Event:
According to the statistics of 26 excavator manufacturing enterprises by China Construction Machinery Industry Association, 37085 excavators of all kinds were sold in March 2022, a year-on-year decrease of 53.1%; Among them, 26556 units in China, a year-on-year decrease of 63.6%; 10529 sets were exported, with a year-on-year increase of 73.5%. From January to March 2022, 77175 excavators were sold, 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, a year-on-year increase of 88.6%.
Excavator sales fell by 53.1% in March, and exports maintained rapid growth
In March 2022, 37085 excavators of various types were sold, with a year-on-year decrease of 53.1%; Among them, 26556 units in China, a year-on-year decrease of 63.6%; 10529 sets were exported, with a year-on-year increase of 73.5%. In March, China sold 26656 units, a year-on-year decrease of 63.6%, and the growth rate of China’s sales fell sharply. The main reason is that the base number in the same period last March was the highest in history. This year, the impact of the epidemic superimposed on last year’s high base, resulting in a sharp year-on-year decrease in March.
In March, the export sales volume was 10529 units, with a year-on-year increase of 73.5%, continuing to maintain a high-speed growth. The export sales volume in March accounted for 28.39% of the sales volume of the month.
From January to March, 77175 excavators were sold, 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 88.6%.
The economic data in March was weak and the expectation of steady growth boosted the theme market of construction machinery
In March, the PMI fell to 49.5, which fell below 50 again after standing at 50 for four months, indicating that the confidence of the manufacturing industry has been repeated to some extent and is still in a weak trend. The export volume in March was US $276.08 billion, a year-on-year increase of 14.7% and 16.3% from January to February; The import volume was 228.7 billion US dollars, a year-on-year decrease of 0.1% and an increase of 15.5% from January to February. In March, exports maintained a certain growth rate (mainly affected by inflation, and export prices rose significantly), while imports still fell slightly. Import and export data weakened.
Due to the great economic pressure caused by the epidemic, the stable growth is expected to continue to ferment, which is expected to promote the theme market of the stable growth industrial chain. Benefiting from steady growth, the construction machinery sector is expected to bring steady growth theme market.
The marginal improvement of fundamentals is imminent, and the construction machinery is seriously oversold, which is expected to usher in valuation repair
In March, social finance increased by 4.65 trillion yuan, an increase of 1273.8 billion yuan over the same period last year; The stock of social finance was 325.64 trillion yuan, a year-on-year increase of 10.6% (the previous value was 10.2%). In March, the new social financing and credit exceeded market expectations, partially dispelling the market’s doubts about the lack of infrastructure funds. The excavator sales data in the first quarter of 2022 is relatively poor, mainly due to 1) affected by the availability of funds and the progress of project investment, the capital construction investment has not been significantly strengthened. It is expected that the capital construction will continue to increase in the second quarter, resulting in obvious demand improvement. 2) The first quarter of last year was the highest base in history. This year, there is great pressure on the basis of last year’s high base. However, after the second quarter of last year, the sales base of excavators is low, which is expected to achieve the inflection point of year-on-year growth.
This year’s GDP growth target is 5.5%, which shows the determination and confidence of the central government to stabilize growth. We believe that in order to achieve the expected GDP target this year, the stable growth of infrastructure will give full play to its cornerstone role. Infrastructure investment will be carried out moderately in advance, and the demand release rhythm of the construction machinery industry is expected to begin. The construction machinery sector has experienced in-depth adjustment for more than a year. The stock price is relatively low and the valuation is in the bottom range. The marginal improvement of fundamentals is expected to promote the valuation repair market of construction machinery.
Investment advice
We believe that with the marginal improvement of fundamentals, construction machinery is expected to usher in investment opportunities for valuation repair this year. It is suggested to pay attention to the listed companies Jiangsu Hengli Hydraulic Co.Ltd(601100) , Sany Heavy Industry Co.Ltd(600031) , Xcmg Construction Machinery Co.Ltd(000425) and core parts of the three main engine manufacturers of construction machinery, and the two leading companies of forklift Hangcha Group Co.Ltd(603298) , Anhui Heli Co.Ltd(600761) , and aerial work platform Zhejiang Dingli Machinery Co.Ltd(603338) .
Risk tips: 1: the growth rate of infrastructure and real estate investment is lower than expected; 2: Export demand is lower than expected; 3: Industry competition intensifies; 4: Raw material prices continued to rise.
