Decline in sales of construction machinery may continue until the end of the year

Recently, the major domestic construction machinery listed companies issued the first-half report, in which 11 companies such as Sany, Zoomlion, and XCMG realized a total operating income of 77.385 billion yuan in the first half of the year, an increase of 54.51% year-on-year, and a net profit of 10.139 billion yuan. Increased by 72.58%. Starting in April, monthly sales of all kinds of models of listed companies of construction machinery have declined at different rates. The overall growth rate of the construction machinery industry is an indisputable fact, and it is expected that this decline will be difficult to reverse in the second half of the year.

Slowdown in growth In the first half of this year, market demand generally slowed down. Construction machinery companies still achieved large growth, but this growth rate is gradually slowing down.

The results released by Sany Heavy Industry showed that in the first half of the year, Sany Heavy Industry achieved operating revenue of 30.363 billion yuan, an increase of 79.18%; operating profit of 7.332 billion yuan, an increase of 104.07%; and net profit attributable to shareholders of listed companies was 5.939 billion yuan. The year-on-year increase of 106.57%. Both operating income and profits have doubled.

Xugong Machinery achieved operating revenue of 19.51 billion yuan, an increase of 43.54% compared with the same period last year (adjusted) of 135 yuan; operating profit of 26 yuan, an increase of 15.74 yuan over the same period last year (adjusted), an increase of 67.94%; net profit attributable to shareholders of listed companies 22.29 billion yuan, an increase of 61.70% over the same period last year (adjusted) of 1.378 billion yuan. The sales revenue of the company has increased significantly compared with the same period of last year.

Zoomlion's performance forecast shows that in the first half of the year it is expected to achieve a net profit of 4 billion to 4.6 billion yuan, an increase of 80% to 110%.

However, with the completion of domestic 4 trillion investment in the domestic construction machinery industry, the rapid growth of the high-speed rail and real estate industry continued to deteriorate in the past two years. China Gold analysts believe that the domestic 4 trillion yuan stimulus investment, real estate construction and credit easing in the rapid growth of last year and early this year released part of the market demand in the second half.

In the first quarter, the domestic construction machinery industry ushered in the highest sales growth and began to decline in April. China Construction Machinery Association statistics show that in April, the growth rate of sales of all kinds of construction machinery products has declined significantly, and the sales volume of excavators, loaders, bulldozers, roller machines increased by 25.3%, -2.9%, -1.0%, respectively. 0.7%, compared with the growth rate in March decreased by 18.7%, 40.1%, 72.1%, 19.7%. The month-on-month decline in loaders is the largest year since April 2001. According to industry sources, in general, the slight decline in sales volume in April was a normal seasonal fluctuation in the construction machinery industry, but the huge decline of 30% in the entire industry in April this year was indeed rare.

He Jun, president of the China Construction Machinery Industry Association, predicted that “China’s construction machinery industry has experienced an average annual growth rate of 30% in the past ten years, and it is expected that this year's growth rate will be 17%.”

Continue to decline It is reported that the decline in sales in April this year has continued to August, is expected to continue until the end of this year. A market official said that the average annual July and August is the off-season sales of construction machinery, and the off-season is likely to be even lighter this year. In September of the peak sales season, it is estimated that the rate of recovery will not be large. It is expected that the downward trend of the chain will continue to be maintained throughout the second half of the year.

According to the latest economic data, China is far from witnessing the need to stop monetary tightening, and the country is likely to insist that the current policy remains unchanged. As the Chinese government has changed the growth model that used to rely on investment to stimulate the economy, the high growth of the construction machinery industry is difficult to sustain.

Some experts even anticipate that a more stringent tightening policy will be introduced in the second half of the year than in the first half of the year.

Now that the high-speed rail construction is seriously affected by the “7.23” motor vehicle safety accident, it is difficult to quickly restore rapid growth in the short term. This year, the 10 million sets of affordable housing projects established by the state in the real estate industry and the central government's No. 1 document to invest in water conservancy projects this year can only promote the market demand in peak seasons. In the off-season of project construction, the uncertainty in the construction of affordable housing around the country and water conservancy construction It is difficult to bring about a substantial increase in sales of the construction machinery industry.

A brokerage researcher pointed out that the current industry has two positive benefits: the impact of affordable housing and water conservancy construction on sales of construction machinery industry is likely to be lower than expected.

As the country's economic growth slows down and the market demand for construction machinery falls, the decline in sales of construction machinery will be difficult to reverse throughout the second half of the year.

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