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The construction machinery industry or the rising tide, related plate investment opportunities?
The rapid growth of construction machinery sales in 2017 has led to a dramatic improvement in the performance of several listed companies and a sustained rise in share prices.
At the end of 2017, the market is rumoured to be an international construction machinery brand excavator will raise the price on January 1 this year. What is the impact of the expected price increase on construction machinery? What are the other ways in which companies can cope with rising costs? What are the investment opportunities and risks in the construction machinery sector in 2018?
Foreign capital construction machinery for the first time in five years, domestic manufacturers have been different.
Reporter: I saw on the net, say January 1 the small pine model rises the price, its factory price rises to have this matter?
Guangdong dealer: it is true that all of our komatsu machines have been upgraded from January 1, 2018.
An international construction machinery brand shandong dealer: 20 tons machine (up) 23,000, nearly 30,000 yuan, because this is factory behavior, the market terminal also said to raise the price.
Reporter: is the factory price rise, or your dealer side rise?
Some foreign brand dealers in shandong province construction machinery: ex-factory price rise, competition is so fierce dealers how dare to rise in price, now we go up other provinces, does not go up the customers also can't be bought here.
Changsha, hunan province, is a highly concentrated area of China's construction machinery enterprises, accounting for more than 30% of the same industry in China, and there are several listed companies in engineering machinery. The reporter interviewed a number of leaders of relevant enterprises, and their statements are different for whether the related construction machinery products will raise prices this year.
Sunward Intelligent Equipment Co., Ltd., chairman Qing-hua he: a rise in price this information, we still want to look at, as a whole, I think from my company under the condition of the competition is fierce, sharp price estimate is unlikely, including foreign companies.
Trinity juki marketing company, the general manager Cheng Jijun: we're going to the price of a few large excavators, appropriately, but for the excavator (pricing) influence is not very big, after all, we have three different types of excavator product.
Zoomlion board secretary ShenKe: the rising price of raw materials, it should be said that a large part of, we will through the cost of internal control, to digest, so for our customers, it should be said (price) on their acceptable range.
Hunan changsha a construction machinery equipment leasing company controller tells a reporter, oneself want to buy several sets of large engineering equipment, every year due to the production operation management cost is higher, leasing, higher tolerance and acceptance to the higher prices.
Changsha ding Chen machinery equipment leasing co., LTD., chairman of the board of directors He Guibin: engaged in our industry, it basically does not lie in the cost of the acquisition cost of the equipment, it is the cost of production and operations management in the process of at ordinary times, a pump truck actual service life is about more than 10 years, 10 years if it rise in price 10% to 15%, split it up to 10 years, the increased cost of negligible.
Hunan sunward engineering machinery sales co., LTD., general manager jiang-bo liu: if we host the rise in price, at the same time, they (the customer) profit space to follow up, I think this is they can accept, otherwise, I think for customers, definitely can't accept this situation.
According to the China construction machinery industry association statistics, December 1, 2017, into the association host range of 25 manufacturing enterprises, a total of 140303 units, all kinds of mining machinery products 99.5% year-on-year. Among them, the sales volume of excavators in the domestic market was 130559, up 107.5% year on year. Industry insiders told reporters that as a core product in the field of engineering machinery, excavators have not raised prices for years. In the whole industry, especially the price of excavators in the whole industry is not very urgent now, it should not evolve into the whole industry collective price increase.
Jin-xing wang, deputy secretary-general of China construction machinery industry association, before a few years of construction machinery during a downturn, it actually has some price, in fact it is a price level before the recovery/excavator 2017 growth rate is higher, reaching almost one hundred percent of the growth, has made some (vendor) the supply and demand can't take the arrival of the goods in time, may be appropriate price growth is also a leading effect.
The cost of raw material manpower and other costs has risen sharply.
Some of the biggest engineering machinery companies involved told reporters that the price of steel in the last two years has increased by 40-50%. At present, the price of steel in the domestic market is about 5,000 to 6,000 yuan per ton, and a 20-ton excavator, which costs about hundreds of thousands of steel materials. Steel prices continue to rise, increasing the cost pressure of machinery and equipment manufacturers.
Sany heavy industry co., LTD., vice general manager Chen: we rise in the cost of raw materials, such as the steel prices, is now about $4000, we were in 2016, steel prices should be 2600, 2600 yuan.
