The third quarter machinery industry stabilized

In the third quarter of this year, the growth rate of industrial added value of major macroeconomic indicators affecting China's machinery industry and the growth rate of urban fixed asset investment have gradually stabilized, and the overall operating conditions of the machinery industry have also stabilized at a low level.

Among the major sub-sectors, the year-on-year growth rate of construction machinery that is most sensitive to the economic cycle from June to August has rebounded and recovered weakly; the machine tools and heavy mining machinery that lag behind the economic cycle are still declining. Affected by the continuous fall in the growth rate of industrial production, the demand for electricity is not very high. The operating conditions of power generation equipment, transmission equipment, electrical equipment and industrial energy-saving equipment are all unsatisfactory. The in-depth promotion of smart grid and rural power grid transformation has enabled power automation and distribution networks. Equipment continued to maintain a high degree of prosperity; railway infrastructure investment in August alone completed 39.3 billion yuan, an increase of 19%, which is the first positive growth since May 2011 after 15 months of negative growth, completed in September 64.28 billion yuan, an increase of 111.37% over the same period of last year. Meanwhile, the Ministry of Railways increased the railway infrastructure investment in 2012 to 516 billion yuan. The construction of railways continued to recover. From June to September, New Energy Group Yili Energy Co., Ltd., 2 billion cubic meters of natural gas The project, CLP Power Plant's natural gas investment project, Panan's 1.8 million tonne coal indirect liquefaction project, and coal equivalent of 4 billion cubic meters of coal gas project have been approved, which will benefit related coal chemical equipment companies; wind power and photovoltaic downturn remain in new energy sources No substantial progress was made in the restart of nuclear power; the environmental protection industry entered the policy after the development period.

In the past three months, despite the general operation of the industry as a whole, some companies in the sub-sectors that have little correlation with the economic cycle have continued to grow, such as the grid automation company Sifang shares, LNG equipment company Furui equipment, Distribution network automation leading companies accumulated electronics, as well as the replacement of artificial robots.

With the domestic inflation level falling back to around 2%, the monetary policy that has been constrained by the inflation level in the previous period will be partially liberated. It is expected that the overall macroeconomic policy will stabilize in the fourth quarter, and the machinery industry will also achieve smooth operation.

After the economic adjustment lasted for so long, when the sales data of the major products of construction machinery continued to grow for more than a year, we believe that the arrival of the inflection point may be more in line with the long-term interest of the investment.