Core Views
The machinery and equipment manufacturing industry is expected to breed multi-dimensional investment opportunities, and many sub-sectors are expected to produce world-class enterprises. 's reasons are as follows: (1) The general trend of manufacturing upgrading: China's manufacturing industry has highlighted its advantages in the post-epidemic era, and its international competitiveness has been further improved. Manufacturing upgrade is the future trend. high-end equipment manufacturing industry will lead China's manufacturing industry upgrading. (2) The Zhugela cycle has begun: China's manufacturing industry's investment peak in the past two rounds was benefited from the joining of WTO in 2001 and the 4 trillion stimulus in 2008. 2011 was the high point of demand for many machinery and equipment. According to the equipment update cycle for more than 10 years, the demand for equipment updates is booming. (3) Competitiveness enhancement: Many companies in the field of mechanical equipment have experienced from imitation to innovation and have a certain technical level. Through continuous market cultivation and self-iteration, their competitiveness is expected to gradually improve to grow into world-class leading enterprises.
2020 H1 Review: Pro-cyclical + new energy growth leads, and Science and Technology Innovation Board performed well. The mechanical sector trend in the first half of 2021 is basically the same as that of market . The cumulative increase of the machinery industry has been 0.62% since the beginning of the year. The top-ranking sub-sectors are injection molding machines , machine tool tools, testing services, oil and gas development equipment, lithium battery equipment, semiconductor equipment, laser, and photovoltaic equipment. From the perspective of stocks, , the mechanical sector performed well in the science and technology innovation stocks in the first half of the year.
2021 Grasp three main investment lines in the second half of the year:
Main line 1: The manufacturing investment has recovered, the Zhugela cycle has begun, the pro-cyclical equipment prosperity continues, and we are optimistic about machine tools, injection molding machines, robots, laser equipment, and other pro-cyclical general equipment. It is recommended to pay attention to the targets Genesis, Oukeyi , Huarui Precision, Yizhimi, Haitian International, Eston , Tosda , Ruike Laser, etc.
Main line 2: Under the background of carbon neutrality, we are optimistic about photovoltaic equipment and lithium battery equipment. We recommend paying attention to the target Maiwei Co., Ltd. , Jiejia Weichuang, Dier Laser, Pilot Intelligence, Hangke Technology , etc.
Main line 3: Export recovery, the container industry has both volume and price increase, it is recommended to pay attention to the target CIMC Group . The leader in engineering machinery has export competitiveness and is expected to grow into a global leader. It is recommended to pay attention to the leader in engineering machinery, which has a valuation that has entered a reasonable range after the pullback.
1. Review of the mechanical sector in the first half of 2021: Pro-cyclical + new energy growth leads, and science and technology innovation stocks performed well
(I) Overall performance of the sector: basically consistent with the market trend
2021 The mechanical sector trend in the first half of 2021 is basically consistent with the market. years from now on, the cumulative increase of the machinery industry has been 0.62%, ranking 19, which is basically consistent with the trend of the Shanghai and Shenzhen 300 Index. From the trend, it is mainly divided into (1) fluctuating upward
(2021/1/4-2021/2/18): before the Spring Festival, stocks with large market value performed better, (2) decline (2021/2/19-2021/5/13): after the Spring Festival, stocks with group collapsed, and stocks with large market value fell, driving the sector to decline, (3) bottomed out and rebounded (2021/5/14-to-now): After the market fluctuated, bottomed out and hit , the style changed to explore second-tier leaders and small-cap high-quality targets, and many sub-sectors of machinery benefited from the upward trend, driving the sector to rebound.
(II) sector valuation: It has fallen from the beginning of the year
As of June 15, 2021, the valuation level of the mechanical equipment sector was 25 times, down from the beginning of the year 31 times, mainly due to the decline of large-cap stocks in the sector. The current valuation level is at 16th in the entire industry.
(III) Sub-industry performance: Pro-cyclical and new energy equipment have the highest growth rate
We divide the mechanical equipment industry into 4 large areas and 14 small areas. The sub-sectors with the largest increase in the first half of the year are injection molding machines, machine tool tools, testing services, oil and gas development equipment, lithium battery equipment, semiconductor equipment, laser, and photovoltaic equipment.
