Machinery industry: May value stems from growth adjustment brewing opportunities

Investment Highlights:

Macroeconomics are good, but the uptrend still needs to be confirmed

The decline rate of the macroeconomic prosperity index has slowed down and signs of stabilization have been evident; the PMI index has ended its downward trend, and the manufacturing industry has regained its expanding trend; both the amount of urban fixed asset investment and newly completed fixed asset investment have reversed the unfavorable situation at the beginning of the year, on schedule. A rebound was achieved, but the power was obviously insufficient compared with the same period of previous years; the prices of major raw materials were mixed, and the cost pressures faced by the machinery industry showed signs of slowing down. Due to various signs that the recovery of the upstream and downstream sectors of the manufacturing industry still lacks strong support, the rising trend at the beginning of the year is a beginning of a new round of the business cycle, and it is still difficult to determine the beginning of a new round of the business cycle.

The output of major products kept growing

The output of all major machine tools has maintained a trend of growth. Compared with ordinary machine tools, CNC machine tools have shown more robust growth. It shows that the product structure changes gradually with the increase of output, and the rate of numerical control increases. Has become a long-term trend. The output of major mechanical components also maintained a year-on-year growth. Among them, the hydraulic components topped the growth rate of 74.59%, and the year-on-year growth of valves and gears was also significantly higher than the same period of previous years, despite the fact that pneumatic components, Rolling bearings, metal fasteners and other products still achieved year-on-year growth, but the growth rate slowed down significantly from previous years. In addition, the output of major products of construction machinery showed a growth trend, but the difference in gains and differences among different products was more obvious. Among them, the increase in the trend of compaction machinery was the most rapid. Although the output growth of cranes was also higher than the same period of last year, it was substantially larger than at the end of 2010. Callback; excavation shovel transportation machinery, while maintaining a 40.81% year-on-year growth rate, but compared with last year's peak has passed; although the growth rate of concrete machinery has declined compared to the beginning of the year, but still achieved a substantial increase compared with the same period last year.

Market performance and major perspectives

In April, driven by the turbulence in the broader market, the China CITIC First Class Machinery Industry showed a unilateral decline. Despite a slight rebound in the initial period and the end of the month, it was driven by the theme investment trend at the beginning of the year. The pressure on valuation and the poor performance of the fundamentals caused by the tightening of the macro investment environment all made it difficult for the machinery industry to exceed the performance of the broader market. Eventually, the monthly decline of 5.65% ranked the 24th in the industry’s rise and fall of the CITIC level. .

Along with the constant decline of the industry index, the long-term high level of the P/E of the machinery industry has also shown signs of loosening, and in mid-April ushered in a long-lost downward trend, this is not only the first time since 2011, the machinery industry has obviously declined valuations The trend, relative to the continuous expansion of the valuation advantage of Shenzhen A-shares, and the continuous narrowing of the valuation premium of Shanghai A-shares, indicates that despite the short-term investment opportunities in the machinery industry with the theme of “recovery of valuation” The probability is still low, but with the continuous recovery of the industry valuation premium level to a reasonable range, the buying opportunity is gradually emerging.

Looking ahead to May, under the background of the retreating theme investment trend and increasing valuation level, the machinery industry is no longer the focus of funds chasing. With the successive disclosure of the company’s annual report and the quarterly report, it is difficult for the industry’s performance to meet expectations. The market performance provides strong support, so in the relative vacuum period of fundamental information disclosure and industrial policy, in the macro environment with a relatively definite tightening trend, the shock adjustment of the mechanical industry market trend and the price-earnings ratio level is still a large probability event. Give a neutral rating.