Event:
China Construction Machinery Industry Association released the excavator sales data in March 2022. In March 2022, the 26 main engine manufacturing enterprises included in the statistics sold 37085 excavators, a year-on-year decrease of 53.08%; Among them, 26556 units were sold in the Chinese market, with a year-on-year decrease of 63.61%; The export sales volume was 10529 units, with a year-on-year increase of 73.80%.
Comments:
In March, excavator sales continued to improve month on month. In March 2022, the sales volume of excavators was 37085 units, with a year-on-year decrease of 53.08% and a month on month increase of 51.47%; China’s sales volume was 26556 units, a year-on-year decrease of 63.61% and a month on month increase of 55.74%; The export sales volume was 10529 sets, a record high, with a year-on-year increase of 73.80% and a month on month increase of 41.69%. Due to the high base in the same period last year, the monthly sales volume of excavators in March and that in China increased year-on-year, and the year-on-year growth rate in 2022q2 is expected to be positive. China’s sales volume maintained a substantial growth month on month, and the prosperity of downstream industries gradually rebounded, which will drive the demand for construction machinery. In terms of tonnage structure, in March, the sales volume of large excavation 2690 units, medium excavation 6002 units and small excavation 17864 units decreased by 62.55%, 71.99% and 59.74% respectively year-on-year, and increased by 75.02%, 50.05% and 55.14% month on month respectively. The sales volume of excavators of various tonnage improved month on month for two consecutive months.
The national Standing Committee: “put steady growth in a more prominent position”. In March 2022, the national Standing Committee stressed that “we should strengthen our confidence, set our goals and do not relax, and put steady growth in a more prominent position”; The national development and Reform Commission held the first meeting of 102 major projects in the 14th five year plan, which required to ensure the effective implementation of 102 major projects in the 14th five year plan; We believe that the investment in advanced infrastructure is expected to accelerate and intensify. At the same time, the investment amount of major construction projects in March is about 140279 billion yuan. The China Central Television financial excavator index shows that the construction hours of cranes, excavators and other construction machinery in February have increased year-on-year, which proves that the construction volume of downstream infrastructure projects has increased and the demand for construction machinery has increased. In February 2022, 493.9 billion yuan of new local government bonds were issued; Among them, 100.8 billion yuan of new general bonds were issued, an increase of 1.51% month on month, accounting for 14.00% of the new general bonds; 393.1 billion yuan of new special bonds were issued, down 18.85% month on month, accounting for 10.77% of the new special bonds. From January to February 2022, a total of 1.07 trillion yuan of new local government bonds were issued, of which 20.1 billion yuan of new general bonds and 877.5 billion yuan of new special bonds were issued respectively, accounting for 27.79% and 24.04% of the issued amount respectively. Compared with the same period last year, accelerating the Issuance progress of new special bonds will effectively support the recovery of the prosperity of downstream industries and stimulate the demand for construction machinery and equipment.
Investment suggestion: in March 2022, excavator sales continued to improve month on month and maintained rapid growth; The sales volume data of each tonnage of excavator has improved month on month, and we believe that the downstream boom is gradually picking up. The national Standing Committee stressed that “steady growth should be put in a more prominent position”, and superimposed the requirements of the national development and Reform Commission to ensure the effective implementation of 102 major projects in the 14th five year plan, which will accelerate the recovery process of downstream industries and is expected to stimulate the demand for construction machinery. It is suggested to pay attention to the leaders in the construction machinery industry: Sany Heavy Industry Co.Ltd(600031) ( Sany Heavy Industry Co.Ltd(600031) ), Xcmg Construction Machinery Co.Ltd(000425) ( Xcmg Construction Machinery Co.Ltd(000425) ), Zoomlion Heavy Industry Science And Technology Co.Ltd(000157) ( Zoomlion Heavy Industry Science And Technology Co.Ltd(000157) ), Guangxi Liugong Machinery Co.Ltd(000528) ( Guangxi Liugong Machinery Co.Ltd(000528) ).
Risk tips: (1) if the infrastructure / real estate investment is less than expected, the demand for construction machinery will weaken; (2) If the issuance progress of special bonds slows down or the issuance amount is lower than expected, the number of downstream projects will decrease and the demand for construction machinery will weaken; (3) If the overseas market reduces the demand for Chinese enterprises’ products, it will put pressure on the performance of Chinese enterprises; (4) If the price of raw materials rises sharply, the performance of enterprises in the industry will face greater pressure.
