Machinery industry: Excavator growth slows down in line with expectations

Summary of contents: The gradual slowdown in sales growth is in line with expectations: Affected by the gradual fall in high base and fixed asset investment last year, the year-on-year growth of excavator sales in April has gradually slowed to 25%, which is in line with our expectations. In April 2011, excavator sales reached 27,000 units, a month-on-year increase of 25.3%, a slowdown of 18.7 percentage points from the growth rate in March (44.0%), and cumulative sales of the excavator industry reached 102,000 units in January-April. , a year-on-year increase of 48.8%, which is a slowdown of 11.0% from the cumulative growth rate of January-March (59.8%).

The announcement of a gradual slowdown in the growth of the industry's website and the promotion of industry information work is in line with expectations. Affected by the gradual fall in high base and fixed asset investment last year, the year-on-year growth of excavator sales slowed to 25% in April. The expectation.

Industry status:

In April 2011, excavator sales reached 27,000 units, a month-on-year increase of 25.3%, a slowdown of 18.7 percentage points from the growth rate in March (44.0%), and cumulative sales of the excavator industry reached 102,000 units in January-April. , a year-on-year increase of 48.8%, which is a slowdown of 11.0% from the cumulative growth rate of January-March (59.8%).

comment:

1) The gradual slowdown in sales growth is in line with expectations: Affected by the gradual fall in high base and fixed asset investment last year, the year-on-year growth of excavator sales in April has gradually slowed to 25%, which is in line with our expectations. Looking ahead, we believe that the degree of real estate regulation and credit tightening will restrict the overall trend of industry development. At present, we still maintain our judgment at the beginning of the year. In 2011, the excavator industry is still expected to achieve stable growth of more than 25%;

2) High growth of domestic brands and significant increase in market share: In April, domestic leading companies Sany, Liugong, Xiagong, Shanhe, and Longgong achieved sales of 3,208, 806, 374, 847, and 881 units, respectively. With a growth of 128%, 16%, 11%, 44% and 36%, the market share of domestic manufacturers has increased significantly. Among them, the market share of Sany Heavy Industry reached 11.7% in one month, which is even closer to the leading industry leader Komatsu (11.9%);

3) The growth rate of foreign brands is low, and some of them show a downward trend: the overall growth rate of foreign brands is not high. In April, Komatsu and Hyundai Jiangsu excavator sales increased by 5.9% and 3.3% year-on-year, respectively, while Doosan and Hitachi declined by 7.3% respectively. % and 16.1%. We believe that, apart from the large-scale market share gained by domestic manufacturers due to cost-effectiveness, and partly due to the impact of the earthquake in Japan, the supply of core components of foreign brands is subject to certain restrictions.

Valuation and recommendations:

The engineering machinery sector's PE valuations for 2011 and 2012 were 13.8 and 10.8, respectively. Looking forward, we believe that the company is in a performance vacuum period from May to June and is facing uncertainties in macro-control, and there is no obvious catalyst in the construction machinery sector. In the long term, we are still optimistic about the continued growth of the industry during the year, and we still recommend investors to take advantage of dips to attract quality leading companies.

risk warning:

Macro-control exceeded expectations, and the sharp increase in the prices of raw materials such as steel products affected the level of gross margins.