position of Chinese construction machinery enterprises is expected to continue to improve. We are still optimistic about the construction machinery sector and continue to pay attention to the leaders in the subdivided field of construction machinery. In the future, with the recovery of downstream infrastructure, it is expected to usher in a double hit market. Based on the above judgment, we believe that leading companies such as Sany Heavy Industry Co.Ltd(600031) , Xcmg Construction Machinery Co.Ltd(000425) , Zhejiang Dingli Machinery Co.Ltd(603338) , Hangcha Group Co.Ltd(603298) , Jiangsu Hengli Hydraulic Co.Ltd(601100) , etc. are expected to obtain excess alpha, and companies such as Zoomlion Heavy Industry Science And Technology Co.Ltd(000157) , Anhui Heli Co.Ltd(600761) , Yantai Eddie Precision Machinery Co.Ltd(603638) , etc. will also benefit.
Risk tip: the effective investment in infrastructure and real estate is less than expected, and the export demand of excavator is less than expected