(IV) Performance of individual stocks: The Science and Technology Innovation Edition performed well
From the perspective of individual stocks, the mechanical sector has the highest growth in the first half of the year and has entered the investment vision are the Science and Technology Innovation Board stocks, especially the Science and Technology Innovation Board stocks. The representative ones are two pairs of Gemini: machine tool tools Gemini - Oukeyi, Huarui Precision, laboratory testing equipment Gemini - Leibotech, and Titan Technology.
2. Mechanical industry research framework: Measuring the mechanical sector from the two dimensions of demand and competitiveness
(I) Mechanical equipment is located in the middle and middle stages, and the downstream involves many manufacturing categories
Machinery is the largest and most important sector in the midstream manufacturing industry, and the downstream involves all aspects of fixed asset investment . Most of the products of machinery companies are capital products, mainly used for downstream expansion, so they are directly related to the prosperity and demand of downstream industries. Affected by the low base, the cumulative year-on-year growth rate of fixed asset investment in January-April 2021 reached 19.9%, of which real estate development investment increased by 21.6%, manufacturing investment increased by 23.8%, and infrastructure investment increased by 16.91%.
(II) Measuring the mechanical sector from the two dimensions of demand and competitiveness
We split the investment logic of machinery into demand logic and competitiveness logic. At the current point, the five major factors affecting the upward demand of the machinery sector are: recovery in manufacturing investment, recovery in exports, new energy revolution, replacement of machines and updates and upgrades. The perspectives that reflect the competitiveness of machinery companies include import substitution and concentration improvement (integration).
Based on the above analysis, we are optimistic about investment opportunities in the following three directions and fields in the second half of 2021:
Main line 1: The manufacturing investment has recovered, the Zhugra cycle has begun, the pro-cyclical equipment prosperity continues, and it is optimistic about pro-cyclical general equipment such as machine tools, injection molding machines, robots, laser equipment, etc. It is recommended to pay attention to the targets such as Genesis, Oukeyi, Huarui Precision, Yizhimi, Haitian International, Eston, Tosda, Ruike Laser, etc.
Main line 2: Under the background of carbon neutrality, we are optimistic about photovoltaic equipment and lithium battery equipment. We recommend paying attention to the target Maiwei Co., Ltd., Jiejia Weichuang, Dier Laser, Pioneer Intelligence, Hangke Technology, etc.
Main line 3: Export recovery, the container industry has both volume and price increase, it is recommended to pay attention to the target CIMC Group. The leader in engineering machinery has export competitiveness and is expected to grow into a global leader. It is recommended to pay attention to Sany Heavy Industry, Hengli Hydraulic, etc., whose valuation has entered a reasonable range after the pullback.
3. Outlook for the second half of 2021: Layout the three main lines of manufacturing upgrade + carbon neutrality + export recovery
(I) Main line 1: The manufacturing investment has recovered, the Zhugela cycle has begun, and the pro-cyclical equipment prosperity continues
Outlook In 2021 and beyond, we believe that the recovery of this round of manufacturing investment has started and can continue in 2021. The typical characteristics of this round of recovery in manufacturing investment will be " manufacturing upgrade ", which is specifically reflected in the three major trends of increasing the proportion of high-end products, increasing the proportion of automation transformation, and increasing the degree of domestic production.
As the recovery of investment in manufacturing, we focus on the four industries of machine tools, injection molding machines, industrial robots and lasers, both belong to the general equipment field with the nature of "industrial mother machines". Due to different stages of development in each industry, the logical focus of the current point of time is different. Among them, machine tools and injection molding machines are more cycle-oriented, while industrial robots and lasers are more growth-oriented. The machine tool field is expected to start a new round of Zhugra cycle demand is on the rise. The overall machine link is currently scattered and domestic integrators are expected to appear in the future. The consumables link is the best link in the industrial chain. We are optimistic about the import substitution of domestic tool companies. Injection molding machines should pay more attention to export and pattern changes, and focus on pattern evolution in second-tier enterprises. Robots pay more attention to the expansion of industry space and the trend of import substitution. Laser is more interested in the pace of penetration rate and breakthroughs in domestic high-end fields.
machine tool : The industry is at the bottom of a 10-year large cycle, and industry integrators are expected to be born in the future; machine tool tools, as a typical industrial consumable, have a more stable demand, and we are optimistic about the import substitution of domestic cemented carbide tool factories.
