Due to the lack of commencement of construction projects, demand has continued to slump, and the machinery industry has not had a good day since the second half of 2011. The recently announced general equipment manufacturing PMI index began to rebound. Analysts in the industry pointed out that the rebound of the important industry index indicates that the prosperity of the machinery industry has entered the inflection point. With the arrival of the peak season, the industry is expected to continue to pick up.

Demand improvement is the key

Data show that in September, the general equipment manufacturing PMI index reached 47.5, a rebound of 3.1 points. The production index was 50.7 points, and the growth rate was 6.4 points month-on-month. The activity of production activities increased. The new orders index was 42.3 points, a slight increase of 1.2 points month-on-month, and the finished goods inventory index was 50 points, an increase of 5.3 points month-on-month. In addition, the PMI index for special equipment manufacturing industry increased by 5.2 points to 43.9, which was already below 50 for seven consecutive months. The production index was 47.2, which was a 7.9-point increase from the previous quarter.

CITIC Construction believes that the number of newly started projects in the entire society in August has seen a substantial and positive growth, and new real estate starts showing the same trend. The August credit data reflected a slight increase in the proportion of medium and long-term loans to the public. These leading indicators will surely reflect the demand for equipment. The PMI data in September showed that the general equipment boom picked up slightly. It is expected that the annual total PMI index and new order index for special equipment in October and November will likely return to above 50.

An industry analyst interviewed by reporters also stated that “although the PMI index is still below 50, we can clearly see signs of recovery. Now the industry is gradually coming out of the trough. With the steady growth, the National Development and Reform Commission has moved quickly. Accelerate and approve the adoption of a large number of projects, and the market's demand for the industry will increase significantly. Only with the continuous increase in demand can we really drive the machinery industry out of the “winter.” Despite a difficult period, but in the future, China’s urbanization, There is still much room for improvement in infrastructure construction and the machinery industry will benefit from it."

Multi-factor positive construction machinery

With the recovery of important indicators in the industry, the industry's expectations for the machinery industry are gradually changing. CSC Securities said that the steady growth in demand and elasticity of recovery have brought about two types of investment opportunities for the machinery industry. First, sub-sectors with stable growth in downstream demand, such as large energy equipment, energy-saving and environmental protection equipment, and consumer machinery. Second, investment opportunities brought about by fine-tuning of policies will benefit engineering machinery, railway equipment, and nuclear power. “Because of many factors such as policies and market demand, the sub-sectors of the machinery industry are still more differentiated.” Analysts of the above industry pointed out that “the weak trend of the machinery industry this year has basically reflected the pessimistic expectations of fundamentals, due to various sub-sectors. The status quo is different, so the duration of the bottom and the pick-up of fundamentals are also different. At present, the approval of the NDRC will accelerate the demand for construction machinery and equipment, and the construction machinery industry is expected to take the lead out of the trough. In the second half of the year, the construction machinery industry may experience an increase of around 15%. With the launch of the government's economic stimulus plans, the industry may have exceeded expectations." "It is expected that the third-quarter or fourth-quarter performance of the construction machinery industry will bottom out and the industry will be low. The valuation-driven weak rebound will continue.” Wang Shuwei, an analyst at Anxin Securities, said that real estate development and investment growth rate stabilized, the pace of railway infrastructure investment accelerated in the fourth quarter, the project started leading to equipment utilization has bottomed out, the industry's overdue rate is expected to improve and restrict the industry The risk of bad debts of receivables weakened, and short-term profits to the industry .

Xiangcai Securities also pointed out in the latest industry research report that the drastic release of domestic infrastructure construction approvals in September will benefit the overall development of the construction machinery industry in 2 to 3 years, which will help the construction machinery industry get out of its previous downturn and enter new markets. A steady expansion. As the construction machinery industry has a strong and consistent situation, the relaxation of this policy will benefit the industry leaders such as Sany Heavy Industry, Xugong Machinery and Zoomlion.