Analysis of construction machinery industry in the second half of the year

The investment strategy of the machinery industry in the second half of 2013: Feasts and problems in the transition period. Transformation is the hottest term for the government and the market. In the mechanical sector, it is concentrated in energy transformation, efficiency improvement and emerging industries.

Under the guidance of the policy, companies have sought to develop their own way of development under the transformation. This is a feast of investment by listed companies, and it is also the pain of investment. Before macroeconomic reforms are effectively implemented, energy reforms, efficiency enhancements, livelihood equipment, and emerging industries are still worthy of attention. At the same time, from the bottom up, listed companies with low valuations and strategic adjustments into new industries are selected. For a cyclical product that is mainly based on construction machinery, it is necessary to pay close attention to the expected changes in the real estate start-up. This determines the inflection point.

Construction machinery: sales volume is tepid, waiting for the real estate new construction is expected to rise. In June, excavator sales were 8,328 units. From the seasonal perspective, the sequential decline (-28%) was slightly higher than the 2006-2010 average seasonality (-24%). According to the macro data, infrastructure investment remains high, real estate sales are weak, and new construction starts. Our point of view: the bottom range, waiting for the start of new real estate construction is expected to rise.

The leading indicators for sales of construction machinery are high in infrastructure investment; at the same time, the hourglass for construction machinery investment logic has shifted from infrastructure to real estate. If real estate sales continue to rise and real estate policies are expected to stabilize gradually, new start-ups of real estate are expected to gradually recover instead of falling sharply again, as inventory levels gradually decline. Real estate sales and new start-up expected to go from negative to positive, will drive the stock price of engineering machinery to stabilize and pick up.

Rail transit: The acceleration of railway investment in the second half of the year is in line with expectations. It is worth thinking about where the future of railway development will go. The restructuring of the Ministry of Railways has made the investment in railways so far this year have been low, and has also suppressed the performance of the entire sector stocks. In spite of this, all parties clearly stated that the investment in railway fixed assets established at the beginning of the year was RMB 650 billion (including RMB 520 billion in capital construction) for the whole year, which means that the investment in fixed assets accounted for only 30% in the first half of the year. In the case of the left and right levels, the speed increase in the second half of the year is also an inevitable situation and falls within the expected range. Therefore, from the perspective of stock prices, there is also a chance of a rebound in anticipation of rectification. After Liu Zhijun’s dismissal, the model of the railway’s rapid advancement was terminated; at the same time, after the railway company’s presence in the form of a company, the industry’s development will also It will no longer be like a government-led model. It will enter a more market-oriented stage. Whether investment or construction will be more related to capital costs and investment income.

Therefore, we believe that from the big trends, the “railway investment and financing system reform” referred to by the prime minister is the core of the continued growth of the industry as a whole, how to introduce private capital into the railway, and what kind of income level will be given to enter the capital. It is the content that we need to focus on and research, and this will be a big opportunity to re-elevate the valuation of the entire sector and obtain excess returns.

Smart equipment: China's robot market has great potential. There are two main reasons: (1) The scale of the machine tool industry indicates that there is a huge demand for automated processing equipment in China's manufacturing industry; (2) The use density of robots in China is still at a very low level, and the increase in robot use density will drive the demand for robots. Promote. By comparing the United States, Germany, Japan, and South Korea, we estimate that China's robot market will exceed 1.6 million units, compared to less than 100,000 units currently assembled, there is still huge room for development.