Injection molding machine : The global economic recovery export market is expected to expand, and pattern optimization focuses on the evolution of the pattern of second-tier enterprises.
Industrial robot : In the post-epidemic era, the replacement of machines accelerates, the trillion-dollar market is ready to go, and the technological progress of domestic brands promotes import substitution.
Laser : Application scenario breakthrough continues to expand the incremental market, competition in the medium and low power fields is getting fierce, product upgrades, raw material homemade rate increase, and high-power laser product performance improvement promotes the process of domestic production.
1. Machine tool machine: The ten-year Zhugra cycle has started. I am optimistic that the machine tool industry has a domestic integrator
machine tools has a general product life of about 10 years, so the industry is about every 7-10 years. According to statistics from Gardner Intelligence in the United States, consumption and production in the world's metal processing machine tool industry peaked in 2011, at US$109.2 billion and US$108.9 billion, respectively, and then generally declined. Consumption and production in 2020 were US$66.8 billion and US$68 billion, respectively, both hit a decade-long low. Judging from the Chinese data in 2020, the industry's prosperity has rebounded, but the global industry can still be said to be at the bottom of the cycle.
my country's machine tool market has a market scale of 100 billion, but it is large but not strong and extremely scattered. According to the statistics of China Machine Tools Industry Association , there were 831 metal cutting machine tools and 530 metal forming machine tools in 2020, and the industry and its dispersion. Machine tools can be divided into metal cutting machine tools and metal forming machine tools in terms of category, among which metal cutting machine tools are divided into machining centers ( milling machine ), lathe , grinder , etc. Among them, machining centers and lathes are large categories, which are expected to account for 40%-50% of the gold cutting market size respectively, and grinders are small categories, accounting for less than 10% of the gold cutting market size. Among them, the largest shipment volume in the machining center is vertical machining center .
Market participants in my country's machine tools can be divided into European, American, Japanese, Korean, Taiwanese-funded and mainland enterprises according to the market gradient. The representative enterprises are Mazak, Demaji, Doosan , Youjia, Genesis, Haitian Seiko , etc.
•Schematic changes: Industry concentration is increasing year by year, and domestic brands are entering the top.
•Future trend: It is expected that the market concentration will further improve, and more domestic companies will enter the top camp, and the high-end market will become the main growth point.
2. Machine tool tools: A good track for carbide tools, a good track for pro-cyclical consumables, a wide space for imported substitution
CNC tools, pro-cyclical good track. Since 2020, demand has been rising, and volume and price have increased. machine tool tools are typical industrial consumables, with a global market size of 200 billion, with a steady growth each year. The Chinese market size is at 40 billion, which is closely related to the development of the manufacturing industry. Since the post-epidemic era in 2020, PMI has always been above the boom and bust line. The manufacturing industry has risen, driving demand and production in related industries. The tool industry has grown accordingly, showing that both volume and price have increased.
CNC rate has increased, the proportion of cemented carbide has increased, and the development prospects of cemented carbide CNC tools are broad.
Increased CNC rate: In my country's tool product consumption structure, due to the low CNC level of machine tools (43% in 2020), traditional welding tools still account for a certain proportion. With the upgrading of manufacturing, CNC is an inevitable trend for machine tools, and the proportion of CNC tools is expected to increase accordingly.
The proportion of cemented carbide increases: From a global perspective, cemented carbide accounts for the dominant proportion (accounting for more than 60%). The proportion of cemented carbide in the Chinese market has also increased year by year in recent years. The output value in 2019 accounts for 47%, and is expected to further increase in the future.
my country's tool market structure is relatively scattered, and the proportion of high-end is increasing under the background of manufacturing upgrades. The industry's supply and demand are in short supply and domestic production are progressing, and import substitution is right.
