Market丨Concrete machinery industry picks up, all parties are good or will usher in an outbreak

Concrete machineryIt is the first product in the field of construction machinery in China to reach the world's first level, especially after the successful acquisition of the world's three giants of concrete machinery by domestic enterprises, Chinese enterprises occupy the commanding heights of global concrete machinery, among which Zoomlion and Sany Heavy Industry are the leading enterprises in this field.

2012 has become an inflection point for the concrete machinery industry, and the industry has turned from a soaring to a sharp decline. From the perspective of the industry, the growth rate of sales and sales revenue declined, and the gross profit margin continued to decline. From the perspective of external reasons, the real estate investment market has declined, and the expansion of production capacity has been aggressive. Industry demand is severely overdrawn. As a result, concrete machinery, once a star product, has changed from a profit center to a loss center after several years of downward cycle, becoming a heavy burden for manufacturing enterprises.

The degree of recovery of the concrete machinery market determines the elasticity of the profit recovery of construction machinery enterprises in the future. The concrete machinery industry has experienced five years of adjustment since the peak in 2012, and digesting the stock of equipment, recovering cash, and repairing the balance sheet have become the top priorities. According to estimates, the backlog of equipment in the peak period of 2011-2012 will be gradually digested in 2017-2018.

Based on the typical case analysis, if the new equipment entered the market in 2011 at the high point of the early stage, the expected discount payback period is about 3.7 years based on the pumping price and capacity utilization rate in 2011 (the balanced capacity utilization rate of the whole society is 72%). However, the real situation is that due to the oversupply of industry capacity, pumping prices and pumping volumes have declined to varying degrees since 2013, and correspondingly, the payback period has been extended from the expected 3.7 years to 5.7 years, so the equipment that entered the market at a high level around 2011-2012 will be gradually digested in 2017-2018 under the operating rate level in recent years.

The recovery of concrete machinery is expected to improve the gross profit margin of equipment enterprises. Nowadays, the changes in the supply and demand pattern of the industry have gradually been reflected in the sales of new machines, and the increase is more obvious according to the current order scheduling and sales situation of the main engine factory. In terms of finance, the level of gross profit margin has been greatly improved. Taking Sany Heavy Industry as an example, from 2013 to 2016, the company's concrete gross profit margin was adjusted from 40% at the peak to 20-25%. Since the first quarter of 2017, the gross profit margin of concrete machinery has recovered to 28%, a significant increase from the previous quarter.

It is expected that in the next few years, the spring of the concrete machinery industry is coming, and a large number of market demand and macro improvement may make the industry usher in the long-awaited outbreak.