Editor's note: since the beginning of this year, a number of data indicators of the construction machinery industry have bottomed out and rebounded, while the share prices of leading listed companies have "fallen endlessly". Is this deviation a false prosperity of the industry or a misjudgment of the market?
With such problems in mind, securities times [industry E-line] recently conducted field research on Sany Heavy Industry Co.Ltd(600031) , Zoomlion Heavy Industry Science And Technology Co.Ltd(000157) , Xcmg Construction Machinery Co.Ltd(000425) and other industry leading listed companies, and conducted in-depth exchanges with industry experts, striving to present readers with comprehensive, true and accurate information from the aspects of industry data, production site, expert views and investment logic for reference.
The data of the construction machinery industry is improving, but the share prices of Listed Companies in the industry have stepped out of the "collapse".
According to the data of Dongcai choice, since last year, the tertiary index of Shenwan construction machinery has plummeted from a high of 174533 points to a minimum of 911.66 points, and the maximum decline is close to halving. Specific to individual stocks, the decline was even worse.
In fact, a number of data of the construction machinery industry have bottomed out and rebounded this year, but the stock price trend still deviates from the industry fundamentals. Is it the curse of the industry cycle or the limited growth space of listed companies? With these questions, the reporter of securities times · e company recently conducted field research on the three leading enterprises in the industry: Sany Heavy Industry Co.Ltd(600031) , Zoomlion Heavy Industry Science And Technology Co.Ltd(000157) , Xcmg Construction Machinery Co.Ltd(000425) , to find out.
In the interview, the reporter of securities times · e company learned that the national infrastructure construction data rose steadily in the first two months, the business fundamentals of the industry were stable and upward, the overseas market was forming effective support, and the trend of medium and long-term logic electrification was also promising. Although March was affected by the covid-19 pneumonia epidemic, it did not affect the industry's judgment that the trend of this year was "optimistic": the epidemic may block the process, but the trend of "first low and then high" throughout the year remained unchanged.
For the stock price trend of relevant listed companies, insiders told the reporter of securities times · e company that construction machinery, as a "heavy weapon" of national manufacturing industry and one of China's internationally competitive industries, "has not obtained a valuation matching its status for the time being". According to choice data, the average dynamic PE (price earnings ratio) of the construction machinery sector is about 17 times, and the dynamic PE of the above three leading enterprises is less than 9 times.
Busy "plant 18"
On March 17, a reporter from the securities times came to Sany Heavy Industry Co.Ltd(600031) plant 18 in Changsha Economic Development Zone. The factory is known as "the smartest factory in the world" and is a model of Sany Heavy Industry Co.Ltd(600031) digital manufacturing.
Sany Heavy Industry Co.Ltd(600031) 18 plant has a beautiful internal environment
Because of covid-19 pneumonia epidemic prevention and control, the reporter came to the gate of the factory through multiple epidemic prevention and inspection procedures. Looking inside, you will find that the layout here is very different from that of traditional factories.
Plant 18 was built by connecting two old plants. In the plant with a length of about 1000 meters and a width of about 100 meters, each process is arranged in parallel from north to south. Except for some assembly stations, there are not many workers in other production lines. In the flexible production island of the factory, more than 100 Siasun Robot&Automation Co.Ltd(300024) operate accurately and orderly.
Sany Heavy Industry Co.Ltd(600031) Cui Jingkui, director of the board secretary office, told the securities times that with the digital blessing, the factory has realized the whole process of automatic production from a steel sector to a complete vehicle, and it takes only 45 minutes to offline a pump truck.
In the middle of the plant is a 46 meter long and 26 meter high intelligent screen. Cui Jingkui introduced that the big data management platform can not only view the operation and management data of Sany production workshops all over the country, but also view the operation status of each machine in the workshop, and know the operation rate, utilization rate and timely maintenance rate of the sold equipment.
Sany Heavy Industry Co.Ltd(600031) it is based on the massive collection of equipment big data that released the "excavator index". The data should be reported to relevant national departments every month, which has become one of the basis for government departments to formulate macro policies, and is known as the "barometer of China's economy".
