7 March 2017 Asia Pacific/China Equity Research Construction & Farm Machinery China Construction Machinery Sector Research Analysts SECTOR REVIEW Amy Ji 852 2101 7735
[email protected] Strength in excavator/crane continues with Edmond Huang, CFA 852 2101 6701 concrete machinery catching up
[email protected] Figure 1: Excavator sales tripled in Feb; concrete machinery catching up 50,000 350.0% 2000 25% 45,000 300.0% 1800 20% 40,000 250.0% 1600 15% 35,000 1400 200.0% 10% 30,000 1200 150.0% 5% 25,000 1000 100.0% 0% 20,000 800 50.0% -5% 15,000 600 0.0% 10,000 400 -10% 5,000 -50.0% 200 -15% 0 -100.0% 0 -20% Jan-09 Dec-09 Nov-10 Oct-11 Sep-12 Aug-13 Jul-14 Jun-15 May-16 Jan-15 Apr-15 Jul-15 Oct-15 Jan-16 Apr-16 Jul-16 Oct-16 Jan-17 Excavator sales volume YoY (RHS) Operating hours (trailing 12 months) YoY(RHS) Source: Company data, Credit Suisse estimates ■ Strong February excavator sales with sufficient new orders. Official excavator sales volumes tripled in February, led by small/large-sized excavators (+317%/+345% YoY), beating market expectations. January- February volumes grew 189% YoY. Sany’s market share further expanded to 25% from 22% last month. We estimate that major machinery makers have already secured sufficient orders to fulfil their production in March- April. For truck cranes, the production pipeline has already reached May. ■ Concrete machinery is catching up. We turn more positive on concrete machinery, and expect their sales to register 15-20% growth in 2017 on a low base, vs our previous estimate of high single-digit growth.