2013 construction machinery industry performance narrowed

The 2013 annual report of the listed company for the construction machinery sector has been released. Due to the macroeconomic downturn and industry cycle factors, the construction machinery industry has experienced a difficult year. What is worthy of recognition is that the construction machinery enterprises represented by the two giants have resisted the pressure of the industry's overall development momentum to slow down significantly. The decline in performance has narrowed quarter by quarter and the cash flow has stabilized. Under the pressure of excess capacity and fierce competition, “transition” has penetrated many companies in 2013, and overseas market expansion has become the biggest highlight of their “adversity for survival”.

Narrowing performance decline

After reviewing the annual report of 15 major construction machinery listed companies, the reporter found that the overall development momentum of this sector in 2013 has slowed down significantly, and the profitability of leading companies has been unsatisfactory.

According to the annual report, Zoomlion continued to defend its position as the industry leader. In 2013, it achieved a revenue of 38.54 billion yuan, a year-on-year decline of 19.8%, and a net profit of 3.84 billion yuan, a year-on-year decline of 47.6%. Sany Heavy Industry achieved a revenue of 37.33 billion yuan, a year-on-year drop of 20.3%; a net profit of 2.90 billion yuan, a decrease of 48.9% year-on-year. Xugong Machinery has become a “probe flower” with a revenue of 26.995 billion yuan and a net profit of 1.509 billion yuan.

In 2012, Zoomlion’s revenue exceeded 48 billion yuan, and Sany’s revenue was close to 47 billion yuan.

“According to the macroeconomic factors and the industry cycle, the construction machinery industry has gone through an arduous year.” An industry researcher who declined to be named said with emotion that “although the performance of several major listed companies was slightly lower than expected, but Under the development strategy of controlling business risks, it is not easy for these companies to achieve such results."

Haitong Securities analyst Long Hua pointed out that overall, due to the relaxation of China's economic and monetary policies in the third quarter of 2013, the decline in the revenue and net profit of the machinery industry rebounded in the fourth quarter. At the same time, however, the tightening of monetary policy and the rise in interest rates in the fourth quarter of last year caused the machinery industry’s revenue and net profits to decline in the first quarter of this year. However, since 2013, the decline in the performance of construction machinery companies has significantly narrowed.

In response, the reporter learned that after finishing the relevant quarterly reports, Zoomlion’s revenue has gradually recovered since the first quarter of 2013, and has recovered from the then 48.6% decline to 7.6 in the fourth quarter of 2013. %; Sany Heavy Industry jumped from the low of 36.5% in the second quarter of 2013 to 21.1% in the fourth quarter of the year.

Longhua also stated that from the perspective of changes in the overall asset status, the biggest challenge in the current asset quality of the machinery industry is not the high inventory, but the difficulty in recovering receivables due to weak demand and lack of funds. However, the operating cash flow of the machinery industry has stabilized at a low level as revenue, profit, and accounts receivable turnover have fallen year-on-year but the decline has narrowed, indicating that the cash flow of various companies has basically stabilized.

The "transition" dispute wins slightly

The contest between Sany Heavy Industry and Zoomlion has always been talked about, and under the pressure of overcapacity in the construction machinery market, "transition" has become their first choice.

Sany Heavy Industry's annual report shows that its "transition" is the main force for construction machinery and other construction machinery main business, and Zoomlion is to force the environmental industry, agricultural machinery and financial services and other related sectors. From the data of the annual report and the feedback from the capital market, Zoomlion's achievements in the field of force-environmental industries and other areas have become even more pronounced.

The research report released by China International Capital Corporation believes that the environmental industry is one of the most promising sections of Zoomlion and its revenue of 10 billion yuan is just around the corner. The related public information of Zoomlion also provided corroboration for the above viewpoint. Since the fourth quarter of 2013, Zoomlion’s orders for environmental products have been on an upward trend, and the merger of a subsidiary of environmental sanitation machinery is expected to contribute new profit growth points for the company.

After consulting the annual report, the reporter was informed that as of the end of 2013, Zoomlion held RMB 20.072 billion in monetary capital, Sany Heavy Industry had RMB 6.3 billion, and Xugong Machinery had RMB 6.6 billion. "First-rate cash reserves also make Zoomlion have a strong initiative in the face of market changes - while providing resistance to liquidity risks, it also provides a solid foundation for companies to achieve strategic transformation." The above-mentioned researcher said. "Although the company's main business income and net profit declined, the decline gradually narrowed, indicating that its own operations have begun to stabilize."

In addition, from the foregoing, it can be seen that Zoomlion, Sany Heavy Industry, and Xugong Machinery achieved a total profit of 8.25 billion yuan in 2013. Among them, Zoomlion ranked first in terms of 3.84 billion yuan for two consecutive years.

In terms of market share, the reporter found that Zoomlion's key product market share in 2013 continued to remain stable, and its domestic market share of concrete machinery, lifting machinery, and environmental sanitation machinery ranked first in the industry. Sany Heavy Industry's concrete machinery sales revenue exceeded 19 billion yuan, ranking first in the world; mining machinery sales revenue of more than 7.9 billion yuan, the domestic market share of 14%.

Overseas markets become bright spots

The rise of overseas markets is a major highlight of the construction machinery industry last year.

According to the “Twelfth Five-Year Plan”, by 2015, the sales scale of the construction machinery industry in China will reach 900 billion yuan. Under the background of the increasingly saturated domestic market, the expansion of overseas markets has not only greatly lifted the ceiling of corporate development, but also enhanced its ability to withstand the economic crisis in some areas.

In 2013, Zoomlion acquired CIFA, the world's third-ranked concrete machinery manufacturer, and M-TEC, the world's first brand in dry mortar equipment. Sany Heavy Industry completed the acquisition and shareholding in the remaining 10% stake in Putzmeister. Palfinger... According to the annual report, Zoomlion achieved an overseas sales income of about 2.787 billion yuan last year. Among them, the increase in the performance of some products of concrete machinery and crane machinery far exceeded the industry average and became a highlight of its overseas business. For concrete machinery, Zoomlion's pump trucks sold to the Japanese market formally participated in the construction of the reconstruction project in Fukushima; more than 100 concrete mixers successfully exported to Russia, and the single amount reached tens of millions of US dollars. For lifting machinery, its overseas sales of wheeled cranes increased by more than 480% year-on-year.

In 2013, Sany achieved sales revenue of 10.874 billion yuan, accounting for 29.92% of total sales revenue. Its export growth rate ranks first in the industry, its operations cover more than 110 countries and regions, and the quality of overseas operations continues to increase. , Asia-Pacific, South Africa, the Middle East, Brazil, North Africa, the United States, Latin America, Russia and other sales regions have maintained profitability, and achieved rapid growth.

"In the realistic pressure of China's economic restructuring and upgrading, the leading domestic construction machinery industry is actively seeking opportunities for mergers and acquisitions globally, re-adjusting the global industrial layout, and recovering for the future industry," said the researcher.