Machinery industry: the decline in excavator sales expanded in March, and the manufacturing industry was under short-term pressure affected by the epidemic

Machinery industry: the decline in excavator sales expanded in March, and the manufacturing industry was under short-term pressure affected by the epidemic

Market review: this week, the mechanical equipment index fell 1.03%, the Shanghai and Shenzhen 300 index fell 1.06%, and the gem index fell 3.64%. Mechanical equipment ranked 10th in all 28 industries. After excluding negative values, the valuation level of the machinery industry is 22.7 (overall method). The top three sectors in the machinery industry this week are construction machinery, rail transit equipment and instruments; From the beginning of the year, the growth rate of oil and gas injection molding machine and instrument development are respectively three segments.

Zhou concern: the decline in excavator sales expanded in March, and the manufacturing industry was under short-term pressure affected by the epidemic

In March, the decline of excavator sales expanded, and the export continued to grow. According to the statistics of China Construction Machinery Industry Association, in March 2022, 26 excavator manufacturing enterprises sold 37085 excavators of various types, a year-on-year decrease of 53.1%; Among them, there were 26556 sets in China, a year-on-year decrease of 63.6%; 10529 sets were exported, a year-on-year increase of 73.5%. From January to March 2022, 77175 excavators were sold, a year-on-year decrease of 39.2%; Among them, there were 51886 sets in China, a year-on-year decrease of 54.3%; 25289 sets were exported, with a year-on-year increase of 88.6%.

Bloomberg reported that the construction machinery sector rose sharply, and the growth of domestic demand is still weak at this stage. The construction machinery sector performed well this week, with the index rising by 6.3%, mainly due to the recent Bloomberg report that China’s infrastructure investment will reach at least $2.3 trillion in 2022, triggering a warm response from the market. However, it can be seen that the data of Bloomberg basically corresponds to the total investment plans of major projects in all provinces, which is quite different from the indicators of infrastructure investment in China this year. From January to February this year, the new construction area of houses in China decreased by 12.2%, and the real estate investment is still weak. The annual infrastructure investment is expected to maintain a steady growth. Superimposed on the downward trend of equipment renewal demand, the sales volume of excavators has continued to decline year-on-year since the second half of last year. We believe that all economic data show that the domestic demand of China’s construction machinery industry is still insufficient at this stage, and the investment needs to wait for the inflection point of demand.

Affected by the epidemic, the performance of manufacturing enterprises is under pressure in the short term. Under the influence of the continuous rebound of this round of epidemic, the downward pressure on China’s economy is increasing. For manufacturing enterprises, on the one hand, the demand side is restrained; On the other hand, under the relatively strict epidemic prevention and control measures, some enterprises have stopped production, limited personnel flow, reduced domestic logistics capacity, affected the production, delivery, acceptance and other links of enterprises, and significantly reduced the efficiency of the supply chain, which may affect the performance of enterprises in the first quarter and even the first half of the year. As the epidemic situation is gradually controlled, the production and delivery capacity of enterprises will be restored. In order to alleviate the impact of the epidemic and geopolitical situation on China’s economy, the main line of steady growth will be more prominent, and manufacturing investment will become an important driving point. We continue to be optimistic about photovoltaic equipment, new energy vehicle industry chain, industrial machine tools, specialization and innovation and other segments of the mechanical equipment industry in line with the development trend of the times for a long time.

Investment suggestions: long term optimistic about the investment opportunities in the mechanical equipment industry under the main line of steady growth. The key investment directions include photovoltaic equipment, new energy charging and replacement equipment, industrial robots, industrial machines, specialized and special new and other subdivided fields. In terms of beneficial targets, in the field of photovoltaic equipment, Jingsheng Electromechanical, Maiwei Co., Ltd., Jiejia Weichuang, dill laser, altway, Jinbo Co., Ltd., Tianyi Shangjia, etc; In the field of power exchange equipment, Hanchuan intelligence, Bozhong Seiko, Shandong Weida, etc; Industrial robot field Esther, green harmonic; In the field of industrial machine tools, genesis, Haitian Seiko, Kede CNC, Qinchuan machine tool, Guosheng Zhike and Yawei Co., Ltd; Specializing in new fields, cutting-edge shares, etc.

Risk warning: covid-19 pneumonia is recurrent. The degree of policy promotion is less than expected; The growth rate of manufacturing investment was lower than expected; Intensified industry competition, etc.