Sunward Intelligent Equipment Co., ltd. chairman he qinghua: for our engineering Equipment, steel is a bulk material, so the increase of steel is likely to be quite large.
In addition to higher prices for raw materials such as upstream steel, labor costs are also rising. With the recovery of the industry in 2017, the demand of technicians related to engineering machinery is also increasing. With the increase of labor gap, the phenomenon of corporate robberies has been increased and labor costs have been increased accordingly.
Sunward Intelligent Equipment Co., Ltd., general manager of marketing corporation Dragon: only in the human resources department before sending all recruitment information after one day may have dozens of even more apply for information, and we always hang up for a long time haven't been to.
Wei tianjun, manager of the operation department of zhonglian heavy concrete machinery co., LTD. : we will have a 50% increase in revenue from our high-strength steel welders in 2017, compared to 2016.
Downstream demand continuously, led to the core components of construction machinery products such as hydraulic pump, hydraulic valve, motor and other products in short supply, it become the important factor of the limit capacity, at the same time, in recent weeks the upstream price of spare parts is revealed a trend of rising.
Zoomlion board secretary ShenKe: in 2017, steel prices rose nearly 40%, we include the cost of labor is increasing/these factors are affecting our upstream suppliers, so we buy from him also on the rise in the price of the parts.
He qinghua, chairman of Sunward Intelligent Equipment Co.,Ltd. : high-end engines and hydraulics are mostly imported, and are now around 10%.
As reflected by the host production enterprises, the reporter understands from upstream spare parts manufacturers, the production cost of nearly two years in the upstream parts enterprises also have substantial some companies there are proposed increase in 2018.
Xugong hydraulic parts co., LTD. General manager Chen Dengmin: in 2017, though the price of raw material market, compared with 2016, probably price increases at around 5%, brings enterprises great economic pressure so we expected in 2018, we have the price of spare parts is expected to increase by 8% to 8% or so.
The leaders of relevant enterprises should have a strong market demand. At the beginning of the year, the traditional orders are off season, and even the monthly orders exceeded the peak of the industry in 2011 and 2012.
Zoomlion concrete machinery company operations department manager Tian-jun wei: usual after the Spring Festival is the charge has to do is to do an advance/like the current don't have this kind of phenomenon is normal
Sany heavy industry co., LTD., vice general manager Chen: in the fourth quarter we may be in for the next year, to do some production of some of the inventory replenishment, but (2017) in the fourth quarter is still in short supply, is the production or couldn't keep up with the rhythm of the needs of customers
Brokerage industry analysts believe that the steel costs accounted for the high category might be up, most of the engineering machinery varieties do not need to raise prices, because sales growth is enough to cover the negative effects of rising cost of steel, the overall profitability is still present a rising trend.
Founder securities machinery industry, chief analyst at Lv Juan: and that kind of accident, because the engineering machinery industry for many years, so little logic to raise prices, we are all basically every year through continuous new product model to maintain the price, seldom go to the price of the product
, chief analyst at China merchants securities machinery industry liu rong: after five years of industry depth adjustment has withdrawn from the many small and medium enterprises, the industry including distributors are out of business, so the concentration of substantial increase and in excavator, for example, in 2011, dominated by foreign brands, domestic brands now share in greatly ascend.
Product intelligence upgrade enterprise Denver post market service.
Sany heavy industry co., LTD., deputy general manager Chen: we intelligent manufacturing implements several effects, the first achieved significantly enhance output per capita to 60%, the other is our management costs plunged to 50%, the manufacturing costs plunged to 40%, in 2017, our gross margin rose instead of 3, 4%.
Zoomlion board secretary ShenKe: 4.0 our products, it is based on a modular design and generalization of some of the design, the modularization and generalization of the proportion of more and more high, one of our design cost is reduced. Our previous product, possibly (profit margin) is 26%, 27% is nearby, we now (4.0) product comes out, all is above 30%.
According to industry insiders, in the construction machinery industry, the new machine is often referred to as "pre-market", and after-sales and value-added services are called "post-market". In the rapid development of the current big data Internet technology, the post-market service is also being upgraded accordingly.
