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Recently, various construction machinery companies have announced their first-quarter annual reports or performance forecasts, and major securities investment companies have also attached great importance and analyzed and forwarded them. The sales of 121.59 billion in the quarter of eleven, the net profit growth of more than 300 percent of China United, and the net profit of 157 million of Hengli Hydraulics all reminded the industry and outsiders of the good development momentum of the construction machinery industry. However, at the annual meeting of the industry, the president of Sany gave Wen Bo’s remarks about the “window period” to the excited investors.

We regard this round of growth as a window period, and how many are the windows of escape. If you don’t walk away, your situation will be even more difficult.

So, what exactly is the current industry situation and what kind of mentality do we have to deal with correctly?

Sany Heavy Industry: First-quarter net profit of 1.5 billion over 70% of the entire year in 17 years

Sany released the first quarterly report of 2018. From January to March this year, the company’s operating income was 12.159 billion yuan, an increase of 29.7% year-on-year; net profit attributable to shareholders of listed companies was 1.5 billion yuan, an increase of 101.18% year-on-year, reaching 71.7% of the full-year level in 2017. The performance growth far exceeded market expectations. The year-on-year increase in profit growth of Sany caused the increase in revenue, as well as the steady increase in gross profit margin, the decrease in the expense ratio during the period, and the significant decline in exchange loss, and the performance elasticity brought about by the scale effect.

Shantui shares: net profit of 4204 million in the first quarter increased 150% over the same period of last year

On April 27th, Shantui announced the first quarterly report of 2018. The company achieved operating income of RMB 2.115 billion in January-March 2018, an increase of 30.83% year-on-year; the average operating income of the equipment industry grew by 15.20%; it was attributable to the shareholders of the listed company. The net profit was RMB 42.0471 million, an increase of 149.71% year-on-year, and the average net profit growth rate of the special equipment industry was 43.56%. The company’s earnings per share was RMB 0.03. The company said that during the reporting period, the market demand for construction machinery industry increased, the company seized market opportunities, through the development of markets, product production and sales increased year-on-year.

Shanhe Intelligence: 68.52% of net profit in the first quarter of last year

Shanhe Intelligence achieved operating income of 1.204 billion yuan in the first quarter of 2018, a year-on-year increase of 28.13%; net profit of 111 million yuan, an increase of 56.63%. In only one quarter, it achieved 68.52% of net profit last year. “Focused on equipment manufacturing, engineering equipment, special equipment, aviation equipment, three-line development” is the “one-and three-line” industrial development strategy of Shanhe Intelligent. In the context of the recovery of the entire industry, Sanhe Intelligent has made great progress in these three major areas. .

Anhui Heli: First-quarter operating revenue of 2.272 billion yuan

On April 25th, Anhui Heli announced the first quarterly report of 2018. The company achieved operating revenue of RMB 2.272 billion in January-March 2018, an increase of 19.85% year-on-year; the average operating income of the special equipment industry increased by 10.95%; it was attributable to the shareholders of listed companies. The net profit was 136 million yuan, a year-on-year increase of 31.18%, the average net profit growth of the special equipment industry was 45.03%, and the company’s earnings per share was 0.18 yuan.

Hebei Xuangong: The first quarter net profit of 33.52 million decreased 81% year-on-year

On April 25th, Hebei Xuangong (000923) released its first quarterly report for 2018. The company achieved operating income of RMB 1.145 billion in January-March 2018, a year-on-year decrease of 11.25%. The average operating income growth rate of the oil mining industry was 24.87%; The net profit of the shareholders of the listed company was 33,523,100 yuan, a year-on-year decrease of 80.67%. The average net profit growth rate of the oil mining industry was 190.70%. The company’s earnings per share was 0.05 yuan.

Zoomlion: First-quarter net profit increased 325.69% -372.99% year-on-year

Zoomlion expects that the net profit attributable to shareholders of listed companies in the first quarter of 2018 will increase 325.69%-37.99% year-on-year, and the net profit will be about 360-400 million yuan. The notice also mentioned that the operating income of the company’s construction machinery segment increased by approximately 80%, which continued to maintain a substantial growth year-on-year. On the one hand, Zoomlion continued to deepen structural reforms on the supply side. On the other hand, it actively embraced the new economy and allowed traditional equipment manufacturing to closely integrate new thinking and new technologies so that the company could achieve high-quality development of its main business.

