Machinery / Industrial Parts & Tools

According to the statistics of 26 excavator manufacturers by the China Construction Machinery Industry Association, a total of 200,296 excavators were sold in the first three quarters of this year, a year-on-year decrease of 28.3%. Among them, 119,990 units were domestic, a year-on-year decrease of 48.3%; 80,306 units were exported, a year-on-year increase of 70.5%. China's excavator exports have grown significantly this year, which can offset the cyclical decline in domestic sales to a certain extent. Exporting overseas is expected to become an important force for smoothing cyclical fluctuations in my country's construction machinery industry, Watson & Band Import and Export Data Observation Report.

XCMG, Sany Heavy Industry, Zoomlion, and Liugong, the four leading manufacturers of construction machinery mainframes, have not performed well in the first three quarters of this year, with both operating income and net profit declining. According to Watson & Band’s import and export data observation report, among them, Sany Heavy Industry and Zoomlion’s net profit in the first three quarters both fell by more than 60%.

At present, my country's construction machinery industry is in the downward cycle adjustment stage. The high point of the current cycle of excavators appeared in April 2021, and then began to enter a negative growth stage, which has been declining for a year. As the policy continues to recover, the real estate industry is expected to gradually stabilize in the future, and the superimposed high base effect in the early stage will gradually weaken. It is expected that the decline in sales of construction machinery such as excavators and loaders will continue to narrow, and the operation of main engine manufacturers of construction machinery is expected to improve.

In the third quarter, the profits of many leading enterprises declined

Taking stock of the situation of listed companies in the third quarter, the profit margins of many leading companies have declined year-on-year. According to Huacheng Import and Export Data Observation Report, in August this year, after Xugong Machinery absorbed and merged with Xugong Co., Ltd. and realized the overall listing, the excavation machinery and concrete machinery of Xugong Co., Ltd. were integrated into the listed company Xugong Machinery. In the first three quarters of this year, Xugong Machinery achieved operating income and net profit attributable to the parent company of 75.054 billion yuan and 4.676 billion yuan respectively, surpassing Sany Heavy Industry and Zoomlion Heavy Industry. In the third quarter, XCMG achieved operating income of 21.205 billion yuan, a decrease of 4.96%; realized net profit attributable to shareholders of listed companies of 1.009 billion yuan, a year-on-year decrease of 26.21%.

At the same time, XCMG's overseas business revenue has been increasing year by year, with a rapid year-on-year momentum. In the first half of 2022, the company's overseas revenue was nearly 12.5 billion yuan, a year-on-year increase of nearly 160%. In the first half of 2021, this figure was less than 5 billion yuan.

In the first three quarters of 2022, Sany Heavy Industry achieved a total operating income of 59.165 billion yuan, a year-on-year decrease of 33%; realized a net profit of 3.597 billion yuan attributable to the parent company, a year-on-year decrease of 71.4%. As far as the current situation is concerned, due to the excessive decline in net profit in the first three quarters, it is almost a foregone conclusion that Sany Heavy Industry's net profit has declined for two consecutive years.

In addition, Zoomlion's net profit in the third quarter was 453 million yuan, a year-on-year decrease of 49.72%. Liugong’s revenue in the third quarter was about 20.034 billion yuan, a year-on-year decrease of 11.38%; the net profit attributable to shareholders of listed companies was about 586 million yuan, a year-on-year decrease of 42.45%. Sunward Intelligent's third-quarter performance announcement stated that the revenue in the first three quarters of 2022 will be about 5.408 billion yuan, construction machinery will account for 85.92%, and others will account for 14.08%. In the first three quarters, Shantui achieved a total operating income of 6.526 billion yuan, a year-on-year decrease of 10.1%; realized a net profit of 486 million yuan attributable to the parent company, a year-on-year increase of 241.5%. In the first three quarters, Xiagong Co., Ltd. achieved a total operating income of 786 million yuan, a year-on-year decrease of 33.2%, and the decline was larger than that of the same period last year; the net profit attributable to the parent was -64.88 million yuan, compared with -10.39 million yuan in the same period last year, and the loss rate increased.

It is noteworthy that the number of new contracts/bids signed by China Railway Construction Heavy Industry from January to September increased by 26.92% year-on-year. From the analysis of the disclosed data, it can be seen that the performance of China Railway Construction Heavy Industry from January to September 2022 will maintain a stable growth. hit a new record high.

