Construction machinery companies have put forward new year plans

At the beginning of 2024, the construction machinery industry handed over its overall report card for 2023. Since the fourth quarter of 2023, the industry has been in a downward cycle, and the operating rate at the end of the year was relatively sluggish due to seasonal factors. The world's leading overseas brands are dominated by European, American and Japanese manufacturers, and sales growth has slowed down. The domestic market is also facing challenges such as bottom-line fluctuations in new machine sales, high-level increases in social stock, and more intense corporate competition. Domestic sales have declined significantly year-on-year.

According to recent data from the China Construction Machinery Industry Association, excavator sales have experienced negative year-on-year growth for 12 consecutive months. In November 2023, a total of 14,900 excavators of various types were sold, a year-on-year decrease of 37%, of which 7,484 excavators were sold domestically, a year-on-year decrease of 48%.

According to customs statistics, my country's construction machinery import and export trade volume from January to November 2023 was US$46.928 billion, a year-on-year increase of 9.53%. Among them, the cumulative imports were US$2.307 billion, a year-on-year decrease of 8.44%; the cumulative exports were US$44.622 billion, a year-on-year increase of 10.6%. It is expected that China's construction machinery import and export volume will reach approximately US$50 billion in 2023, with exports maintaining a slight year-on-year growth. However, since the second half of the year, the growth rate of export trade has shown a cliff-like decline. The year-on-year growth rate from July to October was negative. The year-on-year growth rate of export trade volume in November was only 1.1%, indicating that growth has been weak.

Overall, the revenue and net profit of some industry leaders increased in the first three quarters, and the main operating indicators of companies such as Liugong, Zoomlion, Shantui, and Zhejiang Dingli achieved growth. Among them, Zoomlion achieved revenue of 35.514 billion yuan in the first three quarters, a year-on-year increase of 15.87%; net profit was 2.855 billion yuan, a year-on-year increase of 31.65%. Sany Heavy Industry achieved revenue of 55.522 billion yuan, a year-on-year decrease of 5.15%; net profit was 4.048 billion yuan, a year-on-year increase of 12.51%.

At the same time, the revenue and net profits of XCMG, Yutong Heavy Industry, China Railway Construction Heavy Industry and other companies have declined.

However, positive factors are also increasing in the construction machinery industry. With the further implementation of 1 trillion yuan of national debt and 2.7 trillion yuan of special bonds, it is expected to have a supporting effect in the future and stimulate the recovery of domestic demand for construction machinery.

Specifically, in the fourth quarter of 2023, the Standing Committee of the National People's Congress issued an additional 1 trillion yuan of treasury bonds through the issuance of additional treasury bonds and adjusted budget arrangements, focusing on eight major areas - post-disaster recovery and reconstruction, key flood control projects, and natural disaster emergency response capacity improvement projects. , other key flood control projects, irrigation area construction and renovation and key soil erosion control projects, actions to improve urban drainage and flood prevention capabilities, key natural disaster comprehensive prevention and control system construction projects, and high-standard farmland construction in Northeast China and disaster-stricken areas in the Beijing-Tianjin-Hebei region.

At present, the first batch of treasury bond budgets of 237.9 billion yuan and the second batch of project lists have been released. The first two batches of projects involve arrangements for the issuance of additional treasury bonds worth more than 800 billion yuan, and most of the 1 trillion yuan in additional issuance of treasury bonds have been implemented into specific projects. The "landing" of national debt will boost the construction machinery industry, which is expected to be reflected in the increase in project operation rates and operating hours in early 2024.

In addition, relevant departments have also paid more attention to the development of the construction machinery industry in terms of policies. On December 28, 2023, the "2023 China Manufacturing Power Development Index Report" and the "Green Paper on Technological Innovation in Key Areas of China's Manufacturing Industry - Technology Roadmap (2023)" were released in Beijing. As one of the 16 key areas of China's manufacturing industry, construction machinery has released a technology roadmap for the first time. The inclusion of construction machinery in the "Green Book" for the first time is a high recognition of the development of the industry. It also puts forward the opportunities and challenges faced by the future development of the industry and points out the development direction.

Leading companies have also put forward New Year plans for 2024. Su Zimeng, president of the China Construction Machinery Industry Association, said that looking forward to 2024, the favorable conditions facing my country's development are stronger than the unfavorable factors. The basic trend of economic recovery and long-term improvement has not changed. The construction machinery industry will make great achievements. Everyone must enhance confidence and Confidence.

At the same time, leading companies have also proposed new strategic plans for the company in 2024. LiuGong takes the "Three Completes" strategy as its development direction in 2024. LiuGong Chairman Zeng Guangan pointed out in his New Year's message that 2023 is an important moment for LiuGong's 65th anniversary and its 30th anniversary of listing. LiuGong officially released its new culture and new brand concept, and continues to promote the "Twelve Changes" with the "Three Completes" strategy as the core. LiuGong will focus on achieving the strategic goals of the "14th Five-Year Plan" and take the "Three Completes" strategy as the direction. Liugong's revenue in the first three quarters reached 21.114 billion yuan, a year-on-year increase of 5%; net profit attributable to the parent company was 826 million yuan, a year-on-year increase of 41%. The improvement in the company's profitability is mainly due to factors such as internal reforms to reduce costs, the sale of its Polish subsidiary, and seizing the opportunity to optimize and adjust the product structure during the National III and National IV transitions.

tdexcavator Machinery recently stated in a roadshow that it expects the turning point of this industry cycle to be around mid-2024, and that it is expected to re-enter the upward cycle in 2025. Leading companies are expected to be the first to stabilize by virtue of their scale advantages, industrial layout advantages, reform dividends and modernization of governance.

Sany Heavy Industry is relatively optimistic about the market conditions in 2024 and has expectations. The company will focus on the opportunities brought by machine replacement; relevant experts believe that market segments such as aerial work equipment and electric loaders are picking up; globalization is imperative, and Europe, the United States, Japan, South Korea, the Middle East, Markets such as Africa and Latin America are placed at the same position as the domestic market. Cai Shenglin, Secretary of the Board of Directors of Sany Heavy Industry, said: "According to past experience, the replacement wave should begin in 2023. However, due to insufficient operating hours of domestic construction machinery, the replacement wave in the domestic market is expected to be delayed, and the equipment update upward cycle is expected to be It will be launched from 2024 to the first half of 2025, and the company has made relevant technical preparations."

Finally, Shantui Group held the 2024 Partner Conference in Jining, Shandong Province in conjunction with partners such as Weichai Power, China National Heavy Duty Truck, Linde Hydraulics, Shantui Construction Machinery, and Shantui Finance under Shandong Heavy Industry Group. The newly upgraded "golden core" products and a series of products with obvious differentiated advantages such as intelligent assistance, new generation of new energy, and mining integration were exhibited.