Overall, China's construction machinery industry is still big but not strong, the slowdown in industry growth, low excess capacity. Since 2011, construction machinery has entered a period of adjustment over three years, Sany, Zoomlion revenues, Liugong, Xugong total number of listed companies dropped to about 50% of the peak period, the net profit fell about 20% peak.
According to China's construction machinery market depth analysis of data shows that from 2014 to the third quarter data, the construction machinery industry operating performance is not satisfactory. Reporters noted that the number of enterprises in the third quarter fell sharply over the same period a profit or a loss, apparently, a few years ago in the aftermath of a massive expansion of the industry is still not fully digested.
Industry generally poor management
Reporters noted that the loss of Sunward third quarter alone, 2.63 million yuan, after deducting non-recurring gains and losses net profit as high as 46.62 million yuan, more than the amount of loss in 2012 and 2013 the total net profit.
In addition, Hill pushed shares and Xiamen Engineering shares have also experienced large losses; and Sany, Zoomlion, XCMG and other industry leaders, although net profit is positive, but compared to last year are there has been a substantial decline.
Data show that three quarters of 2014, nine major construction machinery sales fell 0.49 percent, China Construction Machinery Industry Association, key enterprises in the 7.43% decline in operating income. The excavator, for example, according to the China Industrial Information Network show that in September 2014 the National excavator production was 6126 units, an increase of -19.63% from January to September 2014, the National excavator production was 92,192 units, an increase -8.26%.
By convention, the annual Spring Festival is construction machinery after the season, but in 2014 the market is just the opposite. The first half of 2014, Zoomlion net profit fell 69 percent, followed by Sany, net profit fell 48%. Industry experience is not busy season, off-season more light unfavorable situation.
Enormous pressure on business inventories
Faced with poor operating results, the construction machinery industry listed companies agreed that, mainly due to a slowdown in real estate and infrastructure investment, construction machinery market, weak demand, underemployment. Meanwhile, the construction machinery industry market holdings too, also inhibits the production capacity of the industry's sales.
From now, the construction machinery industry is also being a big adjustment, shuffle may accelerate. According to industry sources, the current domestic loaders population reached 1.7 million units, excavators reserve amounted to 1.4 million units. Since a few years ago stimulus, enterprises have large-scale expansion of production capacity, which led to a huge market holdings.
Massive stimulus plan can not go far in recent years by the national macro-control effects, real estate slowdown in new projects. In this context, an important supporting areas as real estate, construction machinery industry is facing the problem of lack of capacity utilization.
According to these reports, the current global loaders, excavators, demand was more than 30 million units per year and 35 million units, but only Chinese companies loaders and excavators on yield are more than 500,000 units, the construction machinery industry supply and demand is still outstanding.
Donghai Securities research report pointed out that in October 2014 the national production of 83,400 excavator units, down 9.33%; 1 to October cumulative production of 108,400 units, down 8.8%. Sales, October sales 4975 units, down 33.2%; total sales 10 months ago excavator 79800 units, down 16.7%.
This point of view, the excavator in October exacerbated oversupply, the cumulative 10 months before the formation of stock 28,500 units. In addition, in October concrete machinery output fell 4.5% from January to October cumulative production increased slightly by 0.8% compared with the same period in 2013; the crane 10 per month fell by 2.2%, the cumulative growth rate fell to 9.7 percent; machine tool production fell 1.4%.
Concrete Machinery Construction Machinery was the most profitable product, but now looks bad. GF Securities research report pointed to Zoomlion, for example, after three years of adjustment, concrete machinery more than 60% share of profits from its peak, down to less than 40% at present.
Industry seeking to upgrade
"At present, China's construction machinery enterprises large and small, more than one thousand, the future of many businesses to close down. At present, the construction machinery industry is still in an adjustment period, each of which are in the stage of inner strength. Who can first out of the woods, who competitive ability, will live to the end. "A brokerage analyst said so.
Overall, China's construction machinery industry is big but not strong. China Construction Machinery Industry Association, Qi Jun pointed out: in 2014, by the "three overlay" effect and other multiple factors, the construction machinery industry in a temporary "growing pains", still faces great challenges.
The analyst further pointed out that the traditional Chinese construction machinery industry, the transformation and upgrading of the industry is imminent. This includes multiple dimensions, changing from low to high; resolve surplus, eliminate backward; improve industrial concentration and the intensity level and the like. At present, Sany, Zoomlion and other leading companies have already opened up the way out, the companies selected mode mutual differences.
As a veteran of construction machinery enterprises, Zoomlion experienced the golden age of lying can make money in recent years, also experienced the "roller coaster" as falling stimulation, two consecutive years of decline in performance makes companies eager to find new growth points. In June 2013, Zoomlion announced by the shareholders, the company intends to focus on developing a diversified strategic transformation from construction machinery business to the development of construction machinery, sanitation machinery, agricultural machinery, heavy trucks and five financial services sector, the goal is to present Construction Machinery accounted for 80% of the company's total revenue dropped to about 50 percent next. August 2014, Zoomlion on an important step out of transition, together domestic PE firm Hony Capital, to total 2.784 billion yuan acquisition of Anhui Agricultural machinery manufacturer Chery Heavy Industry 80% stake.
Faced with industry in transition, Sany is hoping to use the extension of industrial chain, and enhance the company's ability to resist risks. In 2013, with continued Sany announced its entry into the precast concrete industry (PC) oil field equipment and, more broad market prospect new areas.
November 2014, the Group moves frequently in the process information in the field, connecting with SAP, IBM signed a strategic cooperation, and hope to build a lead in the global construction equipment industry, process information system to support the Trinity Group in new business environment Upgrade Transition.
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