Machinery manufacturing is the pillar of economic development. The development of various industries must be based on the support and equipment provided by the machinery manufacturing industry. In the composition of national economic productivity, the role of manufacturing technology exceeds 60%. The proposal of made in China 2025 indicates that revitalizing the machinery industry has become the key to the transformation of China’s economic growth mode. In terms of import and export of China’s machinery industry, the import volume of general machinery / special equipment accounts for 15.9% / 13.1% of the industry’s revenue respectively. We believe that machinery and equipment are highly dependent on foreign countries in the field of high-end equipment. The import price of some subdivisions of special equipment reaches dozens of times of the export price, which may be related to the tonnage and grade of imported and exported mechanical equipment; The import price of machine tools in general equipment has reached 200 times of the export price. The penetration rate of high-end machine tools in China is low. At present, there are basically no obstacles in the key technologies of NC machine tools. It is expected to further narrow the gap through technological innovation in the future.
High end equipment ensures manufacturing safety. The state pays more and more attention to high-end science and technology, independent innovation and neck sticking problems in key fields. CNC machine tools, cutting tools, bearings and precision reducers are important elements of the manufacturing industry. Domestic brands have basically mastered the medium and low-end market, but they still rely on international brands in the high-end field, and some key technologies and core parts are still not completely independent and controllable. However, in recent years, China’s high-end equipment is still in the general trend of high-end import substitution. With the accumulation of technology and the improvement of brand awareness, China’s high-end equipment has broad prospects.
Oil and gas equipment promotes energy security. In recent years, the state has continued to support energy transformation and achieved rapid development of clean energy. However, considering the ballast role of oil, gas and coal and their important role in the national economy, we believe that China’s oil and gas energy development will continue. At present, China has a high degree of dependence on foreign oil and gas, a high degree of dependence on foreign crude oil, and most of its imports come from distant countries. However, at present, China’s oil and gas reserve production ratio is at a historically low level, which is also lower than the average level of all continents in the world. In recent years, China’s shale oil and gas has developed rapidly and its reserves are relatively rich. We believe that it is expected to become an important supplement to China’s oil and gas resources. The development of shale oil and gas has higher requirements for technology. In recent years, the rapid progress of oil and gas development equipment such as fracturing equipment in China will promote the increase of shale oil and gas production. In addition to exploration and development, LNG terminals, pipelines and gas storages will also benefit simultaneously.
Investment proposal and investment object
After years of development, China’s mechanical equipment has strong technical competitiveness, but there are still large opportunities for import substitution and localization in the high-end field. From manufacturing security to energy security, there are still huge development opportunities for China’s high-end equipment. Suggestions: (1) machine tools: 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) ; (2) Tools: Oke Precision Cutting Tools Co.Ltd(688308) , Zhuzhou Huarui Precision Cutting Tools.Co.Ltd(688059) ; (3) Bearing Jiangsu Nanfang Bearing Co.Ltd(002553) Zhejiang Changsheng Sliding Bearings Co.Ltd(300718) Zhejiang Xcc Group Co.Ltd;(603667) Sinomach Precision Industry Co.Ltd(002046) ； (4) Reducer: Leader Harmonious Drive Systems Co.Ltd(688017) , Qinchuan Machine Tool & Tool Group Share Co.Ltd(000837) , Jiangsu Guomao Reducer Co.Ltd(603915) ; (5) Oil service equipment: Yantai Jereh Oilfield Services Group Co.Ltd(002353) , Nanjing Develop Advanced Manufacturing Co.Ltd(688377) , Tong Petrotech Corp(300164) , Sinopec Oilfield Equipment Corporation(000852) , China Oilfield Services Limited(601808) , Bomesc Offshore Engineering Company Limited(603727) , Offshore Oil Engineering Co.Ltd(600583) ; (6) Storage and transportation industry chain: Sinoseal Holding Co.Ltd(300470) , China International Marine Containers (Group) Co.Ltd(000039) , Neway Valve (Suzhou) Co.Ltd(603699) .
Risk tips
Technological progress is less than expected; Market recognition is lower than expected; Policy support was less than expected
