Excavator Sales Drive Construction Machinery Boom, Downstream Demand Accelerates Industrial Robot Recovery

After the relatively good industrial status in the first half of the year, the overall situation of high growth of construction machinery industry in 2020 has been determined.

According to a number of construction machinery industry leaders disclosed the situation of the third quarter, the industry continued to maintain a high outlook in the third quarter. Sany Heavy Industry's third quarter report shows that in the first three quarters of 2020, the company's total business revenue was 72.892 billion yuan, with a year-on-year growth of 24.2%; the net profit attributable to shareholders of listed companies was 12.45 billion yuan, with a year-on-year increase of 34.69%; the net cash flow generated from operating activities was 11.024 billion yuan, an increase of 33.16% over the same period; the main operating indicators set the best record in history. The third quarter report released by Zoomlion pointed out that during the reporting period, the company's total operating revenue reached 16.4 billion yuan, an increase of 42.48% over the same period of last year; the net profit attributable to shareholders of listed companies reached more than 1.6 billion yuan, up 63.41% year-on-year. According to the third quarter report released by Liugong Machinery Co., Ltd., the company's total operating revenue reached more than 5.3 billion yuan, an increase of 18.9% year-on-year; the net profit attributable to shareholders of listed companies reached more than 300 million yuan, with a year-on-year growth of 12.91%.

On November 4, Xiang Wenbo, President of Sany Heavy Industry, told the 21st century economic report: "the main reasons for the growth of performance in the first three quarters are the increase in sales of construction machinery driven by domestic infrastructure construction, strengthening of environmental protection, increasing demand for equipment renewal, and artificial substitution effect. In addition, the growth of excavator sales in the first three quarters of this year shows that the booming market demand is still heating up, and the industry leading effect trend is obvious. From January to September, the top six excavator enterprises accounted for about 75% of the total market share. Sany's product competitiveness has been significantly improved, ranking at the forefront of the domestic market, and its market share is still further improved. "

Thanks to the high growth of the annual performance of leading enterprises, the whole construction machinery industry is booming, and the industry prosperity is constantly improving. Chen Xianfan, an analyst at Soochow securities, pointed out: "we expect the annual sales of excavators to reach more than 300000 units, with a year-on-year growth of more than 30%. In 2021, although the overall growth rate of the industry will decline, it will still maintain a stable growth; excavators will maintain a certain growth due to the demand for small excavation and the replacement of loaders. In the next few years, it is estimated that the fluctuation rate of construction machinery industry will maintain positive and negative 5% - 10%, and the volatility will be much smaller than that of the previous round, and it is expected to enter into the next big update cycle after 2024. In the low volatility cycle, more emphasis is placed on the improvement of the company's product competitiveness and production efficiency, so it is good for leading enterprises. "

Keep improving

Excavator is one of the most important types of construction machinery, and also one of the most sensitive machinery varieties to the change of downstream demand, which is closely related to the macroeconomic cycle. According to CME observation, the sales volume of excavators (including export) is expected to reach 25300 units in October, with a year-on-year growth of about 48%, still showing a high growth rate, and the peak season in the fourth quarter will continue.

Therefore, the excavator is also known as the "barometer of infrastructure". It is generally believed that the demand brought about by the resumption of work and production, infrastructure construction and real estate in China is the main reason for the continuous growth of construction machinery sales, and also conveys a positive signal that the domestic economy is in a sustained and rapid recovery.

According to the public data, in the first three quarters of 2020, the cumulative sales volume of excavator industry was 236500, with a year-on-year increase of 32.0%, exceeding the total output of last year; in the first quarter, the second quarter and the third quarter of 2020, the sales volume were respectively 68600, 101800 and 66100, with a year-on-year growth of 8.2%, 63.1% and 57.4%, and the off-season of the third quarter was not weak.

