Deutsche Bank Markets Research Asia Industry Date China 18 October 2013 Industrials Construction Manufacturing machinery Industry Update Phyllis Wang Research Analyst Continued healthy demand recovery (-) - -
[email protected] of wheel loader in Sept China’s wheel-loader sales volume in Sept 2013 up 17% yoy, in line Focus stocks According to 21-Sun, China’s wheel loader sales volume (including exports) Lonking (3339.HK),HKD1.68 Buy Price Target recorded 13,176 units in September, up 16.9% yoy. We think this was due HKD1.98 mainly to healthy demand recovery in the domestic market (+24% yoy). For the Zoomlion (1157.HK),HKD7.17 Hold Price Target first time this year, ytd sales volume growth has turned from negative to HKD6.01 positive, which was +0.1% yoy (vs. -1.4% in 8M13 and -30% in 2012). Total Source: Deutsche Bank sales volume in 3Q13 was up 14.5% yoy, largely in line with our half-year volume assumption (14% yoy rise in 2H13). Lonking’s market share stabilized in September mom The combined market share of the top five players (Lingong, Liugong, Lonking, Xiagong and XCMG) was stable at 74.5% in 9M13. (vs. 74.2% in 8M13 and 72.4% in 2012). Lonking sold 19,320 units (-8% yoy) in 9M13, with a market share of 14% (vs. 14.2% in 8M13 and 14.8% in 2012). We note that Lonking and Linggong are losing market share to XCMG and Xiagong in 3Q13. We think this is mainly because Lonking continues its prudent sales strategy. However, Lonking’s sales volume of wheel loaders rose 24% yoy in September to 1,569 units with a stabilized market share of 11.9%, vs.