Machinery Industry: Mining Value Investment Opportunities from the Bottom Up
Sand Casting,Die Casting,Aluminum Alloy Die Casting CNC Machining Parts Co., Ltd. , http://www.nscncmachining.com
Bottom-up mining value investment opportunities: China's economy fell in the third quarter, signs of monetary policy relaxation is not obvious, slowdown in high-speed rail construction, the global debt crisis + local debt crisis triggered, the global stock market wretched.
In September, PMI rebounded, and the track sales of construction machinery products also experienced seasonal recovery. However, corporate capital pressure was greater. Commodity prices remain low, and the appreciation of the renminbi, the pressure on the cost of the machinery industry is not great.
In the fourth quarter, the machinery industry lacked opportunities for plateauing and concerned about changes in policy expectations. Leading companies showed a strong position in the industry chain and bargaining power, focusing on value investment opportunities after oversold.
On the valuation: At present, the A-share market under the pressure of liquidity and expansion, the valuation is difficult to increase, rebound catalyst may come from the fiscal policy, monetary policy, the rhythm of the release, the "second five" industrial planning changes. It is not pessimistic about investing next year. The government planning cycle for the five years from 2002-2007-2012 is obviously characterized. Comparing the previous two economic lows, PE lows were 8-10 times in 2004-2005, PE lows in 2008 were 12-15 times, experienced a decline in the past year, and the current valuation of the machinery industry has a margin of safety!
In September, domestic sales of construction machinery will pick up seasonally. Exports in the second half of the year are expected to be better than the first half. Due to the high base of construction machinery sales in the third quarter of last year, the quarterly report was harder than expected. However, from the sales data of some companies tracked in September, there were signs of recovery. From the valuation point of view, close to the bottom of history, valuation rebound will mainly depend on changes in policy expectations and investment expectations for next year, waiting for investment opportunities.
Coal investment in fixed assets recovered steadily, and the coal machinery industry grew steadily. From January to August, the investment in fixed assets in the coal mining and washing industry increased by 22.60% year-on-year, and the growth rate increased by 0.6% from January to July. The seasonal characteristics of the coal machinery industry are not obvious, but usually the settlement and delivery are more in the fourth quarter. At present, the listed companies have sufficient orders and this year's performance is guaranteed. Enterprises with technological and financial advantages will gain industry consolidation opportunities.
The negative impact of the global debt crisis on the machinery industry is not yet obvious. In August, the CAT dealership index increased by 34% year-on-year. The growth rate decreased by 1 percentage point from the previous month, and fell for four consecutive months. The EAME region and the Latin American region index fell at a high level, and the growth rate in the Asia Pacific region increased by 4 percentage points from the previous period. In August, Japan's cutting machine tool orders continued to fall, with a year-on-year increase of 15.3%, and export orders fell by 20% from the previous month.
In August, railway investment dropped sharply year-on-year, and investment in the fourth quarter still hardly rebounded. Since the beginning of this year, new projects for high-speed rail projects have only opened passenger dedicated lines at the end of February. At the same time, investment in existing projects has also slowed down. Both the Ministry of Railways and local governments have been affected in terms of financing, and there is still a possibility that performance forecasts may be lowered.