We selected 15 companies including Sany Heavy Industry Co.Ltd(600031) , Zoomlion Heavy Industry Science And Technology Co.Ltd(000157) , Xcmg Construction Machinery Co.Ltd(000425) , Shaanxi Construction Machinery Co.Ltd(600984) , Jiangsu Hengli Hydraulic Co.Ltd(601100) , Zhejiang Dingli Machinery Co.Ltd(603338) and others as the research samples of the construction machinery sector of the A-share machinery industry.
Summary of the annual report of construction machinery in 2021: the demand of subdivided tracks is differentiated, and the rise of cost side puts pressure on profitability. From the statistical sample apparent data, in 2021, the revenue was 367.51 billion yuan, a year-on-year increase of 12.5%, and the net profit attributable to the parent company was 31.79 billion yuan, a year-on-year decrease of 7.9%. Under the background of high base, the revenue side maintained positive growth. The traditional construction machinery represented by excavators, cranes and concrete machinery entered the stage of downward adjustment of demand, while the downstream application penetration of typical emerging varieties of aerial work platform continued to increase, and the industry demand remained booming. The profit side declined and the profitability was under pressure. In 2021, the comprehensive gross profit margin of statistical samples was 21.91%, with a year-on-year increase of -3.26pct. On the one hand, the demand fell, the market competition intensified and the product price was under pressure. On the other hand, the prices of raw materials and freight increased significantly; The comprehensive net profit margin was 8.86%, with a year-on-year decrease of -1.95pct. Compared with the gross profit margin, the decline was small, reflecting the strong fine management ability and good cost control of construction machinery enterprises.
Summary of the first quarterly report of construction machinery in 2022: the high base superimposes the impact of the epidemic, and the overall performance of Q1 is under pressure. From the apparent data of statistical samples, in Q1 2022, the revenue was 75.68 billion yuan, a year-on-year decrease of 28.4%, and the net profit attributable to the parent was 5.71 billion yuan, a year-on-year decrease of 53.4%. On the one hand, the decline in performance was due to the high base factor. On the other hand, the epidemic affected the downstream construction, supply chain and shipment to varying degrees, resulting in the delay of demand in the peak season in March. From the perspective of profitability, in Q1 2022, the comprehensive gross and net profit margins of the sample of construction machinery sector were 19.04% and 7.73% respectively, with a year-on-year ratio of -5.09 and -4.05pct respectively, and a month on month ratio of -0.57 and + 4.60pct respectively in Q4 2021. The significant improvement in net profit margin was mainly due to the fact that Q4 net profit margin was usually affected by centralized rebate and bonus provision. The profitability of Q1 2022remained basically stable under the pressure of high cost side.
Outlook: (1) from a short-term perspective, the overall performance in 2022 is expected to be “low in the front and high in the rear”. Under the catalysis of the steady growth policy, the growth performance of the industry is expected to rebound in a “V” shape after the second quarter. Under the catalysis of steady growth, infrastructure investment has warmed up, and the issuance of special bonds has been significantly advanced. At present, there are plenty of projects to be started in the downstream. After the epidemic is controlled, it is expected to usher in the peak construction season and stimulate the recovery of equipment demand. According to the calculation of the proportion of monthly sales of excavators in the past five years, under the neutral expectation (the annual industry growth rate decreased by 10%), we expect that with the release of early backlog demand and the easing of the pressure of high base, the industry growth rate is expected to change from negative to positive in August; (2) From a medium – and long-term perspective, leading enterprises have stepped up their international and motorized layout and actively responded to the cyclical fluctuations of the single market. Internationalization: the international layout of domestic leaders is gradually entering the harvest period. ① manufacturing side: layout localized production bases and optimize costs; ② Product end: launch new models with different market adaptability; ③ Sales side: the number of overseas channels and service outlets has increased year by year. In 2021, the overseas revenues of Sany, XCMG and Zoomlion were 24.8 billion yuan, 12.9 billion yuan and 5.8 billion yuan respectively, accounting for 23.3%, 15.4% and 8.6% respectively. Compared with the global leader caterpillar, the overseas market revenue of North America exceeded 180 billion yuan in 2021, accounting for more than 55%. The overseas market of domestic brands has great room for improvement, which has a positive contribution to ironing the cyclical fluctuations of China’s industry. In terms of electrification: at present, engineering vehicles, excavation machinery, loading machinery, hoisting machinery and other categories have electric products offline. In the future, with the continuous maturity of electric drive, electric control and battery technology and the continuous expansion of application scenarios, electric products are expected to accelerate the renewal and replacement of existing models by virtue of the cost advantage in the whole life cycle, and domestic leaders are also expected to rely on the first mover advantage in the field of electrification and the supporting advantages of industrial chain, Participate in the restructuring of the global construction machinery market.
Investment suggestion: the construction machinery sector is at the bottom of the fundamentals. The leading companies have passed the tests of the upward and downward periods of the industry. In the current downward stage of the industry, they actively layout the transformation and upgrading of digitization, internationalization and electrification, rely on innovation to create a deeper moat, and have medium and long-term configuration value. It is suggested to pay attention to the undervalued leaders Sany Heavy Industry Co.Ltd(600031) , Jiangsu Hengli Hydraulic Co.Ltd(601100) , Zhejiang Dingli Machinery Co.Ltd(603338) , Zoomlion Heavy Industry Science And Technology Co.Ltd(000157) , Xcmg Construction Machinery Co.Ltd(000425) , Hangcha Group Co.Ltd(603298) , Anhui Heli Co.Ltd(600761) , etc.
Risk warning: infrastructure investment is less than expected; The implementation of the policy is less than expected; The intensification of market competition leads to the decline of profitability; Overseas market expansion is blocked, resulting in exports falling short of expectations; The sample can only reflect the overall picture of the sector to a certain extent.
