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东吴证券:12月挖掘机销量略超预期 重视当前工程机械低位布局机会

Soochow Securities: December excavator sales slightly exceeded expectations, focusing on current opportunities for low-level investments in Construction Machinery.

Zhitong Finance ·  Jan 13 13:57

Looking ahead to 2025, the domestic market is in an upward cyclical channel, and excavator sales are expected to maintain an increase of about 10%; looking at the export market, the impact of the 2025 regional elections will basically be eliminated, compounded by a moderate economic recovery in major regions, and the decline in excavator sales is expected to narrow markedly.

The Zhitong Finance App learned that Dongwu Securities released a research report stating that it sold 19,369 excavators of various types in December 2024, an increase of 16% over the previous year. Its domestic sales volume in China was 9312 units, +22.1% year over year; export volume was 1,057 units, +10.8% year over year. Domestic sales met previous CME expectations, and exports exceeded expectations. Looking ahead to 2025, the domestic market is in an upward cyclical channel, and excavator sales are expected to maintain an increase of about 10%; looking at the export market, the impact of the 2025 regional elections will basically be eliminated, compounded by a moderate economic recovery in major regions, and the decline in excavator sales is expected to narrow markedly. Based on the continued recovery in the construction machinery industry in 2025, it is predicted that the revenue growth rate of core OEMs in 2025 will be around 15%, and the profit growth rate will be around 20%. Corresponding to the low current valuation position, it is relatively cost-effective as a prudent asset allocation.

The main views of Dongwu Securities are as follows:

Domestic sales of excavators in December met expectations, and export sales exceeded expectations, and industry sentiment continued to pick up

In December 2024, 19,369 excavators of various types were sold, an increase of 16% over the previous year. Its domestic sales volume in China was 9312 units, +22.1% year over year; export volume was 1,057 units, +10.8% year over year. Domestic sales met previous CME expectations, and exports exceeded expectations. Looking at the domestic market, the growth rate continues to exceed expectations, mainly due to the high boom in water conservancy projects and mining, which is relatively good in response to demand for small and large excavations; exports mainly benefit from the completion of warehousing and a significant recovery in demand in some regions (typical of the Indonesian market). As of October 2024, the cumulative year-on-year growth rate of China's construction machinery exports to Indonesia has been corrected. Compared with the cumulative year-on-year decline of 19% in the first half of the year, demand in Indonesia has picked up markedly since Q3.

Looking ahead to 2025, the domestic market is in an upward cyclical channel, and excavator sales are expected to maintain an increase of about 10%; looking at the export market, the impact of the 2025 regional elections will basically be eliminated, compounded by a moderate economic recovery in major regions, and the decline in excavator sales is expected to narrow markedly.

Overseas markets: Europe and the US are recovering marginally, and the Middle East, Africa, and South America continue to be booming

(1) Europe: Benefiting from municipal engineering renewal and replacement, construction machinery is about to usher in a wave of large-scale replacement, and the world is expected to enter a relaxed cycle in 2025 to drive demand for more detailed replacement; (2) America: demand will be left behind by the general election in 2024 and is expected to be released in 2025; federal funds interest rates are still high, and interest rate cuts are expected to drive up interest rate sensitive infrastructure real estate investment; (3) Middle East: Investment in infrastructure and industry is high. Some countries have a trend of de-Americanization, actively introducing various types of Chinese engineers, and demand for construction machinery in China will rise significantly; (4) Africa and Latin America: Global entry The easing cycle has led to a rapid rise in infrastructure construction investment in developing countries and regions. At the same time, Africa and Latin America are all countries with good resource endowments. To achieve rapid development, mining and forestry are growing rapidly.

The profit growth rate of OEMs in 2025 is about 20%, focusing on current low-level construction machinery layout opportunities

Dongwu Securities believes that the profit sources of this construction machinery cycle have changed significantly compared with the previous cycle (2016 to 2021). Profit in the last round mainly relied on the scale effect brought about by sales expansion to flatten costs and obtain high profit margins. However, demand for core downstream infrastructure real estate continued to shrink in this cycle, and the scale effect was not obvious. The core focus of each company was on reducing costs and increasing efficiency, controlling risks, and increasing profit margins through cost control and structural improvements. Based on the continued recovery of industry sentiment in 2025, it is predicted that the revenue growth rate of core OEMs in 2025 will be around 15%, and the profit growth rate will be around 20%. Corresponding to the low current valuation position, it is relatively cost-effective as a prudent asset allocation.

Investment suggestions: Focus on recommending Sany Heavy Industries (600031.SH), a leading company in all categories, Zhonglian Heavy Industries (000157.SZ), Liugong (000528.SZ), Shantui Co., Ltd. (000680.SZ), and Hengli Hydraulic (601100.SH).

Risk warning: industry cycle fluctuations; international trade disputes; increased market competition.

The translation is provided by third-party software.


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