Excavator Sales Decreased By 6.2% In June Compared With The Same Period Last Year, And The Inflection Point Of "Super Cycle" In Five Years Loomed

The inflection point of the super cycle of excavator may have come quietly.

On July 7, the 21st century economic reporter learned from the China Construction Machinery Industry Association that the 26 main engine manufacturing enterprises included in the statistics from January to June 2021 sold 223833 mining machinery products, with a year-on-year increase of 31.3%. In June, a total of 23100 mining machinery products were sold, a year-on-year decrease of 6.2%. Among them, 16965 sets were sold in the domestic market, with a year-on-year decrease of 21.9%; The export sales volume was 6135 sets, with a year-on-year increase of 111.5%.

In the secondary market, the share prices of leading construction machinery companies have reflected the downturn of the industry in advance: Sany Heavy Industry (600031. SH), Liugong (000528. SZ), XCMG machinery (000425. SZ) have been falling continuously recently. Sany Heavy Industry closed at 26.2 yuan / share on July 7, which is close to a cut from the highest 49.7 yuan / share (the former resumption price) in mid February this year.

"The main reason for the recent decline in growth rate is that the moving forward of sales peak season has advanced the demand of the second quarter, and the low commencement of new projects under the influence of policies. This influence factor is expected to ease in the third quarter, and the industry sales volume is expected to achieve 20% growth in the whole year. " On the other hand, since June 16, Sany, Xugong, Lingong and Liugong have issued price increase notices. On the whole, the prices of small diggers have increased by 10%, while those of zhongdig have increased by 5%, which fully reflects the discourse power of leading enterprises in the industrial chain.

The inflection point of the super cycle of excavator may have come quietly. Xinhua News Agency

Domestic growth downshift

Previously, CME construction machinery network had predicted that the sales volume of excavators (including exports) in June was about 20500, with a year-on-year growth rate of - 16.75%. Among them, the domestic market is expected to sell 15500 units, with a growth rate of - 28.65%; The export market is expected to sell 5000 units, with a growth rate of 72.35%.

In contrast, the domestic market downshift speed of excavators is more gentle than expected, while the growth rate of export sales in the international market is far more than expected. According to CME's cautious forecast, the growth rate of excavators will be greatly "downshifted" in the second half of the year, and the excavators are expected to maintain double-digit growth in the whole year, and the sales volume is expected to exceed 380000 units.

In fact, the decline in domestic demand began to show in May. According to the data of the National Bureau of statistics, in May 2021, the output of excavators was 36102, a year-on-year decrease of 18.8%. From January to may, the cumulative output of excavators was 235183, with a year-on-year increase of 37.1%, and the year-on-year growth rate has declined for two consecutive months.

This relatively pessimistic expectation is also reflected in the share price of excavator leading enterprises. At present, Sany's share price is maintained at around 26 yuan, with a total market value of only about 220 billion yuan. Compared with the high of 49.70 yuan / share (the former resumption price) in mid February, Sany's share price has nearly halved in recent months, and its market value has evaporated by nearly 200 billion yuan. Liugong and Xugong also fell about 30% from the year's high.

However, on the whole, the output of main machinery and equipment in the first five months of 2021 is on a year-on-year growth trend. Among them, the growth rate of large-scale production was the fastest, with a year-on-year growth rate of 60.5%.

Since May, the year-on-year growth rate of domestic market sales has dropped sharply. Li Lujing, an analyst at Tianfeng securities, said: "first of all, affected by the local holiday policy, the traditional spring sales peak season in 2021 moves forward, and the market sales in February and March greatly exceed the expectation, especially the ultra-high sales volume in March prepays the market in April and may; Secondly, the demand of small excavation has fallen down under the high growth in the past few years; In addition, due to the rise of raw materials and special debts, some infrastructure projects have not yet started. From late April to early May, affected by environmental supervision, some areas have stopped work, and the demand for medium and large-scale excavation has been delayed. "

Ruida futures analyst Chen Yilan believes that the domestic sales volume of excavators in May and June has its rationality“ In the long run, construction machinery has a strong periodicity. In the past five years, the super boom cycle was mainly driven by the demand for replacement. At present, the expectation that the cycle peaked began to increase; The investment in construction fixed assets has decreased, showing a downward trend since 2019, which will also reduce the potential demand for machinery in the future; At the same time, the issuance of bonds by local governments has reached the peak. The Ministry of finance has issued a new limit of 4267.6 billion yuan in 2021, including 3467.6 billion yuan of special debt. Moreover, the possibility of increasing in 2022 is low, and the driving force for the demand for construction machinery will decline. "

Overseas market may maintain high growth

It is worth noting that since last year, the global commodity price volatility has intensified, and the domestic steel price has been rising all the way in this round of fluctuation, and the rise rate of a number of steel varieties, including ribbed steel, is far more than expected.

In this case, the domestic excavator leader adjusted the price several times to cope with the rise of upstream raw materials.

In the middle of June, Sany Heavy Industry, XCMG machinery and Liugong successively issued the third wave of price increase announcements since this year, and decided to raise the price of small excavation by 10% and medium excavation by 5% from June 16.

Sany said in the above excavator price adjustment letter that due to the continuous sharp rise in the prices of steel and other bulk materials since last year, the international epidemic situation has also caused a great impact on the upstream and downstream of the industrial chain at home and abroad, and the suppliers are facing great pressure, resulting in a substantial increase in comprehensive costs.

In the case of relatively weak domestic demand and rising upstream raw material prices, the rapid growth of export volume has become the main reason for the industry's relatively optimistic trend in the second half of the year.

Yao Jian, an analyst at Guosheng securities, pointed out that last year's base factor was superimposed on the construction off-season, and the domestic demand in the third quarter of this year is expected to maintain a decline. However, overseas exports are accelerating, and it is expected that the doubling growth trend will remain“ For the total domestic demand, the cyclical expectation is gradually weakening. Under the resonance of factors such as artificial substitution, old machine renewal and stricter environmental protection, the domestic market demand in 2021 is full of resilience. However, in the international market, domestic leading manufacturers are gradually catching up with foreign brands in terms of products, brands, channels and scale efficiency, and the domestic market is expected to continue to move forward. After years of layout accumulation, domestic manufacturers have entered the product export period. The incremental demand of overseas emerging markets is strong, and the demand center of European and American markets is high. The export is expected to become an important pole for the sales growth of domestic leading manufacturers. "

Galaxy Securities analyst rupee said that the construction machinery industry has a high degree of market concentration. In recent years, the market share of domestic brands has increased, and the market share will continue to tilt to the leading enterprises. From the global point of view, China has become a big manufacturing country of construction machinery; The output of loaders, excavators, truck cranes, road rollers, forklifts, bulldozers, and concrete machinery ranks first in the world. The market share of domestic leading excavator brand has been further improved. With the intensified competition, small and medium-sized construction machinery enterprises with weak strength will be gradually eliminated in the future, and the market share of leading enterprises will continue to increase.

In this regard, Zheng Liansheng of Bohai Securities predicted that in the future, with the gradual alleviation of the global epidemic situation after the popularization of vaccines, the export data of excavators will maintain a steady recovery, and the overall sales volume of excavators is expected to increase by more than 10% in 2021.