Lithium electrification has led to a marked increase in the competitiveness of Chinese companies overseas, and it is expected that the increase in the share of OEMs in Europe and the US will continue.
The Zhitong Finance App learned that CICC released a research report saying that lithium electrification has led to a marked increase in the competitiveness of Chinese companies overseas, and it is expected that the increase in the share of OEMs in Europe and the US will continue. According to observations, domestic demand for forklifts in the first quarter of 2024 was mainly driven by Class 3 trucks. Looking back, the overall sales trend of large domestic trucks changed. It is recommended to continue to pay attention to changes in domestic demand for forklifts. Meanwhile, since 2022, raw material price reductions, business structure optimization, etc. have promoted an increase in gross margin. Looking ahead, we must pay close attention to exchange rate trends. Optimistic about Anhui Heli (600761.SH) and Nuoli shares (603611.SH), and follow Hangcha Group (603298.SH).
Excavator sales increased 0.3% year over year in April. According to data from the Construction Machinery Industry Association, the excavator industry sold 18,822 units in April, up 0.3% year on year. The previous value was down 2.3% year on year. In January-April, a total of 68,786 excavators were sold, a year-on-year decrease of 9.8%. In April, the loader industry sold 9,779 units, up 0.9% year on year. The previous value decreased 5.8% year on year. In January-April, a total of 36,400 loaders of various types were sold, a year-on-year decrease of 6.6%.
Domestic sales have rebounded from the bottom, and overseas demand is weak. By region, domestic excavator sales in April were 10,782 units, up 13.3% year on year, and up 9.3% year on year. Previously, CME predicted that domestic excavator sales would remain flat in April, and the actual data exceeded CME's forecast; export sales were 8,040 units, down 13.2% year on year, and the previous month was a year-on-year decrease of 16.2%. From January to April, domestic sales were 37,228 units, down 2.9% year on year; export sales were 31,558 units, down 16.7% year on year. The growth rate of domestic sales has continued to expand since the year-on-year correction in March. CICC expects domestic demand sales to be mainly driven by small increases. It is recommended to focus on the continuation. Exports declined, and the decline narrowed. By region, US demand slowed in early 2024.
CICC expects to sell 185,000 excavators in 2024, a year-on-year decrease of 5%. In 2023, the industry sold a total of 195,000 excavators, down 25.4% year on year; it sold 90,000 units in China, down 40.8% year on year, and sold 105,000 units overseas, down 4.0% year on year. Domestic sales are expected to be around 85,000 units in 2024, corresponding to a slight drop in sales in 2023. Export sales are expected to drop by about 5% year on year to 100,000 units in 2024, and comprehensive sales volume is about 185 thousand units in 2024, a decrease of about 5% year on year. Looking back, it is expected that along with real estate policy adjustments, domestic sales of excavators will stabilize from 2024, while the main export-side market may enter a downward cycle from 2023. Optimistic about Sany Heavy Industries (600031.SH) and Hengli Hydraulic (601100.SH) in the medium to long term, and focus on Xugong Machinery (000425.SZ) and Eddy Precision (603638.SH).
Risks: Overseas demand is declining, real estate demand is weak, and the competitive landscape is deteriorating.