XCMG: The first quarter net profit increased by 147%-167% year-on-year

Xugong Machinery expects to achieve a net profit of 500 million to 540 million yuan in the first quarter of 2018, a year-on-year increase of 147% to 167%. In the notice, Xugong also disclosed two major reasons for achieving growth in performance: The business climate continued to exceed expectations, the company’s leading products were in short supply, and historical burdens such as accounts receivable and inventory were accelerated, and the company’s net interest rate was expected to exceed expectations. However, as we all know, XCMG’s listed companies are Xugong Group’s Xugong Machinery. Many assets, including XCMG excavators, are not listed companies. Therefore, XCMG’s earnings income should be more substantial.

Liugong: First-quarter net profit increased 130%-180% year-on-year

On April 13, Liugong announced the performance forecast of 2018 for the first quarter. During the reporting period, it is estimated that net profit at home would be 2.5-300 million yuan, a year-on-year increase of 130% to 180%. Through the management innovation and marketing changes in recent years, Liugong has seized the market opportunities, and the sales of the loaders and excavators as well as other product lines such as bulldozers, road rollers, and flatroad machines are all significantly ahead of the industry average. , promoted the company’s operating income and profit growth.

Hengli Hydraulic: The first quarter net profit increased 283.65% year-on-year

In the first quarter of 2018, Hengli Hydraulics realized an income of RMB 970 million, a year-on-year increase of 74.38%, and a net profit of RMB 157 million, a year-on-year increase of 163.53% and a non-net profit of RMB 175 million, a year-on-year increase of 283.65%. Benefited from the triple benefit of “industry demand growth + market share increase of major customers + increase in customer supply chain”, Hengli Hydraulics has achieved excess growth. With the further consolidation of the status of the company’s pump valve products in the field of domestic construction machinery, the profitability of the latter stage will be further manifested.

Aidi Precision: First-quarter net profit increased by 67% year-on-year

In 2018, Eddie’s revenue for the first quarter was 217 million yuan, an increase of 56% year-on-year, and net profit attributable to mothers was 51.06 million yuan, a year-on-year increase of 67%. The first-quarter results exceeded expectations and the phase-verification of 18-year high growth was verified. Previously subject to capacity reasons, Eddy took the initiative to give up many orders. With the increase in production capacity, both the hydraulic hammer and hydraulic parts can maintain rapid growth in 18 years. Moreover, Eddy, as a leading supplier of domestically owned hydraulic equipment, continues to benefit from the increase in the ratio of construction machinery, and superimposes import substitution opportunities in the context of the shortage of downstream hydraulic pressure components. The company is experiencing a long period of high-speed growth, and its profitability is expected to increase with production capacity. The rhythm continues to increase.

From the perspective of revenue structure, Zoomlion’s performance is very eye-catching. When analyzing the financial statements of various companies, the revenue structure is one of the important data for prying into the future development of the company. Looking at the revenue constitution of major construction machinery companies, most of them rely on their own intrinsic products, while Zoomlion makes a new generation of construction machinery 4.0 products as the main sales products. It is believed that along with this series of products, Progressively, Zoomlion will make greater progress in product sales structure, gross profit margin, and profitability.

Judging from the general trend of policies, leading companies such as Hengli Hydraulics, Aidi Precision and other construction machinery parts will have bright prospects. On the one hand, the demand for high-end parts and components will continue to increase for the host machinery companies with continuous downstream maintenance. On the other hand, due to the recent Sino-U.S. trade warfare, leading machinery and components companies will fully enjoy the dividends of high-end parts import substitution.

Looking at quarterly reports or quarterly announcements announced by major construction machinery companies, we can see that the vast majority of companies have achieved far more than the industry’s expected growth. Even some companies’ profits in the first quarter have reached more than 50% of last year’s total profits. In the literature of major securities analysts, we are more than delighted to find that the industry’s gains will continue until at least 2019 due to factors such as infrastructure projects, equipment replacement, and exports. Although we cannot predict true and false, an optimistic attitude inside and outside the industry has caused some companies and individuals to ignore the hidden worries behind the situation.

Although construction machinery companies performed very well in the first quarter, a large part of them are due to the overall recovery of the industry. We must know that when the industry situation is good, going down the river does not mean the true strength of the company. When the industry screams, it is the true strength of the company. ZTE, the fourth-largest global sales volume in the past, could be forced into a dead end, and the red-hot “national car” Xialieng announced the suspension of production with consecutive sales of several months. The construction machinery enterprises should be warned, and the industry boom should be added. The R&D investment of large products, the optimization of asset quality, and the acceleration of the handling of inventory and accounts receivable, responding to the changing industry situation indifferently.