Newsletter summary
The SW mechanical equipment index is up 2% this week.Candycrushsagagamefreedownload.5%CandycrushsagagamefreedownloadThe demand for general machinery has improved significantly.CandycrushsagagamefreedownloadForklift, injection molding machine track leading companies benefited. The bidding volume of EMU has greatly increased, and the demand for railway equipment has recovered. Build the bottom of the domestic demand of construction machinery, go to sea to help the main engine factory to improve the profit margin. It is suggested to pay attention to Anhui Heli, CITIC heavy Industry, CRRC and so on. Risks include macroeconomic changes, raw material price fluctuations and policy changes.
Text of news flash
[the SW Machinery and equipment Index is up 2% this week.Candycrushsagagamefreedownload.5%, the domestic demand of construction machinery will build the bottom and go to sea to help the main engine factory to improve its profit margin]
Last week (2024-05-06-2024-05-10), the SW machinery and equipment index rose 2.5 per cent, ranking 15th in Shenwan's 31 first-tier industry categories, while the CSI 300 index rose 1.72 per cent over the same period. From the perspective of 2024 to date, the SW machinery and equipment index fell 2.12 per cent, but ranked 18th among the 31 first-tier industry categories of Shenwan, while the CSI 300 index rose 6.85 per cent.
Demand for GM machinery showed clear signs of recovery in April, especially on tracks such as forklifts and injection molding machines. On the one hand, PMI rebounded to 50.4 in April, two consecutive months in the expansion range, reflecting the continued recovery of the manufacturing sector; on the other hand, the inventory cycle between China and the United States is currently low, and the increase in demand for replenishment is expected to further boost demand for general machinery. From the perspective of micro data, the Q & An information of the Izumi investor interactive platform shows that the order of the injection molding machine of the enterprise has continued to improve since April. In the field of general capital goods such as forklift, injection molding machine and bending machine, the leading companies rely on the advantages of scale and cost, and the market share is increasing and the prospect is promising in the recovery of downstream demand.
The demand for railway equipment is also showing a sustained recovery. From January to April 2024, national railway fixed asset investment increased by 10.5% compared with the same period last year, and the growth of investment accelerated, according to the State Railway Administration and China Railway official website. At the same time, railway passenger volume increased by 28.5% over the same period last year. With the acceleration of railway investment and the continuous growth of passenger volume, the bidding scale of EMU of China Railway Group has also warmed up. The number of EMU bidding for the first time in 2024 has reached 165, exceeding the total number of bids for the whole year of 2023. In addition, the demand for five-level repair of EMU is about to enter an explosive period, which will further drive the rapid growth of the rail transit equipment maintenance market. Investors are advised to pay attention to the leading forklift companies with global competitiveness, Anhui Heli and Hangzhou fork Group, as well as CRRC in the field of rail vehicles.
After a long downward cycle, the domestic demand market of construction machinery has shown signs of bottoming. According to the forecast of CME, the sales of domestic excavators will reach 9500 units in April 2023, which is basically the same as the same period last year. With the implementation of the "trade-in" policy, the renewal cycle of construction machinery is expected to start ahead of schedule. In addition, the promotion of the sea strategy is expected to improve the profit margin of the mainframe factory. In 2023, the share of overseas income of Sany, Xugong Machinery, Zoomlion and Liugong has all increased, and the overseas gross profit margin is generally higher than that at home, thus promoting the long-term improvement of profit margins. Construction machinery manufacturers' attention to asset quality also helps to reduce the risk of bad debts in accounts receivable.
Overall, the bottom signal of the construction machinery market has been clear, and the continued recovery in demand for railway equipment and general machinery indicates that the industry as a whole will usher in investment opportunities. Therefore, investors can pay attention to Anhui Heli, CITIC heavy Industry, CRRC, Sany heavy Industry and Hengli hydraulic and other enterprises. However, it is also important to pay attention to potential risks such as macroeconomic changes, fluctuations in raw material prices and policy changes.