Profit growth exceeded expectations, construction machinery sector performance

Several leading engineering machinery enterprises of construction machinery have recently announced a large pre-announcement of profits in the first half of the year. Zoomlion’s semi-annual results have been pre-increased by 50% to 100%; Xugong Machinery, which benefited from the injection of the Group’s assets last year, has increased its approximation based on adjusted data. 35.6%; Xiagong shares increased by more than 300% in the first half of the year.
According to incomplete statistics, as of July 7th, among the nearly 750 listed companies that have disclosed the interim results forecast in the Shanghai and Shenzhen Stock Exchanges, there are about 570 pre-history companies with interim results, losses, or renewals. The company has obvious industry concentration, and the first place is the mechanical sector with more than 80 pre-history companies. Experts predict that this year's construction machinery will break the conventional pattern of high before and after low, showing a steady high trend.
Relevant statistics show that since the beginning of this year, China's construction machinery industry has ushered in a high-speed growth exceeding expectations. In the first five months of this year, sales of construction machinery products increased by more than 50% year-on-year. Sales of loaders, excavators, forklifts and bulldozers increased by 71.92%, 101.77%, 96.72% and 82.12% respectively. The sales revenue of concrete machinery has reached the sum of the whole year of 2009. Concrete pump trucks, truck cranes, truck-mounted cranes, loaders, excavators and other products have repeatedly appeared in hot sales scenes.
Mao Zhongwen, deputy secretary-general of the China Construction Machinery Industry Association, said in an exclusive interview with the Economic Information Daily that the performance of the leading companies in the construction machinery industry this year was particularly eye-catching. In April this year, the sales of the whole industry showed a blowout. It is expected that this year's construction machinery will break the conventional pattern of high before and after low, showing a steady high trend. He pointed out that the current construction machinery industry is experiencing the process of accelerating the survival of the fittest. Many small-scale enterprises in the industry are in a bad situation, and the whole industry is developing in the direction of scale and intensification.
Mao Zhongwen said: "The sharp increase in industry performance in the first half of the year mainly benefited from domestic demand investment. On the one hand, because the machinery industry is a long-cycle industry, the late effects of 4 trillion yuan investment are now beginning to appear; on the other hand, the growth of local investment is still very Rapid."
Behind the sales boom, the reporter learned that the core components of China's construction machinery such as engines, hydraulic pumps, and hydraulic motors have always been monopolized by foreign countries. Many host companies, especially those that rely on imported core hydraulic components, are subject to foreign accessories. Most of the profits created by enterprises and the whole machine are swallowed by core accessory companies, and their continued development is also greatly restricted.
At the same time, some market analysts believe that the European debt crisis will continue to drive down China's construction machinery exports.
Mao Zhongwen admits that although we have reached the top in the world in terms of sales and sales, there is still a considerable gap in key components and high technology. He told reporters that the "Twelfth Five-Year Plan" under preparation will focus on the work in this field and increase technology research and development and investment.
Yan Jun, president of China Construction Machinery Industry Association, also pointed out that the industrial concentration in the construction machinery industry in China is not high, the independent innovation ability in some areas is insufficient, the development mode is extensive, and the reliability and durability are still different from those of foreign advanced products.
For the development of the construction machinery industry in the second half of the year, market participants are generally worried that with the introduction of the country's suppression policy on the real estate market, the decline in the growth rate of fixed asset investment in the second half of the year will have a negative impact. The CIC consultant believes that the environment of the machinery industry is tight in the second half of the year. The industrial value-added growth rate and investment growth rate closely related to the machinery industry have confirmed the downward trend. It is expected that the property market will continue to be in the inventory accumulation stage and the overall operating environment of the machinery industry. Tightening.
Securities researcher Qiu Shiliang also believes that China's construction machinery industry is in the late stage of growth, and the industry boom may peak in the short term. He predicted that after three years, China's construction machinery pattern will be initially laid, and then the industry will enter a period of low growth.
Compared with pessimistic expectations, there are also a few optimistic views. Li Donghui, vice president of Guangxi Liugong Machinery Co., Ltd., believes that “all levels of government increase the construction of affordable housing, and the amount of low-rent housing and affordable housing is higher than last year. The acceleration of government investment will slow down real estate regulation and control. The adverse impact of the construction machinery industry."
Securities researcher Dong Yaguang also believes that while the government regulates the property market, it also proposes to speed up the construction of affordable housing, which will play a certain hedging role. In addition, China's current urbanization rate is still low. According to relevant data estimates, for every percentage point increase in urbanization rate, new investment demand will be 6.6 trillion yuan. Urbanization will promote a large amount of infrastructure construction and real estate construction, and the demand for construction machinery will be greatly increased.

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