Machinery and equipment industry operating indicators overall callbacks holding rating

The overall operating indicators of the steel plate are pulled back, and the bottom is near, waiting for a rebound. Since the end of October of 2011, the machinery and equipment industry has accumulated an excess of -12.02% of the Shanghai Composite Index, which is the second-largest mid-cycle sector in which major industries have fallen. Our overall view of the machinery industry in the latter part of the period is that most sub-sectors have experienced a slowdown in operating income growth, a decline in gross profit margin, high receivables and high financial costs, and this will continue until deflation ends. During this period, the entire machinery industry was mainly staged by rebounding. Only the demand for some downstream industries was strong and the individual prosperity was too bad, which made the special sub-industry and companies of the State Council have the opportunity to basically face up.

Before the "18th National Congress" was held, the demand for stability will support investment in specific areas such as railways, water conservancy, and energy, and will boost the rebound of related industries. From the end of 2011 to 2012, we will focus on the railway equipment industry, construction machinery industry, oil drilling equipment industry, chemical equipment industry, refrigeration equipment industry and environmental monitoring instrument industry. The construction machinery industry is one of the fastest-growing sub-sectors in the mechanical industry in terms of economic recovery. Once the regulation is relaxed, individual stocks in the construction machinery industry will be the first to rise. We also look forward to the 2012 railway construction recovery and water conservancy construction. It will become one of the driving forces for pulling the demand for construction machinery.

The high price of bulk raw materials is hard to fall, which has led to an increase in demand for oil drilling equipment, and the growth of oil drilling equipment industry performance has been confirmed. Although the revenue growth rate of the railway equipment industry in the 3rd quarter of 2011 decreased significantly, the sub-sector has already received the attention of the State Council and supported it in terms of funds. In 2012, it is expected that there will be a substantial turnaround in the business sector.