Concentration: my country's tool market competition pattern is divided into three major camps: Europe, America, Japan and South Korea, and domestic. The current pattern is relatively scattered. The global leader Sandvik has a market share of only 7.41% in the domestic market, and the domestic leader Zhuzhou Diamond has a market share of 3.17%. From the global market perspective, Sandvik tool revenue exceeded 30 billion, with a global market share of 13.3%. Under the background of manufacturing upgrading, the proportion of high-end in China is expected to increase and drive the industry concentration to increase.
Domestic: The technological progress of domestic brands combined with cost-effectiveness and localized service advantages have gradually realized import substitution.
3. Injection molding machine: Pay attention to exports and pattern
Injection molding machine is the most important category among plastic molding machines, with the largest output, the highest output value and the most exports. The global market exceeds 100 billion, and the domestic market exceeds 40 billion in 2020. From the perspective of global competitive landscape, it is currently at the high end of Japan and Europe monopoly, but domestic high and mid-range brands represented by Haitian are constantly narrowing the gap with foreign countries, thereby accelerating the industry competition pattern of domestic substitute for imports. In the next few years, it is expected that the market size of my country's injection molding machine industry will show a growth trend. In the long run, the injection molding machine industry is also expected to be in a spiral upward state. There are three main reasons why the market size of China's injection molding machine industry will continue to grow: lightweight automobiles have become the development trend of the automobile industry, and the growth of demand in the automobile industry will significantly accelerate the development of the injection molding machine industry; plastics have the characteristics of light weight, high strength, good toughness, easy processing, and reusable. In the context of the new industrialization process, the application fields are constantly expanding, providing strong growth potential for the prosperity of the injection molding machine industry.
Relying on domestic price advantages, product technology has been continuously upgraded and industrial structure has been continuously optimized. The global market share of domestic injection molding machine companies is expected to further increase. The huge demand in overseas markets will help China's injection molding machine industry continue to develop.
4. Industrial Robots: Robot substitution accelerates in the post-epidemic era, technological progress of domestic brands promotes import substitution
The industrial robot industry is in an upward prosperity, the trillion-dollar market is ready, and the industrial robot industry ushers in a turning point in prosperity. Judging from the monthly output data, the industry recovery began in the fourth quarter of 2019. The monthly production growth rate of industrial robots turned positive in October 2019, ending the decline since the second half of 2018. It declined at the beginning of 2020 due to the impact of the epidemic, and it resumed its upward trend after the epidemic. In 2020, the cumulative production of industrial robots reached 237,068 units, an increase of 19.1% year-on-year. In April 2021, the production of robots reached 30,000 units, a year-on-year increase of 43%, the best in history in April. The cumulative output from January to April was 105,000 units, a cumulative year-on-year growth rate of 79.2%.
The wave of " machine replacement " is still there in the post-epidemic era. The increase in the density of industrial robots has brought huge market space, and the trillion-dollar market is ready to go. The Chinese market has become the largest market for industrial robots, contributing more than 30% of the global industrial robot sales, with a market size of 40 billion in 2019. However, the density of Chinese industrial robot is only 187 units/10,000 people, lagging behind other industrial countries and has great room for improvement. If it reaches the level of 364 units/10,000 people in Japan, it will be a market with an annual market size of 80 billion. In the future, against the backdrop of the disappearance of demographic dividend and rising labor costs, China will enter a stable growth stage of the industrial robot industry like Japan in the 1980s and 1990s, and the CAGR is expected to exceed 20% in the next three years.
The domestic industrial chain is gradually improving, and this round of industry recovery will be accompanied by the increase in the domestic production rate.
Currently, the domestic production rate of my country's industrial robot bodies and core components is relatively low. Currently, more than 70% of the main market is occupied by foreign brands.In terms of core components, the three core components of reducer, servo system, and controller are the core technical barriers of industrial robots, accounting for about 36%, 24% and 12% of the cost of industrial robots respectively. At present, the three core components of domestic industrial robots are still dominated by foreign brands.
