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【券商聚焦】招银国际预计中国工程机械制造商的全球扩张将在2025年继续

[Brokerage Focus] CMB International expects that the global expansion of China's construction machinery manufacturers will continue in 2025.

Jinwu Finance News ·  Dec 10, 2024 00:28

Jingwu Finance | China Merchants International released the 2025 outlook for the equipment manufacturing sector in China. The bank expects the global expansion of china's construction machinery manufacturers to continue in 2025, with emerging markets such as the Middle East, Africa, and Latin America offering explosive growth potential for various types of machinery. In China, the bank expects that the update cycle combined with increased government policy stimulus will help stabilize machinery demand, although the bank's industry model has not incorporated aggressive assumptions. From a sub-market perspective, the bank expects excavators to achieve double growth in both China and export markets by 2025, while the growth of other machinery overseas will outperform that in China.

The bank's preferred stock is zoomlion (01157/000157 CH, buy), mainly due to the company's deep push into emerging markets with its full range of products. At the same time, based on zoomlion's good past performance in corporate actions, the bank believes that the share buyback (listed in hong kong) starting in December is a good indicator. Since excavator revenue accounts for a high proportion (approximately 50% of segment profit), the bank has upgraded sany heavy industry's (600031 CH) rating to 'buy.' The bank remains bullish on zhejiang dingli machinery (603338 CH, buy) for its strong execution in expanding the overseas aerial work platform market.

The bank indicated that the potential new tariffs from the usa have limited impact. The market has been concerned about the uncertainty of tariffs in the usa in 2025. However, the bank believes the actual impact on china's construction machinery manufacturers is limited, mainly due to (1) us income is not significant for most chinese companies; (2) some chinese companies have already developed response plans, such as directly expanding production in us factories to mitigate potential impacts.

Regarding excavators, the bank expects a year-on-year sales growth of 12% by 2025 (domestic sales + export). For exports, the bank anticipates a year-on-year sales increase of 15%. In China, as the industry enters a renewal cycle and the market for medium and large excavators recovers, the bank expects domestic excavator sales to grow by 10% year-on-year.

In terms of heavy trucks, the bank expects a year-on-year growth of 10% in 2025 (domestic sales + exports). Compared to the National III standard, the number of National IV heavy trucks is significantly larger (accounting for about 30% of the heavy truck fleet), so the bank believes that whether the equipment update policy can be widely extended to National IV heavy trucks will be key to boosting demand in 2025. The bank has already seen some provinces starting to provide subsidies for NESIV truck replacements in 2024, and expects more provinces to follow suit in 2025. The bank maintains a cautious outlook on the heavy truck export market, as Russia, being a major market for china's heavy trucks, may decline further under the influence of a high base and an increased import scrappage tax starting in October 2024. The bank believes the growth story of china's heavy truck brands in Russia has come to an end.

Disclaimer: This content is for informational and educational purposes only and does not constitute a recommendation or endorsement of any specific investment or investment strategy. Read more
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