Market Review
In the current period (from February 21 to March 25), the CSI 300 fell by 2.1% and the machinery sector fell by 1.5%, ranking 18 among the 28 Shenwan industries. In terms of subdivided industries, elevators increased the most, by 1.4%; Semiconductor equipment fell the most, down 6.7%.
This week’s view
The steady growth policy has been continuously promoted, and the demand for construction machinery in the peak season under the epidemic is optimistic.
Since the beginning of this year, the effect of the steady growth policy has begun to show, and the economic data from January to February released by the National Bureau of statistics is stronger than market expectations. From the perspective of infrastructure investment, from January to February this year, infrastructure construction investment (excluding electricity) increased by 8.10% compared with the same period last year, which is also the first time that the growth rate has been positive since May last year, which well reflects the requirements of “moderately ahead of infrastructure investment” and “forming more physical workload in the first quarter” proposed by the previous policy. Similarly, from the perspective of the issuance progress of special bonds, it was significantly accelerated from January to February this year. On March 23, the Ministry of Finance announced that 1077.6 billion yuan of new bonds were issued from January to February, including 2001 billion yuan of general bonds and 877.5 billion yuan of special bonds. In the same period last year, the local government did not issue new bonds. However, due to the recent outbreak of the epidemic, many provinces and cities across the country have been affected. From the historical data, the peak sales season of the construction machinery industry is March. In terms of the sales of excavators, the sales volume in March each year accounts for about 20% of the whole year, which is the peak month of sales. However, since the beginning of March this year, the epidemic has broken out in many provinces and cities across the country, which has seriously affected the commencement of infrastructure construction and the sales of construction machinery products, but we believe that the current situation is probably behind the demand, Similar to the situation at the beginning of 2020, with the epidemic gradually controlled and project funds in place, it is expected that the construction and sales from April to May will return to the reasonable level of the peak season. We are still optimistic that the infrastructure construction and construction machinery sales under the steady growth policy will exceed expectations!
Investment suggestions:
At present, the steady growth policy is advancing continuously. We are optimistic about the leading companies in the construction machinery industry, focusing on Sany Heavy Industry Co.Ltd(600031) , Jiangsu Hengli Hydraulic Co.Ltd(601100) , Zoomlion Heavy Industry Science And Technology Co.Ltd(000157) , Xcmg Construction Machinery Co.Ltd(000425) , Yantai Eddie Precision Machinery Co.Ltd(603638) , Zhejiang Dingli Machinery Co.Ltd(603338) , Shaanxi Construction Machinery Co.Ltd(600984) , etc!
Risk tips
Macroeconomic fluctuations, external demand fluctuations.