Domestic robot companies have gradually strengthened their technological research and development and innovation capabilities, and their technical level has gradually caught up. As my country's robot market continues to expand and the breakthrough in the localization of key core components, the main enterprises have continuously improved their technological innovation capabilities and achieved remarkable results, and the technological gap between home and abroad has been narrowing. In the future, with the continuous strengthening of my country's industrial robot technology, the domestic production rate is expected to gradually increase.
5. Laser: Application scenario breakthrough continues to expand the incremental market, import substitution is unstoppable
Laser processing replaces traditional processes, and intelligent manufacturing has broad prospects. The high brightness, high directionality, high monochromaticity and high
coherence characteristics of make laser processing both economical and social benefits. The characteristic of laser processing and manufacturing is that laser processing systems are easy to control, and can combine laser processing systems, robot system with computer CNC technology, etc., with high flexibility, fast processing speed, high production efficiency, and short product production cycle. The industry has broad development prospects.
import substitution opens the stock market of tens of billions, and continues to expand the incremental market through breakthroughs in application scenarios. The upstream components of the laser industry include optical components such as light source materials and pump sources. According to the "2020 China Laser Industry Development Report", the global laser upstream components market size exceeded US$700 million in 2019, and the midstream laser market size reached US$14.73 billion, of which industrial lasers were US$4.93 billion; the Chinese laser market size was close to RMB20 billion, of which fiber laser shipments accounted for half of the total. The market size of China's downstream laser equipment has reached 65.6 billion yuan, with an annual compound growth rate of more than 20% in the past ten years. In the future, demand in emerging fields such as OLED and semiconductors will have a strong expansion of incremental space. At the same time, LED and PCB supporting automation equipment can also open up the ceiling of segmented fields.
import substitution is unstoppable, and high-power lasers have become the core part of the competition. has completed the localization process in the low-power field, more than half of the domesticization in the medium-power field, and the domesticization rate in the high-power field is rapidly increasing, and the competitiveness of domestic manufacturers is constantly increasing. At present, except for the core components such as pump sources and active fibers that cannot be fully self-produced, the other components are supplied by domestic manufacturers. The living space of foreign laser manufacturers in China has been further compressed. In 2019, IPG occupied 42% of the market share in China, down 8% from 2018; Ruike Laser's market share increased from 17.8% to 24% in 2019; in addition, Chuangxin Laser and Jeput accounted for 12% and 3% of the market share respectively. The trend of domestic laser production may be established. Fiber lasers, external lasers, and ultrafast lasers are products with great potential for domestic production. The current price war in lasers, especially in the medium and low power fields, has entered a white-hot stage. Product upgrades, increased raw material self-made rate and performance improvement of high-power laser products are expected to help the domestic production process.
(II) Main line 2: Under the background of carbon neutrality, we are optimistic about photovoltaic equipment and lithium battery equipment
Carbon neutrality kicked off, and the equipment manufacturing industry is expected to play an important role. On the one hand, low-carbon power generation in the power field is the top priority of "carbon
neutralization". In the future, China's energy structure will transform from traditional fossil energy to clean energy such as photovoltaic , wind power, nuclear power, etc., opening up development space for the long-term development of related industries. On the other hand, the transportation level needs to accelerate the decarbonization process, and electric vehicles are still the future development direction. In addition, the global launch of automobile electrification simultaneously, a new round of expansion of power batteries is coming.
1. Photovoltaic equipment: Global photovoltaic installed capacity is expected to grow significantly, and technology continues to iterate photovoltaic equipment demand is highly elastic
During the 14th Five-Year Plan period, global photovoltaic installed capacity is expected to grow significantly. 1) Photovoltaics has shown potential to surpass the economics of coal-fired power generation; 2) China has completed the planning target of 15% of non-fossil energy consumption one year ahead of schedule, which is very close to the target of 20% in 2030, and the probability of being completed ahead of schedule is high; 3) In October 2020, EU officially increased the 2030 greenhouse gas emission reduction target from 40% to 60%, which is expected to drive the rapid increase of renewable energy share in terminal consumption.
technology continues to iterate to give photovoltaic equipment higher demand elasticity. Behind the oversupply on data is the industrial law that old production capacity is rapidly eliminated due to cost and efficiency gaps in the process of technological iteration of the photovoltaic industry. We believe that the market still underestimates the demand for capacity expansion in all links of the photovoltaic industry chain and underestimates the equipment demand elasticity driven by new technologies and processes.
