Iron stall construction machinery enterprises need to learn to "run away"

The construction machinery industry encountered another "breaking event."

At the time when real estate has not been thawed, railway construction is facing "changes." The “Autumn Harvest” that was originally promised by many people in the industry seems to have been lost.

In the construction machinery industry, which is sensitive to national policies, infrastructure, real estate, and exports are the three pillars of its lifeline. Railways, as the most important part of our country's infrastructure, will be transformed into drastic changes in the construction machinery market.

In front of the Wenzhou-Wenzhou Railway, a rear-end collision incident led to the State Council convening an executive meeting to reorganize system safety assessments and suspend the approval of new railway construction projects for railway construction projects that have been approved but have yet to start. The media later broke the news that the Ministry of Railways was in debt. "The funds were cut off, and 36 listed companies in the high-speed iron sector had receivable accounts of 249.1 billion yuan, 90% of which were under construction.

Obviously, many accidents in the railway field this year have been called "earthquakes". This makes Chinese equipment companies, especially those in construction machinery, who have eaten for many years "iron-built meals," feel chilly.

Originally attractive "iron built dinner"

For many years, construction machinery companies have undoubtedly been one of the biggest beneficiaries of railway construction.

In particular, the construction of high-speed railways that have emerged in recent years has a large demand for construction machinery. Taking the Beijing-Shanghai high-speed railway with a total investment of 220 billion yuan as an example, the infrastructure construction accounted for 100 billion yuan, and the construction machinery procurement scale was approximately 20.9 billion yuan, while the average annual purchase amount during the construction period was approximately 4.2 billion yuan.

At the same time, this demand also presents many varieties and stages. According to the construction process, the required types of construction machinery and special accessories are as follows: bulldozer, excavator, loader, grader, rotary drilling rig, concrete machinery (one station and three vehicles), bridge bearings, beam box equipment, racks Bridge machines, pavers, CA mortar or track slabs. Specifically, earth-moving machinery such as push-and-drag is suitable for the initial foundation construction. Pile-working equipment such as rotary drilling is the main force in the civil construction phase, and concrete machinery and bridge-building machinery are in great demand during the bridge erection phase.

The “large pies” of the high-speed rail project drew the appetite of the construction machinery companies. They all invested heavily and invested more. This year, XCMG's concrete construction machinery industry base has a total investment of 2 billion yuan. After it is put into production, it will form an annual production capacity of 3000 concrete pump trucks, 600 concrete pump trailers, 600 concrete truck-mounted pumps and 150 shotcrete trucks. At the same time, the railway equipment company established two years ago focused on specialized fields such as rail laying and bridge erection. It is particularly evident that XCMG made its intention to build a full set of equipment suppliers for railway construction.

Of course, all construction machinery companies have taken railway construction as their long-term development direction. In the company's “Twelfth Five-Year Plan”, the frequency of this term has been equal to the more active real estate before.

The capital breaks down and stops work and spread However, the construction speed of China's railways suddenly “brakes up” this year.

At about 20:30 in the evening on July 23rd, the D301 EMU train from Beijing South Railway Station to Fuzhou Station will be operated to Yongjia Station, Shanghai Railway Station, to the Shuangyu Section between Wenzhou South Station and Hangzhou Station. A rear-end collision occurred on the D3115 EMU train to Fuzhou South Station. The rear car fell from the viaduct.

On July 25, the entire high-speed rail segment fell sharply, and the share prices of high-speed rail-related companies also fell, including many construction machinery companies.

This incident became a fuse. Soon, the State Council held an executive meeting to reorganize the system's safety assessment for railway construction projects that had been approved but had not yet started, and suspended the approval of new railway construction projects. At this point, companies related to the railway construction have fallen to the bottom.

Subsequently, according to media investigations, 36 listed companies related to high-speed railways have so far reached a total of 249.1 billion yuan in accounts receivable, an increase of 64.1 billion yuan from the end of 2010, of which "net cash flow from operating activities" totals -67.75 billion yuan. In the first half of 2010, this figure was -18.32 billion yuan. The "debt" associated with railway equipment companies, especially construction machinery companies, is not counted.

In recent days, news of the suspension of railway projects nationwide has cropped up. Wang Mengshu, deputy chief engineer of China Railway Tunnel Group, once told the media not long ago that most of the railway projects have stopped from northeast to southwest and from northwest to southeast. At that time, according to his understanding, the number of railway projects that had been suspended throughout the country was more than 10,000 kilometers. At the same time, according to some media surveys, 90% of the existing railway construction projects have already been suspended, and from the north to the south, there are construction machinery that “is busy” on the construction site.

This “mutation” is directly reflected in the statements of the relevant construction machinery companies, especially the concrete machinery that lacks real estate support. Consistent with the entire construction machinery industry, concrete machinery developed rapidly in the first quarter of 2011. By April, the operation was still in good condition, but it declined in May and worse in June. Since the third quarter, some products produced according to orders have been delayed by customers and some orders have been cancelled.

In fact, the slumping trend of the construction machinery industry since the second quarter of this year has been suspected of “excessive sales” in the first quarter. However, it is related to the current economic situation and the country’s macroeconomic regulation and control. It is related to the increasingly fierce competition in the market and the domestic security housing. With regard to construction, water conservancy construction, and the slowdown in the rate of urbanization, of course, the deceleration in the construction of high-speed rails cannot be ignored.

Learn to "walk and walk"

There are indications that since the beginning of October, the "financing and hunger" symptoms of the railway have been alleviated.

Experts believe that although the previous period of China's railway financing was tense, the current financial market supporting railway construction is still relatively open and relaxed. With the successive introduction of relevant policies, the financial sector’s support for China’s railway construction will continue.

On November 1st, some media reported that the Ministry of Railways will obtain more than 200 billion yuan in financing support in the near future to ensure the repayment of funds and the promotion of key projects, as well as the optimization of supporting projects. All kinds of indications indicate that the tight funding of railroads plagued by funds will be greatly eased with the support of the government.

“As an important national investment project, railway construction not only satisfies the needs of the public for the modern transportation system, but also involves a large number of issues such as the employment of migrant workers and the development of suppliers. Large-scale, long-term postponements and suspension of construction are not normal. The phenomenon is in urgent need of improvement," said Luo Renjian, a researcher at the Comprehensive Transportation Research Institute of the National Development and Reform Commission.

Regardless of what "requirements" the state authorities and the Ministry of Railways will eventually hand over to this matter, the construction machinery industry should probably learn to adapt to "walking" and cracking.

In today's ever-changing economic situation, the three strong pillars of the construction machinery market: infrastructure, real estate, and exports are likely to “change their face” at any time. As a construction equipment company, the risks faced by the equipment manufacturers are increasing. The difficulty is increasing.

The two methods of cracking are nothing more than two kinds: one is to act decisively and randomly, and the other is to scale in time; the second is to cultivate internal forces so as to remain unchanged. But in the long run, the latter may be the best policy.