The reporter saw on the smart screen that the total number of network access devices was 785000, and the number of real-time online devices on that day was 249900. "Compared with the end of last year, the workshop has been busy now. The production capacity in March has increased significantly compared with that in January." The above industry insiders said, but now it is certainly not the peak state of production. Last year, the maximum monthly production reached nearly 800 units.
High Machinery Industrial Park operating day and night
On March 21, the reporter rushed to Zoomlion Heavy Industry Science And Technology Co.Ltd(000157) Wangcheng Industrial Park in the rain, which mainly produces high-altitude operation machinery (hereinafter referred to as high-altitude machinery), a sub category of construction machinery.
Entering the park, the reporter found that employees were lining up for nucleic acid testing Wang Jian, deputy general manager of Zoomlion Heavy Industry Science And Technology Co.Ltd(000157) intelligent aerial work machinery company, said that although the park requires full testing, it is not in the control center of covid-19 pneumonia epidemic in Changsha and "production has not been affected".
The reporter followed Wang jianlai to the scissor type high-rise machine workshop. The production line is full of welding Siasun Robot&Automation Co.Ltd(300024) , AGV (automatic guided transport vehicle), RGV (rail guided vehicle), air EMS transmission line and other equipment. The production process is mainly automatic and intelligent.
Wang Jian revealed that because Gaoji is the construction machinery with the fastest sales growth in recent years, the domestic and foreign markets broke out at the same time, resulting in a serious shortage of production capacity, "we are increasing production capacity through personnel recruitment and technological transformation investment".
Wang Jian introduced that at present, the workshop adopts one shift system, and some adjustments are being made. In April, the production capacity will increase by 70% on the existing basis. Under the booming production and marketing, Wang Jian said that this year's target output value will double that of last year.
The reporter saw that the northeast corner of the factory was full of packed scissor type high-rise machines. Wang Jian looked down at the label on the package and said that these products were sold to Brazil. At present, the overseas orders of Zoomlion Heavy Industry Science And Technology Co.Ltd(000157) intelligent high-speed machines have reached more than 400 million yuan.
In terms of the Chinese market, Wang Jian said that the markets in South China and East China continued to expand, and the demand for high-speed machines in the northwest region, especially in Xinjiang, has increased greatly since the beginning of the year. The order volume in the first quarter has exceeded that in the whole of last year.
Walking to the gate of the factory, logistics trucks waiting for product loading have been lined up at the gate of the park. Because of the great increase in market demand outside China, logistics has to transfer goods day and night. Wang Jian said that the production line will soon be moved to Zoomlion Heavy Industry Science And Technology Co.Ltd(000157) smart industry city, and two production lines will be added at the same time. "In this way, the problem of production capacity can be solved".
Infrastructure construction drives the annual "low before high"
The downstream of construction machinery is mainly infrastructure construction, real estate, mining, etc., with demand accounting for 45%, 20% and 20% respectively. From the perspective of short-term logic, construction machinery is most affected by infrastructure investment.
Sany Heavy Industry Co.Ltd(600031) chairman Xiang Wenbo predicted that 2022 may be a better year for the construction machinery industry. "At the end of last year, the central economic work conference clearly proposed to carry out infrastructure investment moderately in advance, which will be a very significant opportunity for the construction machinery industry.
”
In addition, the target of GDP growth this year is 5.5%. Respondents generally believe that the policy of "steady growth" for the whole year has been very clear.
So, for enterprises, what is the start-up progress of "moderately advanced infrastructure investment" and when will it be transmitted to the construction machinery industry?
"Since the beginning of the year, the operating rate has been rising every week, even better than last year", Sany Heavy Industry Co.Ltd(600031) Board Secretary Cai Shenglin said that the operating rate of excavators has been higher than 70%.
However, due to the recent repeated covid-19 pneumonia epidemic, the operating rate has decreased in some regions due to the tightening of epidemic prevention policies. Many business people told reporters that, as in 2020, the demand driven by infrastructure investment can only be delayed by the epidemic, but will not disappear. This is also the underlying logic of the industry's "low before high" trend throughout the year.
"Generally speaking, the current infrastructure construction data match the moderately advanced policies," Cai Shenglin said. The industry is heating up, "a pot of water is already burning".