Reporter Yao Jiahao: behind me is a iot of engineering machinery industry cloud platform, so the industry through a cloud platform, we can see that the engineering machinery enterprises, the current across the country, a real-time operation situation of engineering machinery, you can see, the current online work machinery reached more than 45000 units, so specific to a particular machine work, we can also learn about the. I chose a is located in hefei, anhui province, now working in a concrete pump truck, everyone through this cloud platform, the Internet industry can see its real time performance, such as it is now the engine speed, oil pump rotation speed, it it hydraulic oil temperature. Once appeared in the process of operation of the machine fault, then it would immediately submitted to the customer's information this mobile phone on the client, he can be the first time to know, our engineers can also through the Internet of things industry cloud platform, remote diagnosis and even maintenance, which is in the industrial age, 4.0 our engineering machinery enterprise, provide value-added services for their clients.
Zoomlion Internet product manager Wu Liang: for example it daily work, and what are the alarm, it's location every day, when does it need maintenance, this is all we need to analyze things
The data through the Internet platform, enterprise also can timely understand the downstream customer starts, opening hours, such as equipment operation, and then to macro economic operation situation, customer management and market future for the corresponding analysis and forecasting
Sany heavy industry co., LTD., deputy general manager Chen: we can through the excavator operation situation, every day I live in judging the situation of the infrastructure construction, so with this I can judge, how about the market situation of next year. The cost of technology has fallen far more than we have seen in the traditional sense of artificial costs, and I think it is a good situation for China's intellectual future.
Zoomlion board secretary ShenKe: now after service market accounted for about 20%, the proportion of the future will gradually increase, because as our equipment's steady increase, the follow-up service market will be bigger and bigger.
Analysts: there is a risk of slowing demand for construction machinery or steady growth in 2018.
In a-share engineering machinery related to listed companies, 2017 years ago in the third quarter, sany heavy industry net profit of 1.803 billion, up 932.56% from A year earlier, zoomlion net profit of 1.282 billion, up 259.84% from A year earlier, sunvo intelligent net profit of 114 million, up 231.52% from A year earlier.
Major construction machinery listed companies in 2017 performance significantly improved. Industry insiders also expressed relative optimism about the market growth of 2018.
Sany heavy industry co., LTD., vice general manager Chen: the scale of the national infrastructure construction as a whole, we see some of the related data, still should have the growth rate of around 15% of the 2018, should speak or a relatively high speed of growth, it is a. The second is that many of our devices are already at a peak of renewal, and our industry is about 8 to 10 years old, and the equipment is a replacement cycle.
It would be a problem if the Equipment doubled every year that would be abnormal. So I estimate that this year (2018), there may be a relatively high growth in the first half of the year, and the growth rate in the second half of this year will be relatively lower at least.
Jin-xing wang, deputy secretary-general of China construction machinery industry association, our industry association on 2018 expected is probably around 10% of the overall, this a growth, this should be more reliable, and not as part of the enterprise said high growth, should be a relatively stable development
Construction machinery industry, analysts said prices indicated that supply and demand of continuous improvement, engineering machinery in 2018 is expected to continue to grow, the recovery is the most positive domestic host leading and core components manufacturers. Under the premise of stable growth of the future industry, the leading manufacturer is always strong.
, chief analyst at China merchants securities machinery industry liu rong: especially hydraulic parts just mentioned the whole global hydraulic parts supply shortages, and a leading company in small dig dug hydraulic parts, mixing valve would make a breakthrough in the research and production, so we think this is one of the biggest a chance. In addition, we are also optimistic about some leading companies that are competitive in the promotion.
Founder securities machinery industry, chief analyst at Lv Juan: engineering machinery leading the company's net profit growth in 2018 will continue to maintain a high growth, from the perspective of earnings growth is to continue to watch our engineering machinery leading company of an investment opportunity, not simply see the growth of sales, sales in 2018, has entered into a state of steady growth.
Brokerage analysts suggested that the construction machinery industry also experienced a sustained rise in production costs in 2018, with lower demand in the lower reaches and less risk of overseas market expansion than expected.
Liu rong, chief analyst of China merchants securities machinery industry: on the one hand, it is the risk of market fluctuation. On the other hand, the stock price will fluctuate according to the national macro-control policy.
Founder securities machinery industry, chief analyst at Lv Juan: if macroeconomic sharply downward fluctuations, this is a construction machinery industry investment risk points, of course we think that this possibility is very little risk point.