Machinery / Industrial Parts & Tools

As of August 31, the vast majority of listed companies in the construction machinery industry have released their 2021 semi-annual reports. We divide the companies into two parts: the complete machine and the accessories for analysis. The following are the main data of the semi-annual reports of listed companies in supporting parts.

In the first half of 2021, flowers and thorns coexist for accessory companies. Under the beautiful revenue and net profit data, the gross profit margin of the same period has been declining. Collected hundreds of billions, and there are companies...

Riding the industry Dongfeng Enterprise achieved outstanding results in the first half of the year

Benefiting from the broad market demand in the first half of the year, the accessory parts companies have achieved very impressive results in the first half of the year, and their revenue and net profit have increased to varying degrees. For example, Wei Diesel engines, such as Changchai's shares, which have tripled profit growth, and Yuchai's engines, which are still strong despite the general decline in gross profit...

However, in a good situation in the entire industry, it is inevitable for companies to benefit from growth. Only by outperforming the market and leading the industry average in revenue and profit can the company prove its own strength. According to previous statistics from the China Machinery Industry Federation, the added value of the machinery industry in the first half of the year increased by 22.3% year-on-year; the cumulative operating income of the machinery industry increased by 30.85% year-on-year, and the total realized profit increased by 41.99% year-on-year. In summary, it seems that only two companies, Hengli Hydraulics and Shanghai Diesel, have achieved revenue growth of more than 30.85% and profit growth of more than 41.99%.

The profit level is worrying, the gross profit margin of the industry generally declines

Compared with the bright revenue, the net profit margins of many companies are not very good, and most of the gross profit margin data are down year-on-year.

For industrial enterprises, the net profit rate is generally between 5%-20%. Relatively speaking, less than 3% is a low profit rate, and more than 10% is a higher profit rate. Hengli Hydraulics and Eddy Precision are well-known leading companies in the industry, and their net profit margins higher than 20% prove their strong profitability. However, the net profit margins of several engine companies are generally not high. The net profit margins of Changchai 8.62% and Weichai 5.09% are normal. The net profit margins of Yunnei Power 3.42% and Yuchai Power 2.66% reflect their profitability. The weakness of the company will not be conducive to the future development of the enterprise in the long run.

Gross profit margin is also an important indicator of the company's profitability. Except for Yuchai Power, the gross profit margins of several other companies have declined year-on-year. In this regard, some companies analyzed the increase in costs due to the increase in raw material prices in the first half of the year. However, when raw materials are rising, companies can adjust their expenditures by controlling management expenses, financial expenses and other items. The current results also show that most companies still have room for cost control.

The shortcomings do not conceal the outstanding achievements of the company in the first half of the year are full of highlights

The above introduced some hidden worries reflected in the financial reports of accessory companies, but the flaws are not concealed. The company's achievements in revenue, profit, research and development, and market share are highly appreciated.

Weichai Power:

In the first half of 2021, Weichai Power’s operating income was 126.388 billion yuan, and it sold 671,000 engines, a record high, leading the industry in sales.

Hengli Hydraulic:

In the first half of 2021, Hengli's hydraulic pump and valve segment revenue surpassed that of excavator cylinders for the first time, becoming the company's largest source of income. This also shows that Hengli Hydraulics continues to improve its technical level and its pump and valve products are more recognized by the market.

Eddie Precision:

At present, Eddie Precision's products have been exported to more than 60 countries and regions around the world. Compared with similar domestic products, it has product quality and performance advantages, and has a price advantage compared with foreign advanced products.

Changchai shares:

In the first half of 2021, Changchai's operating income was 1.497 billion, with a net profit margin of 8.62%, making it the company with the highest net profit margin among engine companies.

Yuchai shares:

In the first half of 2021, Yuchai’s operating income was 463 million and its gross profit margin increased by 0.27%, making it the only company with gross profit margin growth among listed companies in supporting parts.