Forecast: China's Construction Machinery Industry Will Maintain Positive Growth in 2020

In the coming 2020, many institutions have predicted that the construction machinery industry will continue to have high prosperity. Zaipeng Man, Guoyuan Securities company's construction machinery analyst, said: "For 2020, in terms of growth rate, it is becoming more challenging to maintain the same growth rate as the 2019’s. But after all, the base is significant, and it should still maintain a relatively high position in terms of absolute volume and prosperity."

Juan Lu, the chief analyst of China CITIC Construction, said, "it is estimated that the construction machinery industry will maintain positive growth in 2020 because of factors such as rising infrastructure and real estate toughness. And other factors, including environmental protection upgrades, super governance, and the machine age, will also drive growth."  

Bohai Securities said that in the next five years, it would be an opportunity period for the construction machinery industry to improve its quality and efficiency and to transform and upgrade its development. It will also be an opportunity period for international development. At the same time, the “Belt and Road” construction, rising labor costs, and increasing environmental protection requirements will also continue to support the steady increase in sales of construction machinery such as excavators.

“The share of domestic leading players continues to increase throughout this cycle.” Dongxing Securities Industry Research said that the rise of independent brand excavators is a significant trend in the industry changes over the past ten years. With the growth of domestic brands such as Sany and XCMG, China’s excavators’ brands have more excellent service and product advantages, and their market share is expected to continue to increase in the future.

Zaipeng Man also said that from the perspective of investment, the cost-effectiveness of leading enterprises is still very high. "These companies have the world's top level in terms of competitiveness, and then the company’s valuation is now relatively cheap. The price-earnings ratio may be about ten times in 2019 and less than ten times in 2020."