Finance Association, Feb. 20 (Reporter Huang Lu) Total monthly sales ended a trend of continuous decline last year, and total excavator sales achieved positive growth in January this year. After the Spring Festival holiday, many machinery companies also spread good news and got off to a good start in sales. Does this mean that the downward cycle of the construction machinery industry is over, and the inflection point has quietly arrived?

A number of construction machinery industry insiders told the Financial Federation reporter that the year-on-year growth rate of excavator sales data for January this year was due to the Spring Festival holiday factor in the same period last year (the base figure was lower). Sales of various types of machinery and equipment since this year have met expectations, but have not exceeded expectations. Currently, it is still difficult to determine whether the inflection point of the cycle has reached. Early March will enter the traditional peak sales season. The overall domestic sales situation in Q1 is likely to be better than the previous year, but the sales situation for the whole year remains to be seen; after experiencing high growth in the previous two years, sales growth may slow down in overseas markets.

After the holiday, the China Construction Machinery Industry Association released the latest statistics on major excavator manufacturers. In January of this year, 12,376 excavators of various types were sold, up 18.5% year on year, with 5,421 units in China, up 57.7% year on year; exports were 6,955 units, down 0.73% year on year.

(Data source: China Construction Machinery Industry Association)

Comparing historical data, excavator sales stopped falling and stabilized in January this year. This is the first time since December 2022 that total sales in a single month have achieved a positive year-on-year increase. An industry insider from a leading OEMs told CFC reporters that domestic excavator sales rose 50% year on year in January. On the one hand, the Spring Festival was earlier last year, and the year-on-year base was lower; on the other hand, to prepare for the start season of major projects after the Spring Festival, OEMs will launch aggressive promotions, and dealers will also step up their stocking efforts ahead of time before the Spring Festival to welcome the peak season after the holiday season.

People from the securities departments of companies including Sany Heavy Industries and Zoomlion Heavy Industries believe that changes in sales data in a single month do not reflect changes in industry trends; it is also necessary to observe the sales situation in the next few months. As to whether there will be an inflection point in the industry cycle this year, people involved in listed machinery companies have all been cautious and have not given a clear prediction, but they are still quite confident about the recovery in domestic sales in Q1. “Since January and February, the domestic sales situation of the company's products has been good. The goal for the first quarter of this year is to be better than last year.” A person from the Liugong Securities Department told the Financial Federation reporter.

“The company's products still have a lot of room for growth in overseas markets this year. The first phase of the Zhonglian Smart Industrial City Project Crane Park will be completed and put into operation in 2024, which will further strengthen the company's manufacturing advantages and cost advantages in the field of cranes.” A person from the securities department of Zhonglian Heavy Industries said. According to information, on February 18, Zhonglian Heavy Industries began shipping various series of products with a total value of over 1.2 billion yuan to parks such as Zhonglian Smart Industrial City. Previously, Zhonglian Heavy Industries Engineering Crane Company, Construction Crane Company, Concrete Machinery Company, and Earthmoving Machinery Company received more than 5.4 billion yuan in overseas orders during events such as annual meetings and product tastings.

The CCTV Financial Excavator Index shows that investment plans in many parts of the country have been intensively unveiled, and construction of major projects has set off a boom. The overall operating rate of construction machinery in the country in January was 47.81%, higher than the operating rate in January 2023 (40.61%). A Financial Services News reporter combed through and found that after the Spring Festival this year, major construction machinery manufacturers, including Sany, Zhonglian, Xugong, and Shandong Lingong, have resumed work and resumed production one after another, and have already begun delivering the first batch of orders for the Lunar New Year Dragon.