Construction machinery industry: the year of profit elasticity, the restructuring of the competition pattern
Release time：
2018-04-11 11:12
Source：
Our judgment on the annual demand of the excavator industry: stable growth, cautiously optimistic
Maintain the growth rate of 10% to 20% for the annual sales volume of the excavator industry. The premise of this judgment is that the growth rate of infrastructure investment in 2018 is between 14% and 15%, and the growth rate of real estate investment is between 3.5% and 4.5%. This is consistent with the conclusions we have drawn from our grassroots research on dealers. The excavator industry is expected to show a steady growth trend throughout the year. From the perspective of the trend, it is expected that the growth rate in the first half of the year will be faster than that in the second half of the year.
2018 is expected to be the year of construction machinery profit elasticity
We believe that the revenue of construction machinery will grow steadily this year, the pressure on the cost side will ease, the gross profit margin will remain stable, and the asset burden will be basically cleaned up last year. Overall, we believe that this year is expected to be a big year for construction machinery profit elasticity.
The restructuring of the industry competition pattern brings structural investment opportunities, and Liugong is highly recommended
We expect that 2018 will be the year when the industry is reshuffled, and the market share of domestic manufacturers will further increase. In the new round of competition, the sales growth rate of individual outstanding manufacturers is expected to significantly outperform the industry. We continue to recommend Liugong, which has the most elastic performance and the lowest valuation in 2018 (2018 forecasted net profit of 800 million/yoy 150%, PE is 11.9 times), and the sharp drop is a good buying opportunity.
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