The hottest machinery industry maintains prosperit

2022-08-23
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Machinery industry: the industry maintains prosperity and benefits from technological progress

this week, we conducted intensive research on construction machinery, sewing equipment dealers, and listed oil and gas equipment companies. Although the economic growth has slowed down, equipment orders in infrastructure, oil and gas and other fields remain booming, especially the competitive advantage of leading companies is more obvious. The key companies we recommend are expected to grow by% this year

January is the off-season, but the operating rate, sales and orders of key companies tracked remain prosperous. Although the first quarter should be seen together, it is objective, but the key point is that it is far beyond the market expectations. Our research on the resumption of the Spring Festival series also summarizes that each sub industry of machinery has a subdivided growth logic line, such as industrialization, urbanization, global manufacturing transfer, labor substitution, technological revolution, technological upgrading, accelerated environmental protection and so on. These trends are also medium and long-term. The market is not simply driven by performance. There have been many deviations between fundamentals and expectations in history, and finally the stock price has returned to value, as well as in January 2019, Similar to 2010. At present, the boom continues and is far better 1 Under the market expectation, we believe that the market will continue

our rating increase is not due to the accelerated growth of the industry, but based on our understanding of the industry and market. Although the growth rate of the industry may slow down in 2019, after a year of decline, the A-share valuation has included this expectation. At the same time, China is strengthening reform and opening up and tax reduction, China and the United States are actively meeting, and the SME rescue policy. These reform measures help to underpin the market. We still have fresh memories of many pessimistic views and panics about China in the first half of 2018, but we believe that with the introduction of reform measures in, the profits of industrial enterprises remained stable, the RMB exchange rate stopped falling and rebounded, the machinery industry continued to boom, and the competitiveness of leading companies increased after financial deleveraging. These changes will help the market improve its valuation

the recovery of the machinery industry is not only related to the economic cycle, but also related to technological revolution and technological progress. For example, oil and gas equipment, high-speed railway equipment, intelligent equipment and lithium battery equipment have all gone out of the counter economic cycle in the past decade due to the benefit of technological revolution or technological progress, and the industry cycle usually has years, several waves of market, there is an industry growth logic, and they benefit from technological progress. Therefore, the machinery industry cannot be simply classified as a cycle industry

for example, the demand or substitution trend for equipment due to the ongoing technological upgrading has been irresistible: the import substitution of hydraulic parts in the medium and large excavation of Hengli hydraulic has exceeded expectations, the market share of Sany Heavy Industry has increased, the equipment cycle brought about by the improvement of China's Shale Gas Technology, industrial robots, aerial work platforms, etc. are still in the growth period under the trend of labor substitution, and lithium battery equipment is still affected by the uncertainty of the new energy vehicle policy, However, it still benefits from the rapid technological progress and integration of the battery industry

how to evaluate the valuation of the machinery industry? Valuation is an art, and there is no standard answer. Is the machinery industry 10 times reasonable or 50 times reasonable? PE in the machinery industry has experienced great fluctuations in history, which is not very difficult for researchers to track performance, but it is difficult to judge valuation fluctuations, especially in the cyclical industry. When the market is pessimistic, it is also consistent with the Chinese side that it will continue to uphold the concept of "truth, reality, affinity and honesty" and the correct concept of righteousness and interests. We believe that the industry is in different stages of development, and the valuation, especially the regular maintenance of the radiator (condenser) of the freezer of the compressor, is different. At the same time, the market is in different policies and liquidity environments, and the valuation differences are also great. In the first quarter of 2019, the industry fundamentals are much better than the market expectation (decline), so the probability of upward is greater. In addition, the leading enterprises we recommend have the internal logic of competitiveness improvement, industry change, (2) resistance spot welding technology progress. No matter how the market expectation changes, it will eventually return to value, and the market is also accumulated

comprehensively raise the industry rating, and focus on recommending competitive leading companies. We expect that under the assumption of improved liquidity, the industry as a whole will have a process of valuation improvement in the first half of 2019. We strongly recommend: Hengli hydraulic, Sany Heavy Industry, Zhejiang Dingli, Jack Co., Ltd., Jerry Co., Ltd., Japan machine seal, golden card intelligence, CRRC, Yinghe technology. See the company's series of reports for details

risk tip: Sino US trade negotiations have brought uncertainties in some industries; The price of raw materials rises; Industry competition intensifies

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