Policy fine-tuning is conducive to sales of construction machinery

Premier Wen Jiabao presided over the symposium on the economic situation in four provinces (autonomous regions and municipalities) in Tianjin, Inner Mongolia, Jiangsu, and Shandong. He emphasized: 1. Grasping the direction, intensity, and rhythm of macroeconomic regulation, and paying more attention to the pertinence, flexibility and forward-looking policy. , timely and appropriate pre-adjustment fine-tuning; 2, to maintain a reasonable increase in the total amount of money and credit; 3, to ensure that the state focuses on the funding needs of projects under construction, continued construction; 4, focus on supporting the real economy, especially in line with the industrial policy of SMEs, support The people's livelihood project is especially an affordable housing project.

Comments: The fine-tuning of policies is conducive to sales of construction machinery. From Wenzhou to Ordos to Jiangsu, from the local government to the ministry (Ministry of Railways), the signs of policy fine-tuning are obvious. This is conducive to the release of construction machinery needs, enhance the buyer's liquidity, which is conducive to sales of construction machinery.

The year-on-year growth rate of investment in new projects started to fall, but it is still at a high level, indicating that potential downstream demand is still strong.

According to the statistics released by the Statistics Bureau in September, the year-on-year growth rate of new real estate starts from the previous month's 32% fell sharply to 8.8% this month, diving down; new projects started to accumulate cumulative growth from 8 The 23.1% of the month rose to 23.4% in September, but after adjusting for the base, the monthly growth rate in a single month fell from 54% in August to 26% in September. According to historical data, the year-on-year growth in new projects' planned investment is more forward-looking for the sales growth of excavators. At the same time, although the indicator has declined in September, it is still in a high-growth range, indicating that downstream demand is not as problematic as the market expected, and potential demand remains strong.

The six-month bill rate has already started to fall, which is conducive to the transformation of potential demand into real demand. The six-month bill direct-attached rate representing real economic liquidity has already dropped from 13% of the highest point to 7.5%, indicating that the level of non-government interest rates has started to fall, and the impact of the adjustment of base rate of reserve ratios has gradually disappeared. The gradual recovery of liquidity in the real economy is conducive to the transformation of potential demand into real demand.

Sales in October are expected to continue to rebound. Historically, sales in October generally rose slightly from September. According to our survey of agents, October was basically in line with seasonal characteristics, and the probability of a rebound of around 10% was higher. Construction machinery has passed its worst time and seasonal features have begun to appear. This is different from the situation in which the peak season since April was significantly weaker than in previous years.

Maintain Buy rating on leading companies. The policy of targeted easing will ensure the smooth implementation of key projects, and it will also help relieve the capital shortage of downstream customers of construction machinery. Intuitively, the straight-on interest rate for the 6-month bills began to decline, which is conducive to the sales of construction machinery reaching a low point. At present, the leading company's valuation of about 10 times is at the historical bottom, and it is still recommended to buy Sany Heavy Industry and Zoomlion.