The demand situation for commodity concrete mixing plants is still improving，conclusion of the research on commodity concrete stations

The demand situation for commodity concrete mixing plants is still improving, and the overall rebound of construction machinery is evident

1、 Conclusion of the research on commodity concrete stations: The company has reported that the demand situation is still improving, with large-scale infrastructure projects maintaining high levels and even showing signs of acceleration; In addition, investment in the real estate industry is steadily recovering. Therefore, the mixed use station is considering doubling its production capacity.

(1) The commercial mixing station is located in the Hanyang area of Wuhan, with a high brand recognition in Wuhan. The shipment volume of commercial concrete products is among the top five in Wuhan. The current monthly shipment volume is 30000 cubic meters, calculated at a unit price of 300 yuan/cubic meter, with an annual revenue of 120 million yuan. Based on the current profit of 40-50 yuan per cubic meter, the annual profit is over 15 million yuan, and the initial investment cost can be recovered in two years.

(2) The demand situation is constantly improving. The company's shipment volume has significantly increased compared to last year, with a magnitude of over 30%. Now, the capacity utilization rate is close to the full production level, mainly driven by infrastructure and real estate projects., Wuhan's urban infrastructure investment reached 55.173 billion yuan, an increase of 48.6%. Projects such as Wuhan Xingang, rail transit, Tianxingzhou dual-use railway bridge, Erqi Yangtze River Bridge, Wuhan Railway Station, Hankou Station, and highway network are rapidly advancing.


(3) The rebound in demand has led to a moderate increase in supply. Wuhan's mixed use stations are relatively scattered with low concentration. Against the backdrop of demand recovery, the number of mixed use stations in Wuhan has increased to a certain extent, currently reaching a scale of 70-80. However, from the perspective of competitive landscape, it is still relatively stable. Due to the high entry threshold of commodity concrete, the ability to meet demand and ensure product quality are crucial to construction progress and building quality, which cannot rely on post inspection. Therefore, brands are a significant barrier to new entrants, and overall industry competition is still relatively orderly.

(4) The prospect of commodity concrete equipment is promising. The sales volume of commercial concrete products is basically linearly related to their equipment inventory. The annual sales volume of 1 million cubic meters corresponds to the inventory of 5 mixers, 10 boom pump trucks, and 60 cement mixing and transportation trucks, respectively. Therefore, against the backdrop of a significant increase in fixed assets, the rising demand for commodity concrete has driven a rebound in demand for commodity pumping machinery. In addition, cement mixer trucks and boom pump trucks are also consumables. According to the current annual usage rate of 90%, the service life of the mixer is about 4 years, and there is a high demand for renovation and upgrading.

The overall rise of the construction machinery sector is definitely related to the recent emphasis on "stable growth", but the key question is whether the strength of related stocks is sustainable?

Fundamental pressure is not small

If we look at recent data and industry research, the momentum for a significant rebound in the construction machinery sector at this stage is not sufficient.

Firstly, there is no sign of industry data warming up.

Secondly, the profitability and profit quality of listed companies are not optimistic. In terms of profitability, all listed companies in the construction machinery industry achieved a net profit attributable to their parent company shareholders of 6.352 billion yuan in the first quarter of this year, compared to 7.222 billion yuan in the first quarter of last year. The year-on-year decline in net profit in the first quarter of this year was as high as 12.05%. In terms of profit quality, according to statistics from Huatai United Securities, the proportion of accounts receivable to operating revenue of listed construction machinery companies increased to 1.33 times in the first quarter of this year, setting a new historical high.

Thirdly, overall, the number of newly started projects in local areas is very limited, and existing projects are also significantly constrained by funding. Dealers generally express pessimism about future demand. Monita predicts that sales in May may decrease by 40% to 50% compared to April, and may decline by about 40% year-on-year.



In addition, the expectation of a warming trend in the construction machinery industry is also significantly increasing.