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Machinery and equipment: gross margin fell for three consecutive years

Time:2012-06-15 14:58

   Benefiting from China's entry into the WTO, the machinery and equipment industry has already passed its golden decade. Today, under the macroeconomic slowdown, this former Chinese-style myth has gradually entered a transition period.


   Perhaps this point is not prominent from the overall profit report of the machinery and equipment industry in 2011. After all, in the industry statistics of last year, the average operating income of machinery and equipment reached 2.412 billion yuan, an average compound growth of 23.79% in the past three years, and an average increase of 21.43% as compared with the same period in 2010. From the perspective of net profit, it was observed last year. The average industry level exceeded 200 million, and the compound growth rate in the last three years was 27.31%.


   Industry gross margin declined for three consecutive years


   Let us take a look at the derivative financial indicators of the machinery and equipment industry.


   However, if the net interest rate is examined, the signs of the slowdown in the machinery and equipment industry will be more obvious. The industry's average net margin level is 12.13%, and the profit margin of 142 companies is less than 10%, which accounts for 49.13% of 289, of which 9 are negative.


   As a strong cyclical industry, debt ratio and cash flow more objectively reflect its financial ability than profit. In 2011, the asset-liability ratio of the machinery and equipment industry reached 34.15%. Although this figure was reduced by 13% and 4.45% respectively compared with 2009 and 2010, the asset-liability ratio exceeding 30% shows that the industry is still facing a significant pressure.


   From the cash flow, the tension in the machinery and equipment industry is more intuitive. According to statistics, the average net cash flow from operating activities in 2011 was -4.3334 million, showing that the outflow was greater than the inflow of the ecology. Of the 289 industry companies, 136 were in this state, accounting for 47.05% of the total.


   In particular, Liugong (12.84, -0.18, -1.38%) and Chaori Sun (12.04, 0.05, 0.42%), the two companies were -2.02 billion and -1.07 billion respectively, 2011 annual report shows that Liugong Last year, net profit fell 14.38% year-on-year, and the daily net profit margin of Chaori exceeded 125.29%. The reason was that the cost of the two main businesses was too high, and Liugong 81.5% and Supersun 80.3% cost expenses were squeezed. The respective profit space ultimately affects the net amount of operations.


   However, in order to truly understand the machinery and equipment industry, this gross profit margin is a truly non-negligible indicator in a cyclical industry. Consider that Liugong and Chaoyue Sun's 19.01% and 19.69% knew that the low gross margin is not only Directly led to the dilution of profits, the company's security value will therefore be lost.


   The gross margin of the machinery and equipment industry in the past three years has been in a downtrend channel and has fallen from 30.14% to 28.1% last year. This year-on-year decline since 2009 is suggesting that China's machinery manufacturing industry has reached a crucial crossroads. mouth.


   Down-channel construction machinery


   Machinery and equipment industry, benefiting from the country's macroeconomic policies and investors. Since China's accession to the WTO in 2001, the model of stimulating the rapid development of heavy industry by driving manufacturing industry has become the main theme. During the past 10 years, a series of policies of the State Council have supported the unprecedented development of the machinery manufacturing industry.


   However, under the influence of the macroeconomic downturn, the machinery and equipment industry has entered a downward path. In particular, construction machinery, affected by the winter of real estate and the stalling of railway projects, has had to slow down its pace. Under the trend of increasingly saturated market, the average net interest rate of the 13 listed companies of construction machinery fell to 7.38 last year. %, far below the average of 12.13% of the machinery and equipment industry, of which 10 have fallen below 10%.


   From the perspective of gross margins, the downward trend of construction machinery has also been highlighted, not only for three consecutive years of decline, compared to 28.52% in 2010, and last year's gross margin fell below 27%.


   Even the big companies such as Xugong Machinery are not ideal. Although last year's net profit increased by 30.77% year-on-year, the 10.25% net profit rate has not yet reached the average line in the sector, and the gross profit margin also slipped from 21.69% in 2010 to 20.68%, which is lower than the industry average of about 6 percentage points.


   Moreover, XCMG's operating activities last year generated a net cash flow of -2.03 billion yuan, while the asset-liability ratio climbed from 51.39% in 2010 to 56.34%.


   However, for the construction machinery industry, this year may be the bottom of the year. According to the "12th Five-Year Plan" comprehensive transportation system plan, this year is to build a number of major railway projects. In the most recent period, South China and North China have already shown obvious signs of returning to work. There are more than 40 railways under construction in Guangdong and Guangxi. The project also started to resume work. The return of downstream demand will boost the performance of construction machinery, and the most difficult period will soon pass.


   Focus on machine tool instrumentation


   In the past, the machinery and equipment industry was able to thrive in the past decade, relying on China’s cheap labor. Although this can save the industry’s costs, China’s value chain in the manufacturing industry has been at a premium due to over-reliance and lack of innovation ability. The low-end and unreasonable structure has brought about extensive industrial development.


   An industry analyst told the Money Weekly reporter that the way to overcome this bottleneck is to achieve industrial upgrading and use high-end mechanical equipment to gradually replace the labor force. The sensitive machinery and equipment industry is greatly affected by the macro economy, and the country’s reform trend of supporting high-tech manufacturing technologies not only can bring new growth points to the industry, but also it can be regarded as a safe air cushion for optimizing this industry because of high quality. The technological resources are the core competitiveness of the manufacturing industry.


   According to the aforementioned analyst's judgment, in the machinery and equipment industry, metal products, machine tools and instrumentation will be the subdivided areas for high-end equipment key innovation and development. So, what we want to focus on is what is happening in these areas and what are the potential good companies.


   The first is metal products. The average gross profit margin in this area last year was 27.15%. It has been below the level of the machinery and equipment industry in the past three years and it is in a state of further development.


   From the statistical data, Furin equipment may become the future star in this field. It is one of the few companies whose gross profit margin has been rising steadily year after year. Last year, 30.49% of the gross profit margin ranked at the forefront of metal manufacturing. The key lies in It has undertaken the national "863" project and independently developed LNG vehicle bottle self-supercharging system. It has obtained the approval of the General Administration of Quality Supervision, Inspection and Quarantine. The relevant standards have also passed the overseas assessment and already possess certain technical advantages.


   The machine tool, due to the clear support of the country's "12th Five-Year Plan", has been the focus of R&D. Due to the influence of the industrial restructuring of the downstream aerospace industry, automobiles, and high-speed railways, it is estimated that the demand for high-end CNC machine tools in 2020 will be more than four times that of similar low-end products. Take Nissho Digital (26.95, 0.19, 0.71%) as an example, the gross profit margin in the past three years has been maintained at a high of about 38%, and the net profit last year has increased by as much as 98.34%. Moreover, in the first quarter of this year, it was also affected by the government. More than 8.6 million financial subsidies have great room for development in the research and development of high-end CNC machine tools.


   Finally, in instrument and meter manufacturing, it is a typical high-tech, high-output, low-energy-consuming industry. Under the background of energy saving and emission reduction, the downstream environmental protection industry is moving from manual sampling and experimental analysis to automation, intelligence, and networking. Monitoring direction transition.


   In 2011, 12 listed companies in this field had gross margins of more than 40% in last year. For example, in the first quarter of this year, the remote optoelectronics (43.000, 0.45, and 1.06%) (300306.SZ) were listed, and their gross margins have been three years. Climbing gradually, last year has reached 68.29%, net profit has also increased by 47.48% compared to the same period last year, and its main business ——LED and lighting detection equipment, has recently been supported by national tax relief, intellectual property protection and other policies, downstream demand There will be an explosive growth stage, and the company will also benefit greatly from its technological R&D advantages.