Focus on overseas markets and China IV standards

Overseas markets and new energy markets have become the highlights of the construction machinery industry this year. Affected by the hot overseas orders in the first half of the year, the overseas sales of many construction machinery companies have achieved substantial growth, and some companies have even hit a record high. But even so, some overseas regions are still out of stock. According to data from the China Construction Machinery Industry Association, from January to June 2022, my country's construction machinery import and export trade volume was 21.391 billion US dollars, a year-on-year increase of 25.2%. The export value of each month was at the highest level in the history of the same month.

Recently, Xiang Wenbo, chairman of Sany Heavy Industry, said, "Sany Heavy Industry will expand the market through internationalization, build a world-class brand, and also hedge the impact of cyclical adjustments in the domestic market through internationalization." At the 2022 bauma exhibition in Germany At the event, Sany Group unveiled 21 new products including excavators, crawler cranes, and road rollers. The overall booth area exceeded 4,100 square meters, making it the largest exhibitor in China. On the opening day, there were a large number of overseas agents and customers who came to Sany’s exhibition area, including more than 100 European agents, which demonstrated the rapid progress of Sany’s internationalization. The financial report shows that in the first three quarters of 2022, Sany Heavy Industry's overseas market share continued to increase, and in the third quarter, its global market share broke through 8% for the first time.

In terms of National IV emissions, recently, Sany Heavy Machinery released a new generation of new National IV products, including nearly 40 products in the full range of excavators and loaders.

In response to the country's requirement for a full switchover of the "National IV" standard for non-road mobile machinery on December 1, XCMG's new "National IV" mining machinery products were also released in July, including three trump card series, covering the entire field of open-pit mine construction. Practical actions show the attitude and determination of construction machinery to embrace the "National IV".

In the first half of the year, Zoomlion has rolled off more than 60 new energy products, covering concrete pump trucks, concrete mixer trucks, truck cranes, aerial work platforms, excavators, mining trucks, forklifts, emergency vehicles, agricultural machinery, etc. New energy forms include pure electric power, hybrid power, and hydrogen fuel. A full range of new energy products has basically taken shape. Electric straight-arm series aerial work platform products have been sold in batches and are in a leading position in the industry.

The ceremony for the 2,000th Liugong electric loader to roll off the production line was officially held at the Liugong Headquarters Assembly North Line Factory. As the new batch of electric loaders slowly rolled off the production line, we have witnessed Liugong taking the lead in breaking through 2,000 units, creating a new milestone for electric loaders.

The field of agricultural machinery has become a new growth point

In recent years, opening up rural areas has become a new opportunity for machinery and equipment manufacturers. The scale of my country's high-end agricultural equipment market is about 400,000 units. Independent equipment brands have problems such as low added value. The transformation and upgrading of equipment will inevitably create larger market opportunities. With Xugong Group and Sany Heavy Industry announcing their entry into the agricultural machinery market in succession last year, major construction machinery giants in China have entered in different ways. On October 16, XCMG tractors, crawler harvesters, and a new generation of corn harvesters were sent to various places in batches, joining the front line of the national autumn harvest, helping the motherland to have a bumper harvest, Watson & Band Import and Export Data Observation Report.

As early as 2013, when Sany Heavy Industry went to the China Agricultural Machinery Industry Association for research, the association suggested that Sany Heavy Industry rely on technical strength and funds to develop and manufacture high-end agricultural machinery products. In 2015, Sany Heavy Industry officially launched the high-end agricultural machinery industry, and launched a hydraulic reversible plow for Xinjiang field cotton operations. This product can greatly save tractor fuel consumption, reduce costs, and improve operating efficiency.

Zoomlion has been in the field of agricultural machinery for a long time. At present, Zoomlion has become the first AI agricultural equipment manufacturing enterprise in China, and also the agricultural machinery equipment manufacturing enterprise with the most complete product chain in the country.

Intelligentization is the main development direction of Zoomlion's agricultural machinery and equipment. In 2021, Zoomlion will successively release a new generation of AI wheat harvesters and rice harvesters, release high-horsepower tractors and orderly rice seedling throwers for the first time, independently develop and release agricultural machinery controllers, intelligent terminals for harvesting and yield measurement, and other products. In the future, in the financial statements of Zoomlion, the proportion of sales of agricultural machinery equipment is expected to further increase, Huacheng Import and Export Data Observation Report.