Looking back at the industry curve in 2020, after the epidemic was controlled in March, the compensatory demand for construction machinery and equipment was released, the national infrastructure investment continued to increase, and the annual growth rate of the industry reached 30%, becoming the "big year" of the construction machinery industry.
Xcmg Construction Machinery Co.Ltd(000425) people told reporters that after the announcement of the investment list of major projects, they also have to go through the stages of project planning and fund-raising. "Construction machinery will be purchased only after entering the bidding process. At present, it is not clear that infrastructure investment has a great pulling effect on sales."
Considering the impact of epidemic prevention and control, Cai Shenglin believes that the above transmission time needs about one month to one quarter. If the operating rate continues to rise, the construction machinery will gradually enter the peak sales season in the second quarter as soon as possible.
"Overall, we feel that the prosperity of the industry is OK this year". According to Xcmg Construction Machinery Co.Ltd(000425) the above people, the sales of the company may change structurally this year: at present, the sales of excavators, mixers and lifting machinery are generally, but the sales growth of lifting machinery, compaction machinery, pavement machinery and fire prevention machinery is good. In particular, it is worth mentioning that the business of aerial work platform has doubled every year, "Coupled with the significant improvement in exports, we think the sales growth this year can be expected."
Overseas markets are worth looking forward to
The overseas market has been the structural highlight of the construction machinery industry since the second half of last year. Data show that last year, the export sales volume of excavators was 68400, a year-on-year increase of 97%. At the beginning of this year, compared with domestic sales, exports still maintained a high growth trend.
"The export data from January to February exceeded expectations." Cai Shenglin said that the better phenomenon is that the gross profit margin of international exports this year has been higher than that of China, "which shows that the competitiveness of exported construction machinery has increased significantly and began to enter the global medium and high-end market."
Xcmg Construction Machinery Co.Ltd(000425) this year's export business performance is also excellent. Before that, the one main market for Xcmg Construction Machinery Co.Ltd(000425) one was "one belt, one road", accounting for 65%~70%. Now there are new changes in export business, and the sales growth in European and American markets has become a new focus.
On October 19 last year, Xcmg Construction Machinery Co.Ltd(000425) announced that it planned to invest US $99 million to establish XCMG America and its subsidiaries. "The United States is the market with the largest sales of construction machinery, and it is also the market Xu gongzhi will win."
"European and American countries are also vigorously engaged in infrastructure construction," Xcmg Construction Machinery Co.Ltd(000425) people stressed that at present, the company has done a lot of work around developing the American market. "Now we have also got some orders. We think Europe and America are a good market in the next two or three years."
Cai Shenglin believes that there are three reasons for the acceleration of the internationalization process of the construction machinery industry in recent years: first, the Chinese market pattern has been relatively stable, and there is more room for overseas market expansion. For example, Sany Heavy Industry Co.Ltd(600031) of excavators accounts for about 6% of the overseas market, and there is still a lot of room to improve; Second, most of the world's major countries have introduced stimulus policies because of the epidemic, increasing the demand of overseas markets; Third, China's construction machinery has a good cost advantage, the brand has gradually been recognized by the global market, and the international competitiveness of products has been greatly improved.
"At present, the main strategy of construction machinery head enterprises is basically to focus on overseas markets, especially European and American markets, so the sustainability of overseas markets can be expected." Cai Shenglin said that in recent years, the export growth rate of Sany Heavy Industry Co.Ltd(600031) European and American markets has been higher than 100% every year.
According to the current growth rate of Sany Heavy Industry Co.Ltd(600031) overseas revenue, the market expects that the proportion of the company's international business in the total revenue will exceed 30% in 2022.
So can the overseas market become the decisive factor for the development of construction machinery industry? Xiang Wenbo believes that "construction machinery enterprises can hedge the impact of the cyclical adjustment of the Chinese market through internationalization."
Cai Shenglin also said that the overseas market has played a good "bottom effect" in this round of economic cycle, and it is also the area where the company plans to cultivate in the future. "But when the industry cycle goes up, China will still be our most important market because of the huge total demand."
Incremental logic brought by electrification
The periodicity of the construction machinery industry is also reflected in the long span of product renewal. The renewal cycle of construction machinery products is generally 8-10 years. The rapid growth of the industry from 2016 to 2021 is due to the superposition of the stock logic of product replacement in addition to the incremental logic of infrastructure and real estate. However, in the 5-10 years after the replacement peak, how should construction machinery enterprises deal with the low period of replacement and realize the long-term development logic of the industry?
