Sector performance. In the 40th week of 2018 (October 8 to October 12, 2018), the machinery and equipment industry was weaker than the broader market, with moderate performance in all industries, with a cumulative excess return of -3.35%. Excavator sales continued to grow steadily, trade frictions intensified. Continue to focus on investment possible overweight: This week, we announced the sales volume of new machines in September, with total sales reaching 13,400 units, a year-on-year increase of 28%, of which domestic sales were 11,700 units. With a year-on-year growth of 23%, domestic sales continued to grow steadily in the context of a 17-year high base. We believe that from the source of demand, the excavator aftermarket and the second mobile phone market have experienced a certain decline. Komatsu announced that the inventory utilization hours in September decreased by about 4.6% year-on-year, reflecting that infrastructure investment and real estate investment remain. In the background of the trough, the actual utilization of the stock excavator has been adjusted. However, the users of high-quality excavators are still expecting the start of future projects, and the prospects of the mining industry are still replacing equipment and even expanding production. Looking ahead, we still expect that domestic infrastructure investment 4Q will bottom out in the context of increased external trade friction. The accelerated issuance of special bonds, credit-oriented policies and compliance with PPP projects are expected to accelerate the start-up and investment of infrastructure projects. The utilization status of stock engineering machinery and equipment has supported the demand for new machines in 1Q-19. Therefore, we are not pessimistic about the economic performance of the construction machinery industry chain in the next three quarters. In addition, the short-term performance is highly cashed, the valuation has entered the historical bottom zone, and we continue to be optimistic about the quality of the industrial chain. The first push is Hengli Hydraulic and Zhejiang Dingli. , Sany Heavy Industry, Liugong, etc. From the perspective of investment overweight, we also focus on the acceleration of investment in domestic oil and gas exploration, coal chemical industry, rail transit and other fields. This week, the international oil price (cloth oil) broke through the $85/barrel mark, which has exceeded the break-even line of most oil and gas resources. If the oil price is stable in the range of 80-90 US dollars, we expect international offshore oil exploitation in the next year. The speed of unconventional oil and gas exploration will be further accelerated, the global LNG investment will also increase, leading to the deterministic recovery of the global energy upstream and upstream areas, coupled with the strong demand for domestic energy security and the substantial increase in capital expenditures in the middle and upper reaches, we continue We are optimistic about the investment opportunities in oil and gas equipment and coal chemical industry. We are the first to promote Jerry shares, petrochemical machinery, Nikken Seal and Hangyang shares. It is recommended to pay attention to COOEC. The rail transit tender recovery has improved the prospects for the recovery of the 19-20 year sector. The urban rail and intercity railways in the PPP project are an important part, and it is expected to bring about the start of new projects, focusing on China CRRC, CRRC Times Electric, and China Railway. Shares, thinking and control.
In September, the sales volume of excavators increased by 28% year-on-year, and the leading advantage was more obvious. According to the Construction Machinery Association, the total number of excavator machines sold in September was 13,408 units, a year-on-year increase of 28%. Of these, exports totaled approximately 1,689 units, a year-on-year increase of 75%. 3Q18 excavator sales of 36,290 units, an increase of 35% year-on-year, cumulative sales of 156,242 units from January to September, an increase of 53%. Considering the 4th quarter stocking factor, we believe that the 18-year excavator sales volume is expected to exceed 190,000 units. At the same time, the performance of leading companies continued to be strong. In September, Sany Heavy Industry sold 3,529 excavators, a year-on-year increase of 47%. The market share in September reached 26.3%, and the cumulative market share in January-September reached 22.8%. Under the background of stable infrastructure, we believe that the current industry boom is expected to be maintained. It is recommended to pay attention to: Sany Heavy Industry, Hengli Hydraulic, Liugong, Xugong Machinery, Construction Machinery, Eddie Precision, Zoomlion.
The oil price fluctuated at a high level, pushing up the oil and gas industry chain. According to OPEC, Iran's crude oil output in August reached 3.584 million barrels per day, down 249,000 barrels per day, while international crude oil prices gradually increased. Brent crude oil futures prices fluctuated at 80-86 US dollars per barrel in early October. The rise will help drive further recovery of global oil service. At present, China's external dependence on crude oil and natural gas is 70.2% and 42.7% respectively. Under the background of trade friction, the state's promotion of energy security will promote domestic oil and gas companies to increase capital expenditures to ensure oil and gas supply. We expect investment in domestic oil and gas exploration, especially unconventional oil and gas exploration and development, to be significantly improved in the next few years. The upstream exploration and development, midstream pipeline receiving station facilities, and downstream refining and chemical industry capacity are expected to expand as a whole. It is recommended to pay attention to: Jerry shares, petrochemical machinery, China National Offshore Oil Corporation, CNOOC Engineering, as well as Nikkiso Seal, Neway Shares, Hangyang Shares and other oil and gas downstream equipment targets.
This week's first target: Sany Heavy Industry, Hengli Hydraulic, Japanese Machine Seal, Zhejiang Dingli, Hongya CNC, Hangyang Shares, Nuoli Shares
Sany Heavy Industry: High-margin excavators and pump trucks have recovered strongly, market share has increased rapidly, and construction machinery has benefited most from the “One Belt, One Road” leading enterprise. Hengli Hydraulics: The monthly sales volume of the 2018H1 excavator is high, providing room for growth in the company's new products and new market businesses. Japanese machine sealing: domestic mechanical hydraulic seal faucet, benefiting the private production and refining plan, is expected to become a seal platform-type enterprise. Zhejiang Dingli: The aerial work platform market is still in a period of heavy volume. As a leading company, it is expected to enter the new product launch cycle in 18-19 years. Hongya CNC: domestic panel furniture leading enterprise, excellent management, clear strategic positioning, continuous product internal upgrade and product chain expansion, has now basically covered the entire chain of panel furniture production, and its performance is expected to continue to maintain rapid growth. Hangyang shares: downstream metallurgical and chemical recovery is obvious, oil refining and coal chemical industry provide strong demand increase, and gas price elasticity is large. Nuoli shares: The forklift industry continued to rise, and the logistics automation business increased in volume.
Risk warning: slowdown in fixed asset investment, tightening of credit policies, and potential trade protectionism.