Industry information

Outlook for the machinery industry 2018: subdivision of choice

2017/11/23

In 2018 the overall outlook: we think overall the profitability of the machinery industry in 2018 is expected to continue to ascend, and capacity utilization will open up stage, further contribution to the improvement of asset turnover to improve corporate profits. The industry's overall debt levels and capital expenditure will remain low and solvency further improved. However, there is a big difference in the business sentiment of the various sub-sectors of machinery. We believe that the construction machinery will maintain a high degree of air in 2018, and the railway equipment will have an upward trend in 2018, and the demand for coal machinery has bottomed out.

Engineering machinery: the sales volume of engineering machinery has increased substantially since 2017, and the fundamentals have improved significantly. We believe that the current replacement demand has become the main source of demand, engineering machinery and industries in the stock of equipment to replace the peak in 2018-2020, although the downstream investment growth is slowing, but the high sales of construction machinery is expected to continue, 2018 excavator sales or will last more than 130000 units.

Coal: coal industry demand is still weak at present, we think as capacity under construction on the acceleration, the existing production capacity of mining mechanization, coal demand side big probability will slightly improve, the boom of industry is expected to be bottoming out. At the same time, with the further completion of marketization capacity in 2016-2017, the leading enterprises with high market share will benefit significantly from the stabilization and recovery of the industry demand.

Rail delivery equipment: in terms of high-speed rail, according to the plan of the medium and long term railway network, China's high-speed railway mileage will increase by 36 percent by 2020, which will create a new demand for the stability of high-speed rail equipment. In the short term, the total number of iron tenders has started to recover since November 2017, and the probability of bidding in 2018 will increase significantly. In terms of the city rail, 2018 is still the peak investment period, and we think the industry is expected to stay high.