The Zhitong Finance App learned that recently, according to statistics from the China Construction Machinery Industry Association on major excavator manufacturers, 12,376 excavators of various types were sold in January 2024, an increase of 18.5% over the previous year. This means that total monthly sales of excavators ended the continuous decline in the previous year. Total excavator sales achieved positive growth in January this year, achieving a good start in sales. Guolian Securities said that downstream demand in the construction machinery industry is expected to pick up further, and it is optimistic about leading companies that will accelerate the layout of overseas markets. Every year, March-May is the traditional peak sales season for the construction machinery industry. Under the steady growth policy, demand is expected to pick up further in 2024. Related concept stocks: Sany International (00631), Zoomlion Heavy Industries (01157), China Longgong (03339).

Looking at the domestic market, in January of this year, 5,421 excavators were sold domestically, an increase of 57.7% over the previous year. Ge Xin, deputy director of the Langer Steel Research Center, said that since the beginning of 2024, all parts of the country have actively planned layouts, made efforts to boost the economy, and stepped up efforts to promote project commencement and construction progress, and the “steel demand” for domestic construction machinery showed a positive trend in the off-season.

According to the latest data from the “CCTV Financial Excavator Index”, the overall operating rate of construction machinery in January was 47.81%, higher than the operating rate in January last year (40.61%), laying the foundation for a “good start” for the economy in 2024. Among them, Jiangxi, Anhui, Zhejiang, and Hainan all had operating rates of over 70%, ranking among the top four in the country. Furthermore, the popularity of snow and ice tourism in Heilongjiang is also driving the commencement of construction of related engineering equipment. In January, crawler crane operations in Heilongjiang increased by 356.9% year-on-year, ranking first in the country.

However, many construction machinery industry insiders also said that the year-on-year growth rate of excavator sales data for January this year was due to the Spring Festival holiday factor in the same period last year. Sales of various types of machinery and equipment since this year have met expectations, but have not exceeded expectations, and it is still difficult to determine whether this is an inflection point in the cycle. The beginning of March will enter the traditional peak sales season. The overall domestic sales situation in the first quarter is likely to be better than the previous year, but the sales situation for the whole year remains to be seen; after experiencing high growth in the previous two years, sales growth may flatten out in overseas markets.

Looking at overseas markets, in January of this year, China exported 6,955 units, a year-on-year decrease of 0.73%. On a month-on-month basis, compared with December last year, the January export volume decreased by 2118 units, a drop of more than 20%. Despite this, China is speeding up the pace of “going global”, and exports are still the main focus of construction machinery's leading layout.

According to Pacific Securities, in the first half of 2023, Sany Heavy Industries' overseas revenue was 22.5 billion yuan, up 36% year on year, accounting for 57% of revenue; XCMG's overseas revenue was 20.9 billion yuan, up 33% year on year, accounting for 41% of revenue; Zoomlion Heavy Industries overseas revenue was 8.4 billion yuan, up 115% year on year, accounting for 35% of revenue. In the long run, domestic construction machinery OEMs are expected to achieve greater breakthroughs in overseas markets. Looking ahead to 2024, domestic demand in the construction machinery industry is expected to bottom out, and overseas markets have strong growth potential.

According to Guojin Securities, the global construction machinery market has a high ceiling, exports from domestic construction machinery OEMs have increased rapidly in recent years, and there is plenty of room for long-term growth. From January to November 2023, the value of China's construction machinery exports increased 17.3% year on year. The exports of leading manufacturers have been growing at a high level for 3 consecutive years, but at present, the global market share of domestic manufacturers is still at a low level, and the overseas market of construction machinery OEMs still has a lot of room for long-term growth.

It is worth mentioning that from January 2024, the sales volume of electric excavators was officially included in the statistics. In January 2024, 12 electric excavators (1 below the 6-ton class and 11 units in the 18.5-28.5-ton class) were sold. Industry insiders said that following the rapid development of electric loaders, the electric excavator market has begun to gain prominence. Electric technology has already been initially applied in the excavator field, and its future development potential has been recognized by the market.

In recent years, the electrification process of global construction machinery has accelerated. Driven by environmental protection policies, the electrification of excavators has gradually become a mainstream trend in industry development. Electric excavators have not only become an important publicity point for enterprises, but also a new breakthrough for enterprises to compete for the market.

Related concept stocks:

Sany International (00631): The company is one of the few domestic enterprises that can provide complete sets of “excavation, mining and transportation” coal machine equipment. On October 31, 2023, Sany International announced the results for the first three quarters of 2023. The group achieved revenue of 15.837 billion yuan (RMB, same below), an increase of 36.5% over the previous year; gross profit of 4.308 billion yuan, an increase of 59.5%; and net profit to mother of 1,772 billion yuan, an increase of 36.7% over the previous year. The announcement stated that during this period, the Group achieved a significant increase in revenue and profit compared to the same period last year.

Zoomlion Heavy Industries (01157): The company announced that it is expected to obtain net profit attributable to shareholders of listed companies of 3.38 billion yuan to 3.62 billion yuan for the year ended December 31, 2023, an increase of 46.57%-56.98%; net profit after deducting non-recurring profit and loss will be 2.27 billion yuan to 2.42 billion yuan, an increase of 75.59%-87.2% over the previous year.

China Dragon Gong (03339): The company announced that compared with the same period last year, the Group is expected to achieve a significant increase in net profit for the year ended December 31, 2023. The board of directors expects net profit for the reporting period to be between RMB 600 million and RMB 700 million, an increase of 50% to 75% over the same period last year.