Event:
On April 8, the construction machinery sector index (Shenwan) rose 6.6 points to 17749 Sany Heavy Industry Co.Ltd(600031) increased by 9.12%.
Key investment points:
China’s excavator sales hit the bottom and rebounded, with strong demand in foreign markets
On April 8, according to the statistics of 26 excavator manufacturers by China Construction Machinery Industry Association, 37085 excavators of all kinds were sold in March, with a significant increase of 51% month on month and a year-on-year decrease of 53.1%; Among them, there were 26556 sets in China, with a month on month increase of 55.7% and a year-on-year decrease of 63.6%; 10529 units were exported, up 41.7% month on month and 73.5% year-on-year. A total of 77175 excavators were sold in 2022q1, a year-on-year decrease of 39.2%; Including 51886 sets in China, a year-on-year decrease of 54.3%; 25289 sets were exported, with a year-on-year increase of 89%.
The requirement of “forming physical workload as soon as possible” is expected to usher in the peak construction season in the second quarter
According to the information of the national Standing Committee at the end of March, the special debt of local governments this year was 3.65 trillion yuan, an increase of 30% over 21 years, and 1.46 trillion yuan had been issued in advance according to law at the end of last year. According to the requirements, the 1.2 trillion yuan of local government special bond funds issued in the fourth quarter of last year should be allocated to specific projects as soon as possible, and the amount issued in advance last year should be completed by the end of May and this year by the end of September. The special debt will focus on projects in transportation, energy, ecological and environmental protection, affordable housing projects and other fields, and start a number of qualified major projects, new infrastructure, transformation of old public facilities and other construction projects. The issuance and use of local bonds will greatly play the role of leading major projects and leveraging government investment, and promote the upward trend of infrastructure boom.
The marginal stabilization of real estate will effectively improve the demand for equipment
The government work report pointed out that we should firmly adhere to the principle of “housing without speculation” and implement policies for the city to promote the virtuous cycle and healthy development of the real estate industry. Since 2022, more than 60 cities across the country have issued various policies to stabilize the property market more than 70 times, and the policies issued by superimposed ministries and commissions have been nearly 100 times; Since March alone, the real estate regulation and control policies issued have been nearly 50 times, mainly including reducing the interest rate of housing loans, reducing the proportion of down payment, increasing the amount of provident fund loans, etc. Favorable policies are expected to promote the marginal stabilization of real estate and further improve the demand for construction machinery.
The construction machinery sector is fully adjusted and in the bottom range, which is expected to improve in the future
The construction machinery index (Shenwan) is currently reported at 17750 points, up 53.75% from the previous peak of 38376. PE of the industry is 11.82x, PB1 91x, at a historically low level. Industry representative companies such as Sany Heavy Industry Co.Ltd(600031) share price 19.27, up 61% from the previous peak of 49.23 Zoomlion Heavy Industry Science And Technology Co.Ltd(000157) share price was 7.14, up 53.27% from the previous peak of 15.28. Considering that the main downstream industries are in marginal improvement, we maintain the rating of “synchronous market-a” of the sector.
Risk tips: the epidemic affects production, the progress of special bond issuance is less than expected, and the real estate policy is tightened