Silicon wafer Equipment: In 2025, the market space of silicon wafer equipment is expected to reach 24.3-27 billion yuan, with an annual compound growth rate of 10.7%-13.0% in the next five years. 2020~2022 is the stage of rapid increase in the penetration rate of large-size single crystal , and the demand for silicon wafer equipment is expected to grow rapidly.
• battery cell equipment: Large-size dividends are spreading to the battery cell link, PERC ushers in accelerated production expansion, 2021 is an important window period for HJT industrialization, and the penetration rate of HJT is expected to gradually increase in the future. The momentum of equipment growth has been switched from PERC to HJT, and demand is expected to grow rapidly in the next five years.
•Component Equipment: Large silicon wafers and multi-main gate technology jointly promote a new round of production expansion and accelerate the elimination of old production capacity. The demand for components and equipment in 2021 may usher in a phased peak, and subsequent update demand is expected to grow relay.
2. Lithium battery equipment: A new round of expansion of power batteries is coming, and the equipment side is the first to benefit
Global new energy vehicles have entered a new stage of growth, and power batteries usher in a wave of secondary expansion. Domestic: Since the second half of 2020, China's new energy vehicle market demand has been switched from policy-driven to marketization, and it is expected that new energy vehicle sales will continue to maintain high growth during the 14th Five-Year Plan period. Overseas: Europe's electrification process is accelerating, and the willingness to expand lithium batteries is clear. It is estimated that by 2025, the production capacity of major power battery factories in the world will increase by about 1,400Gwh compared with the end of 2020, with an average annual increase of 280Gwh, corresponding to the global average annual market size of lithium battery equipment from 2021 to 2025, with an average annual compound growth rate of up to 40%. Focus on the target Pioneer Intelligence and Hangzhou Technology.
(III) Main line 3: Export recovery, pay attention to the container industry with both volume and price increase and the engineering machinery leader with export competitiveness
1. Export recovery, the container industry with both volume and price increase
Since 2015, the new shipping cycle has begun, and the growth of new ship orders has brought about new demand and update demand for containers. The world's container capacity has steadily increased. Container supply and demand tightness has led to container prices remaining high, and container prices are expected to remain until the end of the year. Container leader CIMC Group benefited from the high performance growth elasticity.
2. The leader of construction machinery has export competitiveness and is expected to grow into the global leader
This year is a year when opportunities and risks of construction machinery coexist: the opportunity lies in the export market. With the easing of the overseas epidemic and the new round of infrastructure real estate cycle in Europe and the United States, overseas construction machinery demand is booming. Domestic leaders have a certain brand influence, and overseas channel layout is gradually improving, and are expected to grow into the global leader; the risk lies in the domestic market, the new real estate construction and infrastructure growth rate have dropped. The monthly excavator sales have turned negative in April-May, and sales may still decline in the second half of the year. Sany Heavy Industry & Hengli Hydraulics: Domestic leaders already have international competitiveness. It is recommended to pay attention to the investment opportunities of leading companies whose valuations have entered a reasonable range.
4. Pay attention to the main line
2021. Grab three main lines of attention in the second half of the year:
•Main line 1: The manufacturing investment has recovered, the Zhugela cycle has begun, the pro-cyclical equipment prosperity continues, and we are optimistic about pro-cyclical general equipment such as machine tools, injection molding machines, robots, laser equipment, etc.
• Main line 2: Under the background of carbon neutrality, we are optimistic about photovoltaic equipment and lithium battery equipment. It is recommended to pay attention to the targets such as Maiwei Co., Ltd., Jiejia Weichuang, Dier Laser, Pioneer Intelligence, Hangke Technology, etc.
• Main line 3: Export recovery, and the volume and price of the container industry have increased. The leader in engineering machinery has export competitiveness and is expected to grow into a global leader. It is recommended to pay attention to Sany Heavy Industry, Hengli Hydraulic, etc., whose valuation has entered a reasonable range after the pullback. (China Galaxy Securities Research Institute )
