Event:
According to the statistics of 26 excavator manufacturing enterprises by China Construction Machinery Industry Association, 24534 sets of various excavation machinery products were sold in April 2022, a year-on-year decrease of 47.3%. Among them, 16032 units were sold in the Chinese market, a year-on-year decrease of 61.0%; The export sales volume was 8502 units, with a year-on-year increase of 55.2%.
From January to April 2022, the 26 main engine manufacturing enterprises included in the statistics sold 101709 sets of various mining machinery products, a year-on-year decrease of 41.4%. Among them, 67918 units were sold in the Chinese market, a year-on-year decrease of 56.1%; The export sales volume was 33791 units, with a year-on-year increase of 78.9%.
In April, the sales volume of excavators decreased by 47.3%, and the export continued to improve, which was good for the leader. In April 2022, 24534 sets of various excavation machinery products were sold, a year-on-year decrease of 47.3%. Sales volume in China market decreased by 32.61% year on year; The export sales volume was 8502 units, with a year-on-year increase of 55.2%.
In April, China sold 16032 units, a year-on-year decrease of 61.0%, and the decline was not narrowed. The main reason is that the continuous epidemic since March has led to large-scale closure and control in the Yangtze River Delta, and the downstream demand has been significantly restrained.
Superimposed on the higher base in April of the same period last year.
In April, the export sales volume was 8502 units, with a year-on-year increase of 55.2%, continuing to maintain the trend of rapid growth. The export sales volume in April accounted for 34.65% of the sales volume of the current month.
From January to April, 101709 excavators were sold, a year-on-year decrease of 41.4%; Among them, there were 67918 sets in China, a year-on-year decrease of 56.1%; 33791 sets were exported, with a year-on-year increase of 78.9%. Demand continues to maintain China’s bleak and booming export situation since the second half of last year, benefiting leading enterprises with strong international competitiveness.
The demand of small excavation is better than that of medium excavation and large excavation
In terms of tonnage, the sales volume of large excavation in April was 1802 units, that of medium excavation was 3534 units and that of small excavation was 10696 units, down 59.92%, 69.80% and 57.05% respectively year-on-year. From January to April 2022, the cumulative sales of large excavation, medium excavation and small excavation were 7048, 15415 and 45445, down 57.4%, 65.8% and 51.2% respectively. The demand of small excavation is better than that of medium excavation, which continues the industry trend since 2021. Small excavation has good applicability in many new occasions. It replaces labor and meets the new social situation such as the reduction of labor population and the aging of workers. Therefore, the demand for small excavation has increased rapidly in recent years.
In April, the epidemic intensified, the economic data continued to be weak, and the stable growth expectation fermented to promote the theme market of construction machinery
In April, the PMI fell further to 7.4, especially the PMI production index fell to 44.4 and the new order index fell to 42.6, further breaking the new low. Non manufacturing PMI fell to 41.9 in April The downturn of the prosperity index indicates that there is great economic pressure.
In April, the cumulative growth rates of manufacturing investment, infrastructure investment and real estate investment were 12.2%, 8.26% and – 1.9% respectively. The cumulative growth rate decreased by 3.4pct, 2.22pct and 3.7pct respectively compared with the data in March In April, the investment in fixed assets was seriously affected by the epidemic, which significantly suppressed the demand for construction machinery.
The export amount increased by 3.9% year-on-year in April and 14.6% year-on-year in March.
In April, the completed investment in real estate development increased by – 2.7%, the new construction area increased by – 26.3%, and the real estate sales area increased by – 29.5%. In April, real estate investment, new construction and sales data did not improve due to the impact of the epidemic.
Based on the economic data in April, due to the impact of the epidemic, there is great downward pressure on the economy, so it is imperative to maintain steady growth in the second and third quarters, which constitutes a substantial positive impact on the demand for construction machinery. From May 2021, excavator sales began to show negative growth. Last year, the base number decreased, the epidemic situation eased, and the steady growth force. It is expected that the demand for construction machinery will recover significantly. We believe that the inflection point of the boom of construction machinery is in sight, and we are optimistic that excavator sales are expected to turn to positive growth in June at the earliest. There is a high probability that the whole year will show a pattern of low in the front and high in the back.
The spirit of the Politburo meeting at the end of April requires that we should strengthen macro policy adjustment, stabilize the economy, strive to achieve the expected goal of economic and social development throughout the year, and keep the economy running within a reasonable range. We should make every effort to expand China’s demand, give play to the key role of effective investment, strengthen the guarantee of land, energy use and environmental impact assessment, and comprehensively strengthen infrastructure construction.
The Politburo meeting once again made it clear that the GDP growth target should not be loose, and stressed that we should make every effort to expand demand and comprehensively strengthen infrastructure construction. It is expected that in the second and third quarters, after the epidemic eased, steady growth will become the main theme. 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.