The answer is electrification Sany Heavy Industry Co.Ltd(600031) people even believe that the trend of electrification is at hand and can not be regarded as long-term logic. "Electrification strategy is our important deployment this year", Cai Shenglin said. It is expected that the proportion of motorized machinery products will account for about 5% of the company's overall sales in 2022.
From the perspective of engineering vehicle products with high electrification rate. According to the market forecast, the electrification penetration rate of engineering vehicles will reach 25% in 2025. Based on the ownership of the whole industry, the cumulative total scale of the sector from 2022 to 2025 will reach 250 billion yuan to 300 billion yuan. In addition, it is noteworthy that the electrification of excavator products is also accelerating the process.
"We have generally recognized and accepted electric machinery products", Xcmg Construction Machinery Co.Ltd(000425) people told reporters that now some regions and factories begin to focus on purchasing new energy machinery, "they have the demand for replacement, and we also have the power to update. In the medium and long term, this is a very obvious trend."
Sany Heavy Industry Co.Ltd(600031) people believe that electrification is not only the stock logic of replacement, but also will bring incremental market. On the one hand, the price of electric products is higher. Taking concrete mixer as an example, the gross profit margin of electric products is more than 10% higher than that of traditional products, and the improvement of value will drive the expansion of the volume of the industry; On the other hand, with the penetration of electric and digital industries, construction machinery products will be more diversified and intelligent, applicable to more people and applied to more scenes.
For example, the fastest-growing aerial work machinery in the past two years can be used in more fields except infrastructure and real estate, such as decoration and advertising, due to the trend of electrification and intelligence, resulting in a large increase in demand and a rapid growth in market capacity.
For the periodicity of the construction machinery industry, Cai Shenglin believes that compared with the previous cycle, the industry will not have a "deep V" trend this time. Because of the diversified demand of the industry, it has shifted from relatively relying on real estate to infrastructure, municipal construction, environmental protection, mining, farmland, water conservancy and other fields, and the application scenarios have increased significantly. "With the support of Shanghai external market, the cycle trend should be a smooth arc bottom".
An anonymous business person told reporters that from the logic of short-term, medium-term and long-term, there is no "collapse mode" crisis in the fundamentals of the construction machinery industry. Enterprises are finding new growth space and smoothing the cycle curve through various ways. "The current trend of the construction machinery industry in the secondary market is more an emotional game and does not really reflect the industry value." He believes that the correct way to invest in the construction machinery industry is to be a long-term believer after fully understanding the industry and enterprises.
Manuscript: how to break the cycle curse of AB side "mutual fighting" construction machinery?
The reporter interviewed a number of industry insiders and experts and found that the construction machinery industry is facing the situation of AB face to face competition: on the one hand, the decline of sales volume and the increase of operation volume coexist, but the marginal improvement of industry demand is expected to rise as a whole; On the other hand, the progress of infrastructure investment moderately ahead of schedule is also considered by some market participants to have the possibility of a slight delay. There is a lag in boosting the demand for construction machinery products. Some interviewees believe that the machinery industry is still in a downward period.
This reflects the cyclical pain of the construction machinery industry and forces the head enterprises to open the "strategic toolbox" of the ironing cycle and seek increment from electrification, internationalization or diversification. How to break the cycle curse will torture the wisdom of all construction machinery participants.
Decline in sales volume vs increase in operation volume
China Construction Machinery Industry Association has made statistics on the sales data of more than 20 construction machinery enterprises. In terms of sales volume, there was a year-on-year decline in the first two months, especially in China. From January to February, 40000 excavators were sold, a year-on-year decrease of 16.3%, of which 25300 were sold in China, a year-on-year decrease of 37.6%. 16500 loaders were sold in the first two months, a year-on-year decrease of 0.49%; China sold 9786 units, down 18.3% year-on-year; The export sales volume was 6694 units, with a year-on-year increase of 46.2%.
