Machinery Industry: Chinese New Year Affects Sales in January and Gives Appeal Ratings

Sales volume continued to decline, and the drop increased this month. According to statistics from China Construction Machinery Business Network, in January 2012, 28 major excavator manufacturers sold a total of 5,221 excavators, a decrease of 53.05% year-on-year and a 38.54% decrease from the previous month. This month's sales of excavators were greatly affected by the Spring Festival and New Year's Day, and the sales volume was greatly reduced. Considering that the total amount of construction in the country had not yet been promoted in January, this month's sales volume is also reasonable. In the first quarter of 2012, it will still be affected by the same period of base year, negative growth year-on-year is still a high probability event, but downstream demand will gradually pick up, and the peak season will come. The sales volume of excavators is expected to gradually increase.

Although exports have increased significantly, they have been relatively low. In January, 345 units were exported, a year-on-year increase of 46.81%, accounting for 6.61% of the total.

Import substitution continues. In January 2012, 9 major foreign brands of excavators sold 3,131 units, a year-on-year decrease of 53.75%, a decrease of 25.91% month-on-month, accounting for 59.97%.

Since the beginning of 2011, the proportion of foreign brands has obviously declined. Although the proportion of foreign investment has risen slightly this month, considering the relatively small overall sales this month, it does not have obvious representation. We think that with the quality of domestic brand excavators. With the improvement of sales and sales network, we believe that import substitution will continue.

This month's product structure increased the proportion of small and medium excavation. In recent months, the proportion of small excavations of 19 tons or less has continued to decline, and the proportion of large excavations of 30 tons or more has continued to rise. The proportion of large excavations has further increased this month. The structure of our excavator products has been tilted towards mid-large digs.

The recent stock price performance of the relevant listed company is far from satisfactory. The price of shares of the seven major listed companies of the excavator all rose in the week and 6 outperformed the A-share index (2.85%). The largest gains were Shantou's 6.59% and the smallest Sany 1.11%; All the month's rise and outperformed the A-shares index (a rise of 5.61%). The biggest increase was Zoomlion's 11.13%, the smallest increase was Sanyou Heavy Industries's 5.96%; all fell in a year, and only Sany Heavy Industry. Both Zoomlion and the company outperformed the A-shares index (a gain of -16.83%), with the largest decrease being Shantou's 49.03% and Sany Heavy with the smallest decrease of 12.38%.