Construction Machinery in 2013 or Moderate Growth

In 2012, the Chinese construction machinery industry was still struggling in the winter, and both manufacturers and agents felt pressure. In this rejuvenating season, we will review together the difficult years of those tangled and frustrating years in 2012. Those exciting and exciting journeys were jointly explored in the context of China’s economic restructuring and the 2013 construction machinery industry. Prospects. From the moment to the moment, 2012 has gradually drifted further and further away.

In the past year, the negative factors such as inventory pressure, the sharp increase in accounts receivable, and the sluggish economic environment have been accompanied by the construction machinery industry in China. For more than a year, although the sound of the industry’s recovery has continued, it has not been able to make it. In the industry, we see innovation and progress. We can also see the confusion and embarrassment. For the future vision, entrepreneurs are full of confidence, but they can also feel their anxiety and worry about the current difficult situation.

The theme of 2012 CCTV China Economic Person of the Year was: The mission of industry, from which we can see that returning to the real economy and strengthening the real economy have become the consensus of all countries in the world. The construction machinery industry, as an important part of the industry, deserves due attention and development. Sany Group Chairman Liang Wengeng, Chairman of Shenyang Machine Tool Group, Guan Xiyou, China Shipbuilding (industrial Group Chairman Hu Wenming... These outstanding industrialists have all won the 2012 Chinese economic year figures. In fact, even if the market runs low, as long as the company We can still be comfortable in the crisis, and Germany has set an example for us and has performed well in the debt crisis in Europe.

In 2012, the reduction in the market demand of the construction machinery industry is the biggest dilemma faced by the industry. Since April 2011, the entire construction machinery industry has entered a period of low growth. So far it has been 20 months. Such a long period of market downturn has made many companies feel pressured. Take an excavator company as an example. As of the end of November, the market sales fell by 35.84% compared with the same period in 2011. Although half of this was due to digesting inventory, the decline was still significant. Trade protectionism has further intensified. For example, in Brazil, after adjusting for import tariffs on industrial products in September, the competitiveness of China's construction machinery products has dropped drastically, and there has even been a case of selling one at a loss.

According to the data released by the China Federation of Machinery Industry on December 24, as of the end of November, the national construction machinery industry achieved an industrial output value of 545.312 billion yuan, a cumulative year-on-year increase of negative 0.43%, and a sales value of 536.683 billion yuan, a cumulative increase of 1.17 years. %. The sales ratio was 98.42%.

This year, the construction machinery industry is facing a very serious situation. According to November's data, whether it is the total output value of industrial output or the value of export delivery, the absolute amount and the year-on-year growth rate are even worse than last year, but the chain ratio has increased significantly, indicating that market demand is improving. If you look at the production and sales rate simply, 101.1% is a very encouraging figure. It means that the company's inventory is declining and production capacity is starting to recover. In fact, because it is the rolling of inventory, although some space has been released, the pressure on enterprises has declined, but the pressure of inventory still exists.

In November 2012, China's construction machinery industry completed a total industrial output value of 42.963 billion yuan, a year-on-year negative growth of 15.82%, a year-on-year increase of 1.66%; achieved sales value of 43.45 billion yuan, a year-on-year negative growth of 15.82%, an increase of 3.52%. In October, the sales ratio was 101.1%, an increase of 1.79% compared with the previous month; the export delivery value was 2.768 billion yuan, a year-on-year increase of minus 5.32%, and the growth rate was 22.90%.

In November, there was a slight difference between the three sub-sectors of the construction machinery industry and their growth rates. Among them, the maximum growth rate of the production of special-purpose machinery for building materials production reached 22.05%, and the lowest growth rate of construction machinery manufacturing was negative 23.42%. Industrial sales value increased by 26.22% year-on-year to manufacturing of special-purpose machinery for construction materials, and machinery construction for construction projects had the lowest growth rate, which was negative by 19.18%.

The output of main products increased or decreased In November 2012, most of the five major products in the construction machinery industry had a slight year-on-year growth. Among them, the loader experienced a negative growth of 26.70%, while the growth rate of compacted machinery was significantly higher than the other The industry reached 28.45%.

From January to November, most of the cumulative product output of the construction machinery industry increased. Among them, the excavator had a negative growth of 34.80% year-on-year, while the concrete machinery growth rate reached 12.19%.

Corporate cash flow has been tested Under the background of slowing economic growth and drastic downsizing of downstream demand, many companies have reduced the pressure on their inventories. The irrational low down payment and zero down payment that have occurred in the construction machinery industry have caused a downturn in the market. The period has come out. Many of the company’s previous sales were reflected on the company’s balance sheet in the form of accounts receivable and did not form true cash flows. And it is difficult to judge how much these accounts receivable can be recovered.

