High growth of construction machinery?

Recently, the two giants of construction machinery, Sany Heavy Industry (600031.SH) and Zoomlion (000157.SZ/01157.HK) have announced their quarterly reports one after another. The growth of Gemini has exceeded market expectations again. However, many market participants told reporters that the industry’s continuous and unexpected growth has started to show signs of slowing down, and the downstream market demand has slowed down.

A researcher who had just visited Hebei Construction Machinery dealers told reporters that from the results of this survey, this year construction machinery has entered the off-season for sales. In previous years, the high growth of general construction machinery sales could last until May, and the loader sales in April this year have already shown signs of fatigue. Among them, Shanxi and Hebei are very poor. In April, the loader sales showed a negative growth.

The excavator sales data released in April 2011 showed that the sales of the excavator industry reached 27,000 units, a year-on-year increase of 25.3%, which was 18.7 percentage points slower than the growth rate in March (44.0%); The cumulative sales of the excavator industry reached 102,000 units, a year-on-year increase of 48.8%, which was a slowdown of 11.1 percentage points from the cumulative growth rate of 1-3 months (59.8%).

An Jie Insurance Machinery Researcher Xu Jiechao said in an interview with reporters that in the past two years, the construction machinery industry has used the credit sales model to artificially boost downstream demand, resulting in a demand bubble. As this part of the market is approaching saturation, the future growth rate is positive. It will slow down.

His credit sales refer to the very popular installment and financing leases in the construction machinery industry. Due to the high price of construction machinery products, the market price of a 10-ton excavator is between RMB 500,000 and RMB 800,000. Because many customers are individuals and unable to pay, the engineering machinery manufacturer and the bank have cooperated to launch a down payment of 20%-30%. Construction Machinery Mortgage Loan Model.

“In the actual sales process, due to the current intense competition in the construction machinery market, the market share among the manufacturers is almost the same. Therefore, in order to capture the market's various sales policies, the manufacturers pay 10% down payment and even zero down payment. Car.” An industry inside the construction machinery industry told reporters.

“We heard in April this year that there was a zero down payment for a major construction machinery manufacturer in the industry.”

"This aggressive sales model will result in a large number of accounts receivable risks. At the same time, the cash income from manufacturers is low, and the company's funds are tight. They need to borrow from banks or raise funds from the capital market. The financial costs are also high."

From the perspective of listed companies of construction machinery that have announced a quarterly report, cash flow is generally deteriorating, and accounts receivable increase at a larger rate: In addition to Anhui Heli, the operating cash flow of each company in the first quarter was significantly negative; at the same time, eight companies The balance of accounts receivable of the company increased by 81.3% compared with the average at the end of 2010, of which, Sany Heavy Industry, Liugong, and Xiagong have both increased by more than 130%.

Vice President Liu Xianyang of Liugong once said in an interview with the media that the rapid growth of construction machinery in 2010 benefited from the low base in 2009 and the 4 trillion investment investment, but as China's monetary policy changes, the industry growth rate is facing decline risk.

A researcher at an asset management company in Shanghai believes that construction machinery is highly dependent on investment in fixed assets. As China has changed its growth model that used to rely on investment, the rapid growth of the construction machinery industry will no longer be expected.

In fact, the China Construction Machinery Industry Association has reduced the growth rate during the "12th Five-Year Plan" period. According to the association’s forecast, sales of construction machinery will increase by approximately 17% annually from 2010 to 2015, while the construction machinery industry will achieve an average annual growth of 33% in the past five years.

The market is not without coincidence that the reporter discovered from the newly released quarterly report of Sany Heavy Industry that the national social security 108 combination ranked fourth in the company’s top ten circulating shareholders in 2010 had at least reduced more than 3 million shares of the 31 Heavy industry stocks.