Construction Machinery: Recovering from the Six Months Can't Cover Deep Problems

In the construction machinery industry that first recovered in the second half of last year, due to favorable policies this year, the market was booming, and the performance of semi-annual reports of listed companies showed a trend of blowouts, which attracted great attention from insiders and outsiders.

In the first half of the year, the total output value of the construction machinery industry was 214.5 billion yuan, a year-on-year increase of 60%, and the export delivery value was 8.3 billion, an increase of 49% year-on-year, ranking first in the machinery industry. The six-year construction machinery listed companies’ average revenue growth in the first half of the year reached 255% year-on-year. Therefore, there is a rare unification of the capital market to sing the industry. However, the industry will face the impact of changes in income tax and tax refund policies in the future, and the overcapacity and excessively concentrated market share in the core technologies of leading companies and independent intellectual property rights Is the construction machinery industry can not open the problem.

Three measures to ensure recovery

Construction machinery is a machinery for the construction of urban and rural construction, railways, electricity and other basic construction projects; all the earthwork, stone works, concrete works and all kinds of construction and installation engineering in the comprehensive mechanized construction, the necessary operating machinery and equipment, It is collectively referred to as construction machinery.

All along, the development of China’s construction machinery industry has been driven by four forces: The first is that the country’s infrastructure investment has grown at a rate of more than 30% per year, which has effectively stimulated domestic demand; the second is the rapid development of industries such as warehousing, logistics, and loading and unloading. Supporting the development of product markets such as industrial trucks and mobile cranes, product sales grow at a rate of over 30% per year; the third category is the demand for high-speed growth of the real estate industry for construction machinery; the fourth is the export of machinery products annually. With a growth rate of around 70%. In recent years, the total scale of China's construction machinery industry has developed rapidly, of which the proportion of real estate promotion is close to 50%.

Since the fourth quarter of last year, real estate in the country began to decline, and hydraulic excavators, concrete machinery, building decoration, elevators and other products in construction machinery suffered a cold encounter. Since September 2008, the impact of the international financial crisis, export orders have sharply decreased, and the export market has been significantly affected. Zhang Jianguo, chief executive officer of Zoomlion (15.20, 0.02, 0.13%), stated that it is expected that exports of construction machinery in China will continue to be constrained in the next 2 to 3 years, and it will be increasingly difficult to obtain growth through exports. The leg that supports the market, as well as another leg of real estate, suffered the most serious damage.

In this case, the government has introduced three major measures, namely, increasing investment in infrastructure construction; implementing a moderately loose monetary policy; and adjusting the export tax rebate rate. In particular, railway and other transportation construction investment and 4 trillion infrastructure investment directly increase the purchase amount of construction machinery in 2009 and 2010 by approximately RMB 50 billion to RMB 60 billion each year, accounting for RMB 30 billion in engineering machinery sales in 2008. %~20%. Zhou Fengwu, an analyst of Dongfang Securities Machinery Industry, believes that the strong sales of the industry in the first half of this year are the result of the lagging effect of investment of RMB 4 trillion. Regional economic revitalization and key projects are important support for industry demand, and export recovery will be the year of 2010. Highlight highlights.

Deep problems still exist

In the fiery market, analysts of various securities firms are optimistic about the construction machinery industry, and even anticipate annual sales to hit 500 billion. According to China's construction machinery industry, sales of excavators, loaders, and bulldozers increased by 98%, 65%, and 86% year-on-year in the first half of the year, compared with the same period of 2008, only 80%, 10%, and 30%, respectively. The output value from 2006 to 2008 was 200 billion, and the growth rate was steadily around 40%. The construction machinery industry can only be said to be gradually restored with strong policy investment support.

In addition to the current strong dependence on the national policy, there are still many core problems in the construction machinery industry operation. The sub-sectors are unbalanced in development, and the production capacity is concentrated in several major leading enterprises; excess capacity, vicious competition is intensified; the technological level is backward, key components The development of accessories is backward and complete; the recovery of international market demand will take some time.

With relatively clear investment policies, the new corporate income tax law and export tax rebate will have a significant impact on the construction machinery industry. The new income tax law has been implemented for two years at the end of 2009, and the statutory tax rate for most companies in the industry will be three years from now. From 15% to 25%; during the 25 years since the implementation of the export product tax rebate policy, the export tax rebate rates have been lowered three times in 1996, 2003, and 2007, and have been quickly adjusted back. Wang Jixian, a researcher at the Institute of Mechanical Industry Information, said that changes in the tax rate will interfere with the company's operating expectations, because the price of the product and the profit and loss of the business can not be determined. Now due to frequent adjustments, companies are even accustomed to enjoying tax rebates as profits.

