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Construction machinery demand rebounds—focus on complete machine manufacturers
Release date:
2018-06-26
Source:
On June 22, cyclical sectors continued to show strong activity, with the construction machinery sector experiencing a long-awaited rally. Stocks like Dagon Road Machinery and Sany Heavy Industry led the gains within the sector. Data reveals that from January to May 2018, a total of 105,935 units of various excavating machinery products were sold—up 60.2% year-on-year. In just the first five months, sales already reached 75.50% of the full-year volume recorded in 2017. Meanwhile, domestic market sales climbed to 98,727 units, representing a robust 57.7% increase compared to the same period last year. Export sales also surged by 103.9%, reaching 7,172 units. Industry insiders predict that excavator sales growth for the entire year 2018 could approach 30%.
On June 22, cyclical stocks continued to remain active, among which Construction machinery The sector saw a long-awaited rally, with gains within the sector Da Gang Road roller, Sany Heavy industries saw particularly significant gains.
Data Shows that from January to May 2018, a total of Sales Various types Excavator 105,935 units of machinery products were sold, representing a year-on-year increase of 60.2%. In the first five months, sales already reached 75.50% of the total for all of 2017. Domestic market sales amounted to 98,727 units, up 57.7% compared to the same period last year, while export sales hit 7,172 units, surging 103.9% year-on-year. Industry insiders predict that excavator sales growth for the full year 2018 is expected to climb to around 30%.
Analysts note that monthly excavator sales continue to reach new highs, highlighting a "scissors gap" between the construction machinery industry and the broader economy. Over the next three years, driven by steady replacement demand, rising penetration rates in construction machinery, and an increasing share of exports, the industry structure is expected to improve further. Meanwhile, leading companies are poised for stronger financial recovery, positioning them well to outperform market cycles.
Looking further, in May 2018, the leading domestic enterprise Sany Heavy Industry 、 XCMG Machinery 、 Liugong Excavator sales growth rates for these companies all outpaced the industry average by 71.3%, while leading enterprises saw their market share increase, further optimizing the overall market structure.
Leading construction machinery companies are expected to maintain rapid growth in net profits over the next three years. First, as labor becomes increasingly replaced by automation, the number of construction machines driven by per-unit investment continues to rise, further boosting the penetration rate of these machines in the market. Second, existing equipment is entering a 5-to-6-year upgrade cycle—driven by both environmental regulations and machine aging—which ensures sustained demand for replacement and renewal. Third, exports continue to expand, particularly with leading companies seeing their export share significantly higher than the industry average. Finally, these industry leaders are benefiting from improved financial reporting and an optimized competitive landscape, giving them substantial earnings flexibility.
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