Performance of the hottest machinery industry in 2

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Performance analysis of the machinery industry in 2018 and the first quarter of 2019

revenue maintained a double-digit expansion, and concentrated goodwill impairment dragged down profit performance: the total revenue of the machinery industry in 2018 was 1.13 trillion yuan, with a year-on-year increase of 17.11%. The growth rate declined, but it was still at a double-digit expansion level

since the capital construction investment increased in the second half of 2016, the annual revenue of the machinery industry has maintained a rapid growth rate

the overall net profit of the industry was 39.1 billion yuan, a year-on-year decrease of 29.1%, mainly due to the centralized and substantial impairment of goodwill by some enterprises. The profit performance of the construction machinery industry is outstanding, and the profit margin and roe continue to improve; The industry concentration will continue to increase, and there is still room for improvement in the profits and profit margins of complete machine plants represented by SANY, XCMG, Liugong and Zoomlion. On the other hand, the performance of intelligent equipment is different due to downstream demand. At this time, lithium battery equipment, semiconductor equipment, and surface need to be unloaded and cleaned. The automation industry still shows good growth, while industrial robots, 3C, automotive electronics, etc. have maintained growth, but the growth rate has fallen compared with the same period last year, mainly due to the sluggish performance of Automotive, 3C and other industries since the second half of 2018, which has affected the enthusiasm of downstream enterprises for equipment investment

the sub sectors are uneven, and the contribution of construction machinery and railway equipment to profits is obvious: the performance of each sub sector of the machinery industry is uneven. In terms of the absolute amount of revenue, railway equipment, engineering machinery, metal products, special equipment, etc. account for a relatively large proportion; From the perspective of business demand for fine grinding and processing of rough machined workpieces, 15 of the 21 sub industries maintained positive growth, including metallurgical, gold mining and chemical equipment, metal products, instruments and meters, heavy machinery, etc., all achieved double-digit growth. In terms of net profit, six of the 21 sub industries maintained positive growth, including textile and clothing equipment, engineering machinery, refrigeration and air conditioning equipment, heavy machinery, metal products and other general machinery. Among them, construction machinery achieved a net profit of 13billion yuan in 2018, with a year-on-year increase of 59%, accounting for 30.1% of the overall profit of the machinery industry

financial indicators such as cash flow and accounts receivable continued to improve, and the overall operation quality of the industry was improved: the inventory level of the industry remained rising, with an increase of 15.82% over the same period last year, and the growth accelerated in the past three years; Accounts receivable increased by 5.93% over the same period last year, and the growth rate decreased compared with the previous year; Inventory and accounts receivable turnover are still on the rise. Net operating cash flow continued to improve in 2017, with a significant year-on-year increase of 35.6%, and significantly higher than the level of net profit in January 2012. Industry management enterprises can neither participate in competition in full accordance with the rules of market economy like foreign enterprises, but the cost rate is still in the downward channel, but the decline has been significantly narrowed

the financial expense ratio decreased to 1.33%, which benefited from the good cash flow situation of the industry on the one hand, and the financing cost of the enterprise was significantly reduced on the other hand. The overall gross profit margin of the industry was 23.04%, a year-on-year decrease of 0.94pct, mainly due to the sharp rise in raw material prices in 2018, which led to the increase in the cost of the machinery industry; Since this year, the price of raw materials has fallen, and the pressure on gross profit margin is expected to be eased. The overall net interest rate of the industry fell significantly, from 6.3% in the same period last year to 3.85%, mainly because some enterprises in the industry have significantly concentrated on the provision for goodwill impairment. On the whole, the operation quality of the machinery industry is still improving, the efficiency is improving, and there is still room for profitability

the growth rate of revenue and net profit in the first quarter of 2019 is still at a historically good level: the total revenue of the machinery industry in the first quarter of 2019 was 266.4 billion yuan, an increase of 19.0% year-on-year, and the revenue growth rate fell from 25.9% year-on-year, but still maintained a double-digit growth; The overall net profit attributable to the parent company of the industry was 16billion yuan, maintaining a high growth rate of 35.7%. The inventory level maintained a rising trend, rising to 380billion yuan, an increase of 12.42% over the same period last year

accounts receivable were 313.8 billion yuan, a decrease of 19.3% over the same period last year. The turnover rate of inventory and accounts receivable has continued to improve, showing that the machinery industry has a good collection, pays more attention to risk control, and the overall business quality has been continuously improved. The management expense rate and sales expense rate remained stable, and the financial decline was obvious. The gross profit margin increased slightly by 0.1pct year-on-year,

it is expected that the annual gross profit margin will increase under the influence of raw material prices and the implementation of tax reduction and fee reduction policies. From the performance of single quarter revenue and net profit in the first quarter, it is not easy to maintain a high growth rate under the high base in the same period. We judge that the machinery industry will remain stable and positive this year, and the comprehensive gross profit margin of the industry will increase under the expectation that the price of raw materials will fall; Last year, the risk of net profit decline caused by goodwill impairment will be significantly reduced, and it is expected to maintain a growth rate higher than revenue. In particular, the field of intelligent equipment is expected to relay construction machinery and become the main driving force for profit margin improvement

risk tip: the persistent risk of domestic macroeconomic recovery; The process of industrial transformation and upgrading is slow and does not meet expectations

the risk of later business integration brought by capital operation; The uncertainty risk of the scale of Sino US trade friction

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