The reliability of China's construction machinery products is uncompetitive, and the core technologies of independent intellectual property rights are few. Basically, the “catch-map-map-assembly-improvement-formation” cloning model is adopted. This process has condensed the development process of foreign countries over a hundred years to 30 years. Even within 10 years, the rapid rise of "Made in China" is exceptionally thin. Just as Industrial Securities analyst Wu Hua pointed out that industrial transformation is not just a concept, the factors constraining the long-term rapid development of the construction machinery industry have gradually shifted from investment-driven to advanced manufacturing. There are only two ways out, and Shanzhai will continue to maximize its market share in intellectual property disputes; surpass Shanzhai and enhance its technical strength and international reputation.

Although there are pioneers such as Zoomlion, after acquiring Italy's CIFA through overseas, its technology is in the leading position in the concrete industry, and the cost of products is reduced by 60% to 70%, but there are few similar, plus nearly two years of loaders and Excavator production process of the two leading products, product homogeneity is serious, a variety of "deformation" price promotion wars emerge in an endless stream, the market supply and demand imbalance, in addition to the international giants began to actively expand the phenomenon of the Chinese market, a serious lack of domestic companies R & D momentum.

Industry trends focus on six leading

At present, there is a tendency for the domestic construction machinery market to focus on the six leading companies.

XCMG's market share in the six categories of wheeled cranes and truck cranes ranks first in the country, leading position is obvious, and it is equipped with the most complete key spare parts system in the industry, as well as the corresponding technical talents. The core of this year's strategy is to persist. The “three highs and one big” product development line, namely high-end, high-tech, high added value, and large tonnage, is also preparing for the development of new industries and the deployment of overseas markets, but there has been no fundamental breakthrough in key R&D products, capital operation capabilities and international perspectives. It is inferior to Zoomlion and Sany Heavy Industry (23.16, -0.24, -1.03%).

The company has completed the industrial chain layout in China, and has grown steadily in internationally prosperous Zoomlion. It has taken the lead in accelerating the second half of the year to accelerate the use of fund-raising investment commitments and insists on implementing the core strategies of domestic fission and international fusion. In addition to successful international acquisitions, the financial leasing business has also become its new growth point. The 2010 earnings per share is expected to be 1.8 yuan, and the net profit is expected to increase by 50%.

After investing in R&D and manufacturing bases in India, the United States, Germany, and Brazil, Sany Heavy Industry has gradually completed the international strategic layout. Due to its focus on talent pool and technology research and development, Sany Heavy Industry has copied its successful business model of the leading product concrete machinery to the cranes. Together with the international path to balance the risks of the domestic real estate construction industry, the company has a rapid growth momentum, and its 2010 earnings per share Expected to be nearly 1.7 yuan, net profit is expected to increase by 93%.

Liugong (32.90, -0.28, -0.84%), as the leading domestic loader, has significant advantages in production technology and channels, but the loader industry has sufficient domestic production capacity, so the competitive pressure is also huge.

Shantui shares, which accounted for nearly 40% of bulldozers’ revenue (16.54, -0.14, -0.84%), suffered severe sales stagnation in the 2009 financial crisis, and their export volume also fell sharply. The urgently needed product structure optimization has been difficult to carry out, and it is closely related to the company's own R&D investment. In addition, the cost control is under greater pressure and the recovery degree is limited in the second half of the year.

The XGMA shares (13.62, -0.09, -0.66%), which are leaders in the loader market, took advantage of R&D. In just four years, they achieved a high growth in excavator sales. In the first half of the year, they exceeded 200% year-on-year, and the product structure transitioned to a Relatively stable stage.

Concentration of the market among the six leading enterprises will become the development trend of the industry in the next few years. Enterprises with smaller market shares will be difficult to survive. If the price war due to overcapacity cannot be avoided effectively, will there be white goods in the Chinese construction machinery industry? The tragedy is unpredictable. If, like the above-mentioned industry giants, they go out and break through the bottleneck, they may be able to achieve “turning overtaking” on the premise of effectively integrating global resources. However, the outcome of the internationalization road is still unpredictable.