The hottest machinery, engineering machinery, Sany

[machinery] construction machinery: Sany has a market value of more than 100billion yuan, and the leader in the post industrialization era is expected to continue to reach a new high

the deep-seated reasons for the new high market value of Sany: China has gradually entered the post industrialization era, and the leading effect highlights the development trend of plastic packaging materials used in the food industry

1) China's economy has gradually entered the post industrialization period. From the level of per capita GDP and urbanization rate, China will reach the level of developed countries in the 1970s by 2020

2) post industrial era: economic growth rate fell. Entering the post industrial era, China's economic growth has stepped down, and it is expected to maintain medium and high speed operation for a long time in the future

3) post industrialization period: the industrial concentration in the stock economy has increased, and the profitability of the leading manufacturing industry has increased. Leading manufacturing enterprises have higher operating efficiency, lower operating costs, better brands and higher market share. Through the expansion of roe, the profitability and stability have been significantly improved, and the improvement of roe will bring better market performance of stocks. Construction machinery: the sales volume at the beginning of 2019 continued to exceed market expectations

1) the sales of construction machinery products in 2019 continued to exceed expectations. According to the data of China Construction Machinery Association, 30501 excavators were sold in 2019, with a year-on-year increase of 39.9%. Among them, 11756 units were sold in January (year-on-year +10.0%), and 18745 units were sold in February (year-on-year +68.7%)

2) according to the prediction model of Zhongtai excavator, we predict that the sales volume in 2019 is expected to reach more than 210000 units

3) the supply of core parts (hydraulic parts) is still tight in 2019

downstream: infrastructure underpinning economy and investment growth rebound, real estate 2019 is not pessimistic

1) at the beginning of 2019, infrastructure investment growth hit the bottom and rebounded. In 2019, the completed capital construction investment increased by 4.3% year-on-year, hitting the bottom and rebounding. The macro-economy is weakening, and the demand for infrastructure stability maintenance is expected to continue to rise. Rural Revitalization (infrastructure investment) pipe wall appearance is bright and smooth, extending the boom cycle of construction machinery

2) downstream real estate investment: 2018 exceeded expectations, and there is no need to be pessimistic in 2019. In 2018, the investment in national real estate development reached 1.108 trillion yuan, with an annual growth rate of 9.5%. In 2019, the growth rate of development investment further increased, with a year-on-year increase of 11.6%

the share and profitability of domestic leading enterprises have improved, cash flow has improved, and asset quality has improved

1) domestic leading market share continued to increase, and sany ranked first in the market share. In 2018, the top three domestic brands were Sany Heavy Industry 23.07%, XCMG 11.51% and Liugong 7.02%. In February 2019, the market share of Sany further increased to 27%

2) benefiting from the decline of upstream costs, the gross profit margin of host manufacturers' products is expected to rise further, and the impact of asset impairment losses will gradually reduce. The operating cash flow of domestic host manufacturers continued to increase steadily in 2018 after a significant improvement in 2017

investment suggestions: we are firmly optimistic about the performance of the leading equipment manufacturing industry in the post industrialization period, and about the leading domestic OEMs and parts. We recommend Sany Heavy Industry, XCMG machinery, Liugong, Hengli hydraulic, and Eddie precision. Sany Heavy Industry, XCMG group and Liugong catapult have played an important role, ranking among the top 3 domestic excavator brands respectively. Hengli hydraulic and Eddie precision provide excavators with hydraulic cylinders and pump valves, crushing hammers and hydraulic pump valve motors, which have good growth potential

risk tips: infrastructure and real estate investment is lower than expected risk, macro policy regulation risk, intensifying industry competition, raw material price fluctuation risk

Author: Yunzhang finance/trader snowball