Excavator Sales Will Rise By 40% In 2020, And Demand Resilience Will Boost The High Prosperity Of The Industry

In 2020, the construction machinery industry data exceeded expectations.

According to the industry statistics of China Construction Machinery Industry Association, from January to December 2020, 25 main engine manufacturing enterprises included in the statistics sold 327605 sets of mining machinery products, with a year-on-year increase of 39.0%. The domestic market sales volume was 292864 sets, with a year-on-year increase of 40.1%. The export sales volume was 34741 sets, with a year-on-year increase of 30.5%.

In December 2020, 25 enterprises sold 31530 mining machinery products, up 56.4% year-on-year. Among them, Sany Heavy Industry sold 10326 sets, accounting for 32.7% of the market.

In addition, Zoomlion, one of the four construction machinery giants, released its performance forecast for 2020 on January 20. According to the forecast, the company will achieve a net profit of 7-7.5 billion yuan to the parent company in 2020, with a year-on-year increase of 60% - 72%, and the net profit after deducting non-profit increases by 73.58% to 93.5%.

Zoomlion believes that domestic infrastructure, new energy and other downstream industries demand remains high, and "two new and one heavy" related projects expand the construction machinery industry space.

Zou Runfang, an analyst at Tianfeng securities, pointed out: "the global excavator conference in 2020 is optimistic about the demand in 2021. It is expected that the industry will maintain positive growth, with the growth center of about 10%, and some of them are optimistic, and the industry growth rate is expected to be more than 15%. It is estimated that the construction machinery sector is expected to maintain a stable development in 2021, and the high prosperity of the industry is expected to continue. According to the calculation, according to the expected sales growth, the order is pump truck, crane and excavator, and the replacement of domestic hydraulic parts is expected to be fully promoted. "

Demand resilience

As a representative of the construction machinery sector, the sales volume of excavator industry has been growing for 4.5 years since April 2016.

According to Haitong Securities analyst she Weichao observation, 2019 From March to November, the accumulated investment in fixed assets continued to decline year on year, while that from February to August in 2020 was negative. However, under the background of relatively weak macro investment intensity, the industry sales showed "deviation from macro" for many times, especially in the two "small peak seasons" of the second half of 2019 and the second half of 2020, showing an upward acceleration inflection point.

She Weichao analyzed that the main reasons for the above phenomenon may be the environmental pressure, the demand potential stimulated by equipment price reduction, and the irreversible increase of human cost and economic development. "In the next two years, the national level may introduce the policy of" state three "to" state four ". According to the information from China Road Machinery Network, local governments have tightened the right of way for low emission standard vehicles in advance, driving the replacement of old equipment. This is the main driving force behind the booming sales in the second half of 2019. At the same time, affected by the import substitution of core components and the localization of main engine, we estimate that the price of mainstream excavators has decreased by 20% - 30% since the end of 2018, which has greatly stimulated the demand potential for excavators to replace manpower and squeeze the second mobile phone transaction, and promoted the upgrading of customer demand, that is, the pursuit of efficiency and the development of large-scale equipment. Therefore, we believe that this is a new logic of booming sales since the second half of 2020. On the other hand, as we all know, the downward substitution of excavators for other types of earth moving machinery and various types of labor is very significant. With the continuous rise of construction industry and rural labor prices, we have observed that the use of excavators is more fragmented and the application scope is gradually increasing. "

"On the macro level, there are also positive changes. On the one hand, projects with slower progress in the second half of last year can be released in the peak season of this year under the background of accelerating the issuance of special bonds. The rise in international commodity prices has brought about a strong recovery in demand for large-scale mining. In addition, with the success of the "new crown" vaccine in the future, overseas export demand will grow rapidly on a low base. Overall, we believe that the resilience and upward elasticity of excavator demand in the next two years should not be underestimated. Excavators may still be the best performing category in construction machinery. " She added.

The strong are always strong

According to the data, from 2000 to 2012, the number of newly established enterprises in China's construction machinery manufacturing industry has remained at the range of 20000-100000; since 2013, the number of newly established enterprises in China's construction machinery manufacturing industry has increased significantly. In 2020, the number of newly established enterprises in China's construction machinery manufacturing industry was 1.196 million, which was 12.51% higher than that of 1.063 million in the whole year of 2019.

The construction machinery industry presents a prosperous situation, at the same time, the industry concentration gradually increases, and to the head enterprises, the strong constant strong effect is prominent.

According to the statistics of Hua'an securities, the concentration ratio of the construction machinery industry will continue to increase from 2012 to 2019. The market share of the top three companies in the industry will increase from 29.4% to 52.3%, an increase of 22.9%; the market share of the top eight companies in the industry will increase from 60.4% to 80.4%, an increase of 20 percentage points. From January to September 2020, the industry concentration will not increase The market share of the top three and top eight companies in the industry is 52.7% and 81.2% respectively.

It is worth noting that the global supply substitution of made in China is obvious, and the integrity and stability advantages of the industrial chain are highlighted. China has gradually accepted orders from Europe, the United States and Japan, and the process of import substitution is accelerating day by day. For example, in the field of construction machinery, domestic main engine plants such as Sany Heavy Industry and XCMG Machinery Co., Ltd. have accelerated to replace foreign-funded ones, while Hengli hydraulic and Aidi precision have gradually replaced KYB, Kawasaki heavy industry, Rexroth and other traditional hydraulic parts brands. From the perspective of the market share of brands in different regions, the cumulative market share of domestic brands from January to September 2020 has reached 69.03%, with a year-on-year increase of 6.85%, while the market share of Japanese and Korean brands has declined significantly.

Hua'an securities machinery research team pointed out that the construction machinery industry has transformed from incremental market to stock market. In the stock market game, leading enterprises will rely on three advantages (product service advantage, supply chain advantage and capital advantage) to continuously seize market share, and rely on innovation drive to build a deeper brand moat. After the reshuffle of price war, the industry pattern will be more optimized The strong are always strong, and the rest are the king.

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