2016 Machinery and Equipment Industry Analysis

The core view

Due to the sluggish global economic recovery and the impact of the low-level operation of the domestic real economy, the gradual slowdown in investment has caused the traditional machinery industry to suffer. The expansion of the production capacity of the machinery industry has been curbed to a certain extent, and the downturn in the industry has become an indisputable fact. Traditional mechanical, general machinery and other strong cyclic subdivisions will not have systematic investment opportunities for a period of time in the future. However, due to the structural adjustments that the new government has advocated and the economic growth that the economic transition has made to new types of industries will become the trend of the future, new high-end machinery will usher in the spring.

Investment Highlights

1. Offshore Engineering Equipment - For developing countries, especially China, huge energy demand and consumption are met only through the extraction and use of various fuels. Although China’s land is rich in resources and resources, available petrochemical energy sources, such as oil (natural gas, and other resources, are relatively few. Among them, China’s proven oil reserves on the land only account for 2.4% of the world’s natural gas and less natural gas. At 1.2%, China’s per capita possession of oil and natural gas is far behind the world’s average, and in order to ensure long-term sustained economic development, the exploitation of marine petrochemical resources will become increasingly important, and the market prospects for marine engineering equipment in China will be broad.

2. Military equipment - In the international capital market, the securitization of military asset assets is a trend, and it is the pillar means that supports the development of today's national defense science and technology industry. It also uses the diversification of the capital market to broaden the financing channels for national defense construction funds. While increasing national defense funds, it will eventually achieve the goal of promoting the in-depth development of military-military integration. Due to the huge cost of production of military products, a number of listed military companies have adopted additional financing to realise the expansion of funds in order to expand production capacity. Therefore, the future capital market will provide more support for the huge funds needed by the defense industry.

3. Public transport - Due to the economic impact of machinery and equipment, there is less possibility of rising demand and price increase in the short term. Therefore, traditional machinery is worthy of attention as a sub-industry affected by policies. Looking ahead, due to the intensification of urbanization policies, public transport is the most far-reaching mechanical category affected by this policy.

4. New types of coal chemical equipment - Although the two industrial plans “Coal Deep Processing Demonstration Project Plan” and “Coal Deep Processing Industry Development Policy” with guiding significance have not yet been released, there are still differences between the government and the enterprises on how to develop the new coal chemical industry. Views. However, the approval of the “fifteen demonstration projects” will be a highly probable event, and the amount of investment required for these projects will reach about 700 billion yuan, which has huge market potential.

5, industrial automation - industrial automation concepts, including robots), 3D printing and other topics become the subject of this year's capital market hot topics, the plate's yield over the same period significantly higher than the main reference index. In order to reduce labor costs and ensure work efficiency and product quality, the automation trend in industrial production will become more apparent in the future.

6. Investment advice: Under the background of adjustment of industrial institutions, the value potential of some high-growth subdivision machinery and equipment industry with strong policy orientation remains to be tapped, such as marine engineering equipment, military equipment, public transportation, and new types of Coal chemical equipment, industrial automation, etc., and give the industry "stronger than the big city" rating.