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Seasonal rebound in mechanical sales, industry valuation, safety margin gradually emerging

Release time：

2024-04-12

keyword：

Construction machinery,large market

The construction machinery sector performed weaker than the overall market in September.Construction machinery fell by-9.51%in September,while the Shanghai Composite Index fell by-3.01%and the Shanghai and Shenzhen 300 Index fell by-3.54%during the same period.The performance of the construction machinery sector continues to be weaker than the overall market.

Fixed assets investment has stabilized,and the recovery of growth rate still needs to wait.From January to August,the cumulative investment in fixed assets was 18.06 trillion yuan,up 25.0%year on year,and the cumulative completed amount of new fixed assets investment was 7.4 trillion yuan,up 35.0%year on year,which is not much different from the previous period.Real estate investment in major downstream industries is relatively stable,while the growth rate of railway investment has significantly declined.Due to the continued high CPI,it is expected that there is little possibility of policy relaxation in the short term,and railway investment will only restart after the investigation of high-speed rail accidents is completed.On the whole,the recovery of growth rate of fixed assets investment still needs to wait.

The sales of the construction machinery industry have rebounded seasonally on a month on month basis.In August,entering the peak season of construction machinery sales,the year-on-year decline in sales of excavators,cranes,and bulldozers has narrowed,while the year-on-year growth in sales of loaders has expanded;Each sub industry has shown varying degrees of growth compared to the previous month;The export market has rebounded.September is the traditional peak sales season for the second half of the year,and it is expected that the sales of construction machinery will rebound month on month in the next 1-2 months.However,due to the high base starting from September last year,the year-on-year trend may continue to decline.

The safety margin of industry valuation is gradually emerging.At present,the overall static PE of the construction machinery sector is 12.64X,and the overall PB is 2.56X.The valuation level is close to the level of the 2008 financial crisis.The urbanization process in our country is still advancing,and with the continuous improvement of product quality,there is still room for improvement in import substitution and exports.Investors will gradually become accustomed to the industry's return to stable growth from high-speed growth in previous years.After significant adjustments in the early stages,the industry's valuation will gradually reflect pessimistic expectations.After the stock price continues to adjust,construction machinery will have a certain safety margin.

Investment suggestion:Due to the traditional peak sales season in the second half of the year,the sales of construction machinery have rebounded month on month.After adjustment,the safety margin of industry valuation is gradually increasing.Temporarily maintain the industry's"neutral"investment rating.