At the same time, due to the downturn in the market and the irrational behavior of enterprises in the earlier period, some banks listed the construction machinery industry as an investment in high-risk industries, making it difficult for companies to make loans. This has also led to difficulties in the source of funds for enterprises and once again aggravated the pressure on corporate cash flow.

It is understood that a considerable part of the company's books, cash flow once appeared negative. This situation is terrible. Even if a company is big, once the cash flow is cut off and not replenished, it may cause the company to "suddenly die." How to make the best use of each penny and fully optimize the company's existing resources, the test will be a test of the company's executives.

Speeding up the pace of going out As the strategic position of the Chinese economy in the world continues to increase, more and more Chinese companies are constantly occupying the high ground of internationalization strategies. The more obvious and stronger this trend is, the more Chinese companies have received attention from the world. In 2012, China’s construction machinery enterprises “collectively went to sea” and became a landmark event on the road to internationalization of Chinese companies.

Guangxi Liugong announced at the beginning of this year that it had spent 335 million yuan to acquire the civil engineering machinery business of Polish HSW. In May of this year, the first loader at the Liugong Polish Base went offline, taking an important step in the local production of Chinese construction machinery products in Europe. Liu Gong, the president of Liugong, said that the main task of the acquisition was to integrate, including R&D integration, business integration, etc. Now the achievements can be said to exceed expectations. For example, on complex labor issues, by working with local trade unions, the production efficiency of Polish bases has increased by 40%.

In April of this year, XCMG announced the acquisition of a majority stake in Schwing in Germany. At the 2012 China International Construction Machinery Expo held here, Xu Gong and Shi Weiying appeared together to show that the acquisition has achieved initial success. Schwinger has a history of more than 78 years in the field of concrete equipment and has agents in more than 100 countries. Although XCMG's concrete equipment has developed rapidly in recent years, it is still a small gap from its competitors.

It is reported that Liugong's current overseas business accounted for 24%. After adding the Polish base, he hopes to exceed 30% in 2015 and 50% in 2020 to become a truly international company.

On April 17th, Hunan Sany Group Co., Ltd. acquired the 100% equity interest in Germany's Putzmeister (commonly known as "Elephant"), the first brand of global concrete machinery. The settlement of the equity transactions between the two parties was completed in Germany on the 17th.

A shock to the industry for a time. After swallowing the "elephant", the digestive process has become a hot topic of social concern. Sany Heavy Industry President Xiang Wenbo said that elephants have improved the technical strength of Sany, and Sany can solve the elephant's high-cost operating difficulties. After the two handed in, the German elephant's business has improved significantly. Sales revenue so far has increased by 30% year-on-year, and profits have been four times that of the same period last year. He made no secret of the fact that the European economy was in a downturn and gave Sany an opportunity to "hunt" in the international market. In the future, it may also have new overseas M&A targets. Luo Baihui, chief analyst of Jinmo Machinery Network, believes that the "collectively going to sea" of China's construction machinery companies represents a new trend for Chinese companies to go abroad: from the earlier targeting of physical assets such as energy resources to the attention to brands, technologies, and channels. Assets to drive the transformation and upgrading of China's manufacturing industry. But the challenge has already emerged. On the one hand, due to the global economic downturn, trade and investment protectionism have risen, giving the sea many obstacles. For instance, a Sany Affiliate’s acquisition in the United States has been rejected by the U.S. government. On the other hand, the international giants have stepped up their efforts to deploy the Chinese market. Chinese companies should also guard against the fire in the backyard while they are going to the sea. For example, Caterpillar Inc., the world’s largest engineering machinery company, stressed that although the growth rate of China’s construction machinery market has slowed and some products have even experienced negative growth, China is still the world’s largest construction machinery market. Caterpillar’s ​​China strategy will not be affected. Adjust for short-term economic fluctuations.

The good news has now added new impetus to the development of the industry. On December 4, the Politburo of the CPC Central Committee held a meeting to bring new hope to the construction machinery industry.

The meeting will adjust the economic work next year. The meeting pointed out that we must actively and steadily promote urbanization. A series of economic measures have become construction machinery to save the straw. The most attention-grabbing urbanization construction deserves to be a "high-speed car" that cannot be missed by the construction machinery industry.