From the demand side, the promotion of infrastructure projects and the increase of infrastructure investment provide endogenous power for the development of construction machinery. From January to September 2020, the investment in fixed assets (excluding farmers) increased by 0.8% year-on-year, and infrastructure construction (excluding power, heat, gas and water production and supply) increased by 0.2% year-on-year. In the first three quarters, a total of 337 million yuan of special bonds were added nationwide, a significant increase of 58% over the same period of last year, and the proportion of special bonds used for infrastructure construction projects increased significantly. In the first three quarters, the investment in infrastructure fixed assets grew by 2.42%, and the investment in real estate fixed assets increased by 3% from January to August, both of which maintained stable growth. Meanwhile, the decline rate of new housing construction area continued to shrink to 3.4%. As required by the Ministry of finance to speed up the issuance of local bonds, the speed of financial funds in place will directly accelerate infrastructure investment. From the supply side, the upstream parts manufacturers can also confirm the sustained prosperity of the downstream in the near future. In October, the production scheduling growth rate of construction machinery core parts manufacturers was higher, and the orders of downstream main engine manufacturers were sufficient.

On the other hand, in terms of the sales structure of excavators in September, the sales volume of small, medium and large excavators increased by 63%, 106.4% and 52.5% year-on-year, respectively, accounting for 58.3%, 27.9% and 13.8% in September. In September, 6311 sets were sold, with a year-on-year growth rate of 106.4%. The market demand was close to that of China mining.

Xiang Wenbo pointed out: "in the future, with the continuous promotion of the construction of" two new and one high "in the fourth quarter and the implementation of a number of major and extra large projects, the construction machinery industry will still maintain a high boom and the growth momentum is expected to continue."

Guoyuan securities predicted that "the sales volume in the fourth quarter will account for 21.7% - 24.4% of the whole year, and the total sales volume in 2020 will be about 300000-311000 units. At the same time, the introduction of new emission standards will drive a large number of equipment updates, and further expand the demand market of construction machinery. "

Industrial robot recovery

Affected by the epidemic situation, the production of industrial robots will drop in early 2020. After the relief of the epidemic situation, the output rapidly recovered and the industry gradually recovered. According to the National Bureau of statistics, the output of industrial robots in August was 20663 sets, an increase of 32.5% year on year.

In September, the recovery of the industry continued. The output of industrial robots increased by 51.4% year-on-year, which was the peak in 33 months. Compared with August, the growth rate was significantly larger, and the recovery of the industry was further accelerated. From January to September, the cumulative output of the industry was 161000 sets, with a year-on-year increase of 18.2%.

According to the world robotics report 2020 released by IFR recently, 2.7 million industrial robots will run in factories around the world in 2020, an increase of 12% compared with last year.

From the demand side, China's manufacturing PMI index was 51.1% in September, which was above the critical point for seven consecutive months, and the manufacturing industry was booming. China's industrial robots downstream mainly serve the fields of automobile and 3C manufacturing. At present, the automobile and 3C product manufacturing industry is also continuing to improve. In September, the automobile production and sales continued to grow, with a year-on-year increase of 14.1% and a year-on-year increase of 2.9%. In August, the added value of automobile manufacturing industry increased by 14.8% year-on-year, and that of computer, communication and other electronic equipment manufacturing industry increased by 8.7% year-on-year.

From the perspective of industry development, according to buy shares data, as of September 2020, China, Japan and the United States accounted for 58.71% of the global industrial robot installation, of which China accounted for the largest share. In 2019, the actual density of industrial robots in China is 79 sets / 10000 people, which is still lower than the global average of 91 sets / 10000 people, and is far behind the developed countries. In the huge industrial robot market, China has a broad development prospect.

According to the forecast data of Guoyuan securities, the compound growth rate of sales volume of industrial robots will reach 19.1% from 2020 to 2024. In recent years, domestic high-quality robot enterprises have risen and their market share has been increasing. It is expected to conform to the development trend of the industry and further expand the market scale.

However, it is worth mentioning that the second recurrence of the epidemic may slow down the recovery speed of the industrial robot industry. Milton Guerry, President of IFA robotics Association, previously pointed out that robot suppliers' adaptation to the new normal of the new crown epidemic will determine sales in the remaining months of 2020, and they are unlikely to profit from large orders this year. "China may be an exception, its economy has started to recover in the second quarter. Globally, 2021 will see a recovery in demand for automation projects and robots, and the industry will return to pre epidemic levels or by 2023. "

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