According to Pei Xiaojun, a doctoral student in the school of mechanical engineering of Tianjin University, from the monthly data since the beginning of the year, the performance of the construction machinery industry is hard to say and eye-catching. The main reason is that the growth rate in the first quarter of last year was too good, resulting in a year-on-year decline in sales this year. From the data of nearly two months, the situation has improved compared with that expected at the end of last year.
Yang Yong, senior researcher of Yihe Yinfeng, told the securities times that in the first two months of this year, China's domestic sales of construction machinery products represented by excavators were sluggish, but the decline narrowed slightly; Exports continued to grow at a high speed. He believes that the decline in the second quarter will be significantly narrowed.
Although the sales volume of representative products in the Chinese market declined, the operation volume showed an upward trend. According to the China Central Television financial excavator index report, in February this year, the operation time of cranes, vehicle mounted pumps, excavation equipment and Drag Pumps increased by 32.7%, 3.9%, 3.5% and 2.7% respectively, which means that a large number of key projects are concentrated and the construction in progress is accelerated. From the perspective of truck cranes, crawler cranes, mixer trucks and other categories, the investment and construction efforts in Shanghai, Zhejiang, Shanxi, Hubei, Sichuan and other places are continuously increasing. Pei Xiaojun believes that this can be regarded as the feedback of many places on "moderately ahead of infrastructure investment".
Pei Xiaojun believes that the increase in work volume is also related to the start of the "counting from the east to the west" project. "Take Guizhou as an example. With the construction of the inter provincial direct optical cable project from Guiyang to Wuhan, 17 direct networks will be built in the first half of this year. The growth of the operation volume of truck cranes and Drag Pumps shows that the demand for the commencement of new projects in Guizhou is still releasing."
Progress delay and industry lag
Pei Xiaojun believes that "as the central government proposes to carry out infrastructure investment moderately in advance, the resumption of work after the Spring Festival and the commencement of major projects will boost procurement confidence. From the perspective of special bonds, although the scale is flat, the pre issuance will also bring the expected marginal improvement of construction machinery demand."
In Yang Yong's view, construction machinery enterprises are greatly affected by the macroeconomic situation and capital expenditure. "This year, affected by the increase of capital expenditure, the performance of construction machinery enterprises in 2022 should be better, but due to the repeated epidemic, the performance in January and February is not obvious. I believe that moderately advanced infrastructure investment will be implemented; at present, the relevant progress may be slightly delayed."
Pei Xiaojun pointed out that although the central government proposed "moderately ahead", boosting demand lags behind. "From the perspective of enterprises I personally contacted, although the construction workload has increased and the price of mechanical products is stable, there is little response in the short term because the infrastructure has just started. On the contrary, due to encouraging customers to purchase intensively at the end of last year, the demand in January this year has become less."
The chief analyst of a securities firm also believes that from the perspective of industry cycle, machinery is still in the downward stage. "After the release of the 4 trillion investment plan in 2008, the construction machinery market quickly reflected, and ushered in a peak in 2011, and then entered a downward cycle. However, it began to rise again from 2017 and fell again in 2021. At present, it is possible for the market to rebound due to the moderately advanced infrastructure investment policy, but from the perspective of the industry cycle, it is still in the downward stage. The main focus of breaking the industry cycle can be It also depends on the rapid development of electric drive engineering machinery products. "
This reflects the cyclical pain of the construction machinery industry. "Almost any manufacturing industry has periodicity, and it is difficult for the construction machinery industry to escape the curse of the cycle. It is just a relative weakening of the cycle." Yang Yong said.
In order to break the cycle curse, many enterprises have taken actions. Take Zoomlion Heavy Industry Science And Technology Co.Ltd(000157) as an example, hedge the cyclical impact of construction machinery through the layout of agricultural machinery and new building materials and diversified development. In terms of new materials, six factories are planned to be built this year, and a number of projects are under active negotiation. This is regarded by Yang Yong as a leading enterprise looking for incremental market breakthroughs to smooth the cycle and bring performance fluctuations.
Electrification and internationalization are regarded as two dimensions of future market increment. Yang Yong believes that electrification can improve efficiency and product generation, while internationalization can provide greater market space. "The cost performance of China's construction machinery products is still relatively high. With the enhancement of technical strength and the economic construction of most developing countries facing an upward cycle, the future market is very worth looking forward to."