According to relevant data, for every additional urban resident, the city needs to increase the investment in fixed assets by 500,000 yuan, and by increasing the urbanization rate by one percentage point, the rural population influx into the city will increase by 13 million (calculated by the population of 1.3 billion). Therefore, it will drive 6.6 trillion yuan in urban construction investment.

In 2020, China will have more than 50 cities to develop rail transit, covering more than 7,000 kilometers, covering major Chinese cities. Currently, China has completed and opened more than 1,700 kilometers of urban rail transit. The National Development and Reform Commission approved a total of 177 projects and 141 routes in the near-term planning and construction of 34 cities in May, June, and November. The total mileage is approximately 4382 kilometers, and the total investment exceeds RMB 2 trillion. With the construction of rail transit construction projects including Beijing and Xi’an, etc., the market demand for shield machines will enter an unprecedented period of rapid development.

Since September, real estate sales and new start-ups have shown a bottoming up, real estate development and investment growth rebounded, making sales data improved. In the first 11 months, the investment in real estate development nationwide totaled 6477.2 billion yuan, a year-on-year increase of 16.7%, and the growth rate increased by 1.3 percentage points from the previous quarter. In November, China's major excavator manufacturers sold 6,657 excavators, an increase of 12.4% qoq and a decrease of 25.3% year-on-year, a significant quarter-on-quarter increase, and the year-on-year decline was narrowed. Among them, domestic sales were 5,883 units, a year-on-year decrease of 30.2%; export sales were 774 units, an increase of 60.6% year-on-year; domestic sales and export sales increased year-on-year in comparison to October.

At the national televised conference on winter and spring farmland water conservancy construction held on November 19th, Minister of Water Resources Chen Lei said yesterday that the total investment in farmland water conservancy construction in the country in the winter and next spring is expected to exceed 336.4 billion yuan. This figure represents an increase of over 15% from the same period of last year when compared with the investment amount of 292.49 billion yuan that was completed last year.

According to the latest data released by the Ministry of Railways, the railway investment in fixed assets totaled 506.969 billion yuan in the first 11 months of 2012, an increase of 3.1% year-on-year, and 80% of the annual investment plan was completed. With the gradual recovery of railway investment, the performance of construction machinery companies will be strongly supported next year. Products such as earth and stone machinery, road construction machinery, piling machinery and hoisting machinery will be fully developed. At the same time, accessory companies will also face growth opportunities.

In 2013, the moderate recovery faced the most severe and longest challenge ever. Going out of the myth of high growth will leave more time for enterprises to think. Under the background of transformation, the transformation of engineering machinery manufacturing will become a topic we cannot avoid. Actively adjusting the structure and changing the way to improve product quality and enhance brand value will be the focus of the future development of the construction machinery industry.

At present, the trend of the industry to stabilize and stabilize has begun to become more clear. In November of the major season of suspension, railway investment remained high, construction of infrastructure projects such as new rural construction and high-speed rail projects was about to start, and the real estate industry gradually stabilized. The successively increasing projects will bring certain growth in demand to the construction machinery market, and the domestic economy will also stabilize. Pick up.

The destocking cycle of construction machinery industry will end at the end of the year. From the perspective of the overall inventory turnover rate of the industry, due to the slower rate of destocking than that of revenue, the inventory turnover rate in the first half of the year was obviously low, and the inventory turnover rate at the end of the third quarter was close to that in the same period of 2008. We expect that the overall inventory turnover rate of the industry at the end of the year will reach a more reasonable level.

The strength of the industry recovery in 2013 will be weaker than the level of the previous cycle. The restoration of infrastructure and real estate investment is the driving force for the development of the industry next year, but the strength of recovery is not optimistic. At the same time, the current profitability of downstream customers of construction machinery is generally not strong, which restricts the ability to purchase new aircraft.

Market share will continue to be concentrated in leading companies. In the market where cost leadership is the core competitive factor, the competitiveness of enterprises is reflected in the integration of industrial value chains. The basis is the scale of the company. Therefore, companies in the industry will try to expand. Overcapacity will be the norm in the future development of the industry. The result of industry competition will be market share to leading enterprises with scale advantages.

In the future, new urbanization will be a new round of opportunities for the development of the machinery industry. “New urbanization” has been identified as an important engine to lead the future development of China’s economy, while urban agglomerations are an important part of new urbanization. The development of urban agglomerations requires more investment in urban rail transit and infrastructure construction, which will provide new opportunities for the development of the machinery industry. It is expected that the demand for downstream investment will increase slightly in 2013. From the medium-term perspective, the worst period of China's construction machinery industry has passed. In 2013, it will enter a mild recovery stage. The second half of next year will be the turning point of the construction machinery industry.