2013 Chinese construction machinery industry investment needs to be cautious


Last year, the sales of construction machinery products declined significantly. In January-February this year, sales remained low. After eliminating the Spring Festival mismatch factors, sales of construction machinery were only slightly better than the seasonal pattern on a low base of January-February. In the first two months, sales of earth and rock machinery such as excavators, loaders and bulldozers declined by 47%, 32% and 19% respectively year-on-year, which was lower than expected. This was mainly due to factors such as destocking and gradual increase in the operating rate.

During the March-March period, sales of construction machinery increased month-on-month, and demand for excavator machines picked up. Downstream recovery started to improve in mid-to-late March. Although demand picked up in March, sales in the northern region remained weak year-on-year.

Affected by the expected real estate regulation, the overall construction machinery industry is still in a weak recovery phase, and the start-up, inventory, and capital chain risks have all been mitigated. However, with the implementation of the new round of real estate adjustment and control of the New Deal and the introduction of the eight countries and the implementation of specific rules, the investment in the property market is expected to cool down, it also means that real estate control has undergone substantial upgrading and will affect the demand for construction machinery.

The report released by Aegis Union Capital said recently that Europe, which is China's preferred destination for investment last year, will still show great investment attraction this year. China, which has 3.4 trillion foreign exchange reserves, also actively encourages companies to invest overseas, set up factories, and purchase technology to ensure the security of energy and commodity resources. Petri, co-founder and managing partner of Asia-Europe Union Capital, said that investment growth of 2-3 times the economic growth rate will be the mainstream trend, but the absolute number of investments is still very low.

China is currently the third largest foreign investor in the world, followed by the United States and Japan. In 2011, China ranked 16th. Last year, Chinese enterprises invested 77.2 billion U.S. dollars in foreign investment, an increase of 14%, of which mergers and acquisitions were 37.8 billion U.S. dollars, accounting for 49% of all foreign investment. In 2011, this figure was 44%.

According to data from Asia-Europe Union Capital, the spending of mainland Chinese companies in Europe rose by 21% last year, and investment in the United States rose by 48%, of which 14% was for mergers and acquisitions. In Asia, spending fell by 65%.

From the above situation, China's construction machinery companies will continue to face challenges in the future, investment and development need to be cautious.



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