Hong Kong Wande News Agency reported that under the support of favorable policies, the construction machinery sector continued to break out.

According to Wind, domestic excavator sales in July were 19110, up 54.80 per cent from the same period last year, and the growth rate exceeded 50 per cent for four consecutive months. Data released earlier showed that heavy truck sales in July were 144000, up 90 per cent from a year earlier, and a year-on-year growth rate of more than 50 per cent for four consecutive months.

Sales of excavators approached 200000 units this year.

Excavator sales are on the rise.

According to Wind, domestic excavator sales in July were 19110, up 54.80 per cent from the same period last year, and the growth rate exceeded 50 per cent for four consecutive months.

In total, the cumulative sales of excavators in China reached 189500 in the first seven months of this year, an increase of 26.73 percent over the same period last year. Its sales volume has exceeded that of 2011 and is approaching the scale of 2018. According to the current growth rate, the sales of excavators will reach a new high in 2020, and the annual sales are expected to exceed 30,000 units for the first time in history.

According to the previous analysis of Huaan Securities Li Jiang Research newspaper, the higher-than-expected sales in the first half of this year is due to the new demand brought about by the increase in engineering volume, and the renewal demand has not yet been released. Looking forward to the future, it is believed that the renewal demand is still the lubricant for the industry to maintain stable sales.

The main results are as follows: (1) due to the different service life, the off-peak renewal of domestic and foreign brands ensures the steady and continuous demand for renewal.

(2) compared with developed countries, the emission standard of non-road machinery in China lags behind by about 10 years, and it is a general trend to be stricter in the future. The operating rate and downstream investment data confirm each other that the construction machinery industry is still in a high prosperity position.

The Shanghai Securities Ni Ruichao Research newspaper earlier judged that the sales forecast of excavators for the whole year of 2020 was raised to 271300 units, an increase of 15.1% over the same period last year. Q3 is expected to maintain double-digit growth. From the point of view of product structure, the proportion of medium and large digging is improved, but from the annual point of view, the increase of small digging is a trend.

Founder Securities Zhang Xiaoguo reported that the new demand for excavators resonates with the renewal demand, maintaining a high economy throughout the year.

On the one hand, under the background of increasing downward pressure on the economy, infrastructure investment is expected to become the main force in stimulating investment and stabilizing economic growth, and the expansion trend is obvious under the catalysis of special debt and deficit ratio policies; in addition, real estate investment is still resilient throughout the year, the degree of machine replacement is also deepening, and multiple factors guarantee new demand. On the other hand, the industry is still in the peak period of renewal, the superimposed environmental protection policy is stricter to accelerate the release of renewal demand, and the renewal demand has strong certainty.

The report said that against the background of new demand resonating with updated demand, the excavator industry is expected to sell 294022 units in 2020, a year-on-year growth rate of 25 per cent.

Heavy truck sales return to an all-time high

Similar to the continued high growth rate of excavator sales, heavy truck sales also maintain a high growth trend.

According to data released by the first Commercial vehicle Network, China's heavy truck sales in July were about 144000, an increase of 90% over the same period last year and the fourth consecutive month of growth of more than 50%. From January to July this year, total domestic heavy truck sales increased by 30.9% to 958000 vehicles compared with the same period last year.

It also means that after a downturn in the first quarter, heavy truck sales are returning to all-time highs.

According to the analysis of Deng Xue and Wenkang Research newspaper of Tianfeng Securities, the main reasons for the high prosperity of the heavy truck industry are:

(1) the demand for social logistics continues to grow.

(2) the blue sky defense war continues to be carried out, and there is a strong demand for the replacement of national triple cards.

(3) with the countercyclical adjustment of capital construction, the demand for engineering heavy trucks has rebounded obviously.

According to the analysis of the report, for the whole year, the sales of heavy trucks are likely to exceed 1.3 million.

The investment growth rate is about to return.

The market judges that the growth rate of domestic fixed asset investment will continue to pick up strongly.

According to the forecast data of the Wind comprehensive agency, the cumulative growth rate of fixed asset investment from January to July is expected to reach-1.5%. According to the current growth rate, the cumulative growth rate of fixed asset investment is just around the corner.

Minsheng Securities Jieyunliang team research and analysis, in July infrastructure investment is expected to usher in positive, real estate investment is supported by new construction, manufacturing investment differentiation is large, it is expected that the overall investment is still slightly negative growth.

With the continuous development of infrastructure, the construction machinery plate, including excavators and heavy trucks, is expected to continue to benefit.

Western Securities Yamei Research and Analysis, from January to July 2020, special bonds issued a total of 2.25 trillion yuan, excluding shed reform, land storage, an increase of 187.5% year on year, will continue to fully support the start of infrastructure construction in various regions in the second half of the year; in addition, the year-on-year growth of commercial land transactions in various regions in the first half of the year and the gradual stabilization of commercial real estate inventories after a continuous decline will also indicate a boost in new real estate construction demand in the second half of the year. The improvement of infrastructure and real estate construction will further support the growth of construction machinery sales in the second half of the year.

It is worth noting that according to the previous research and analysis of Xinda Securities Luo Zheng, Liu Zhuo and Liu Chongwu, from the actual process of China's infrastructure investment, it is considered that the source of funds used by local governments for infrastructure investment can be used as a leading indicator of excavator sales. The original source of funds used by local governments for infrastructure investment was mainly land transfer fees, and local government bonds have been increased in recent years. By comparing the cumulative growth rate of land transfer fees and the cumulative growth rate of excavator sales, it is found that they have a high degree of fit in the large cycle; under the background of seeing the monthly growth rate of land transfer fees pick up and the expectation of local bond issuance to continue to rise, I think that we will be optimistic about the construction machinery for the next period of time.