Over the past three decades, China's machine tool industry has established a relatively large-scale and complete system and laid a favorable technology through hard work. In the first half of the year, due to insufficient capacity utilization and product price reduction, the interim report performance was generally lower than expected, especially the export-oriented industries such as ships, forklifts and bulldozers have not yet come out of the trough, but we believe that the darkest moment of the industry has passed
it is normal for the sales volume of construction machinery products to drop month on month in the rainy season in July. Benefiting from infrastructure construction, the sales of truck cranes, excavators and concrete machinery increased year-on-year for two consecutive months, while the sales of earth rock machinery loaders and bulldozers were flat. The growth of new construction is a forward-looking indicator. It can be said that even if it falls back, it is still at a historical high. We believe that the sales of construction machinery in the second half of the year will be not weak in the off-season
the output of domestic CNC metal cutting machine tools rebounded, and the export of machine tools in July achieved positive year-on-year growth for the first time in the year
export demand hit the bottom, and the rebound sign is not obvious. In June, the sales of construction machinery in South Korea continued to rise month on month, with a year-on-year decrease of about 40%, narrowing the decline; The sales amount of construction machinery in Japan only recovered to 30% - 40% of the same period last year; The number of German factory and machinery orders fell 46% year-on-year, narrower than the decline in May; Machine tool orders in the United States fell 64% year-on-year in June; Japanese machine tool orders are still only 20% of the same period last year
the recovery of the machinery industry will evolve from downstream special equipment to parts and components, and then to general equipment such as machine tools. The recovery is a gradual process. At present, the start-up of demand is still mainly from domestic demand, such as railway, highway, subway and other projects. If private investment and exports recover in the second half of the year, the construction machinery industry will still benefit the most, General equipment such as machine tool "This is beneficial to the environment and economy. The recovery of the equipment and shipbuilding industry is relatively lagging. Due to the lack of motivation for the continuous rise in raw material prices, it is expected that the profits of the machinery industry will be improved in the second half of the year.
Investment Strategy: grasp the investment with good industry and low valuation, resulting in error opportunities. We believe that the growth of the construction machinery industry in the next two years is certain, the reasonable PE should be times, and the industry representation of Listed Companies in the construction machinery industry Strong management level, corporate governance and international competitiveness are better than the average level of the machinery industry, and should enjoy the valuation premium. In addition to Sany Heavy Industry and XCMG technology, our recent report raised the short-term investment rating of Zoomlion, Liugong and Taiyuan Heavy Industry to "strongly recommended"