mixing plant enterprises need to reform and increase the production of high-end products

Insufficient construction of infrastructure projects has led to a decrease in sales of concrete machinery, and mixing plant enterprises need to reform and increase the production of high-end products
Insufficient project funding has led to a significant decrease in construction volume. The project commencement volume in the east Poor, the start of projects in the central and western regions is slightly better than in the eastern regions. According to market research conducted by sales personnel of a certain agent, about 50% of companies are still in a state of holiday shutdown. The concrete stations of commodity concrete merchants in Changzhou and Suzhou are still closed for vacation. They started working on the fifth day after the Spring Festival last year, but this year they have postponed resuming work until after the fifteenth day; Due to the large number of planned water conservancy projects and the relatively good funding situation (currently 50% of funds are in place), the demand for construction machinery in central Hubei Province has improved to some extent compared to the previous period, but still significantly decreased compared to the same period last year; The construction of projects in Sichuan is not as good as last year, but there are more planned projects.

The demand structure for excavators is relatively good for small and large excavations, and poor for medium excavations. The main reason is that the current projects are mainly focused on water conservancy, rural and urban renovation, and there is also a certain increase in large-scale mining projects. However, the construction of infrastructure projects such as real estate and railways directly related to the demand for medium excavation is insufficient, resulting in relatively weak demand for medium excavation. This may be a major feature of this year's sales structure.

Credit is tight, and the pressure to collect payments for equipment sales is increasing, resulting in a general rise in overdue rates. Due to the government's tightening of credit and macroeconomic regulation in April and May last year, downstream funding shortages often lagged behind by two months. By July and August, there was a shortage of terminal sales receipts, and the overdue rate of equipment sales gradually increased. Until the end of the year, the overdue rate was still relatively high, currently at a level of 20-25%, and agents were involved in providing advance funding for customers. In January 2012, industry sales dropped significantly by about 60% year-on-year, partly due to the Spring Festival and weather factors, and more importantly, due to the long overdue period of many project payments last year, many users did not have expectations for this year and were mostly in a wait-and-see period.

The sales of excavators continue to be sluggish, and the trend of domestic brands replacing foreign ones continues. During this research process, we generally felt that most foreign brands are not optimistic about the improvement of market demand this year. Judging from the number of signed orders for some exhibitions that have been held since New Year's Day, it has decreased by 30-50% compared to last year. Some dealers have voluntarily lowered their sales targets for this year, with a decrease of about 10%; However, domestic brand distributors and manufacturers have set high growth targets this year. Compared to their market share, foreign brands place more emphasis on profitability and performance growth.

The equipment rental company is currently in a break even situation, making it increasingly difficult to maintain a positive cash flow. The rental price of equipment varies in different regions. Taking the rental of 20-25T excavators as an example, the hourly rental fee (including fuel, labor wages, and maintenance fees) is around 260-280 yuan in Anhui, around 260-280 yuan in Wuhan, and around 300 yuan in Chengdu. After deducting fuel costs, driver wages, and maintenance fees, the customer's equipment rental fee can only repay the monthly mortgage or rent.

The equipment payback period is prolonged, and the risk of payment collection is increased. At present, the payback period for equipment is 3-4 years, while around 2000 it was only six months to one year. Moreover, the credit sales period of the manufacturer reaches 3-4 years, and the payback period for customer equipment is 3-4 years. The operation of customer equipment is at the break even point, and the extension of the credit period increases the risk of payment collection.

Dealers face high inventory pressure and operating cash flow pressure. Due to poor demand this year, in order to achieve the annual sales target, most agents have adopted a buyout approach. Therefore, there are still 2.5-3 months of inventory left, and some severe inventory has 4-5 months. After New Year's Day, some agents increased the price reduction and collection by paying more cash to offset the total price in order to recoup funds.
Our country's economy is currently undergoing four major transformations: the growth foundation is shifting from labor-intensive to capital intensive, the economic driving force is shifting from investment driven to innovation driven, the organizational structure is shifting from pyramid shaped to flat shaped, and the growth mode is shifting from high energy consumption to low-carbon greening. In order to adapt to these changes, China's construction machinery industry is also undergoing continuous transformation, and integration and high-end development are the two main development lines of the construction machinery industry in the future.

The integration of the construction machinery industry is a trend, and it will become increasingly evident. There are numerous enterprises in China's construction machinery industry, and the competition is fierce. The competitive landscape has not yet been fully formed. But with the transformation of the entire economic growth system, this low-level and homogeneous competition will not exist for a long time. At this time, the development speed of enterprises relying solely on their own strength is too slow. Integrating the strengths of various enterprises and concentrating the advantages of different enterprises will inevitably become an important driving force for the growth of the current construction machinery industry. According to the "Opinions of the State Council on Promoting Enterprise Mergers and Acquisitions" released in September, the machinery manufacturing industry, to which construction machinery belongs, has become one of the key industries for the country to promote mergers and acquisitions. Integration is a trend, but integration is like the waves washing away sand Not all integration can generate competitiveness. The investment opportunities for the integration of the construction machinery industry mainly focus on those enterprises that can successfully internationalize. These enterprises can enhance their overall resource strength by acquiring well-known foreign engineering machinery companies and research and development institutions, or by promoting overseas and aligning with international standards, thus avoiding the disorderly competition of domestic homogenization and standing out in the wave of enterprise integration.

High end is an inevitable development direction for China's construction machinery in the future. The relative competitive advantage brought by low labor costs enables China's low-end engineering machinery products to have a competitive edge in the world Unparalleled competitiveness. But with the transformation of economic development mode, the demand for construction machinery will also undergo fundamental changes. The unprecedented construction of high-speed railways, highways, and large ports, as well as the increasingly high housing requirements, have put forward high reliability and precision requirements for construction machinery, and the process of high-end construction machinery is inevitable. In the Decision of the State Council on Accelerating the Cultivation and Development of Strategic Emerging Industries, the high-end equipment manufacturing industry, which belongs to high-end construction machinery, is specifically listed as one of the strategic emerging industries, which is a concentrated reflection of this trend. A typical example is an excavator. Chinese companies that can successfully enter high-end excavators will have long-term investment opportunities. Chinese domestic brands are basically blank in the high-end excavator market, and Chinese companies that are at the forefront of this competition will receive far greater market returns than before.

Change is a typical feature of China's construction machinery industry during the profound transformation of the current economic development mode, and integration and high-end development are adapting to this major change Good method. Enterprises that can achieve internationalization through integration and successfully expand high-end products to meet market demand have great development prospects.